The state will find difficulty financing the increased public expenditure on healthcare and pension systems given shrinking populations of working adults, falling tax revenues and high dependency ratios. In order to remain competitive, these advanced economies have 2 options. They can choose to augment their population through the import of young labour or global talent. This path leads to challenges in cultural integration. The alternative is for these countries to compensate for a stagnant and aging workforce with the deployment of technology. Japan and Korea are the best examples, relying on an increasing level of automation and sophisticated robotics. As demographics change, so too will consumer demands. Singapore is positioning itself to attract companies to monitor and understand these changes within Asia. The Singaporebased Asian Consumer Insights Institute, launched in 2011, is helping companies to develop and test-bed Asian-specific products and business strategies. In 2012, Nielsen, a global provider of consumer insights, chose Singapore to launch an innovation hub. This hub, the first of its kind in Asia, will develop new technologies and methodologies in neuroscience, shopper technology, and measurement science to enhance consumer and market insights for companies working to reach consumers in Asia. Technology The final trend I’d like to talk about is that of technology. Technology, especially information technology, continues to change the world and is reshaping the social compact between states and citizens. According to IMS Research, the number of internet-connected devices has reached 9.6 billion. That is more than the number of people in the world today.
By 2030, 20 years from now, the centre of gravity of global trade patterns is projected to shift even further to within Asia, with China accounting for 17 out of the top 25 bilateral trade routes, overtaking trade links between developed countries like Japan-USA, Germany-USA that will grow but they will grow much more slowly. Within Asia, trade patterns will evolve. With increasing urbanisation and consumer demand, China’s trade with developed Asia, will change. It will start to import relatively more finished  BIS central bankers’ speeches  1  consumer goods from Japan, Korea and Singapore. These bilateral trade routes are not new, but they will rise in importance. China’s trade with developing Asia, particularly with Malaysia, Thailand and Indonesia, will propel these bilateral trade routes into the top 25 bilateral trade routes by 2030. Indonesia in particular, with low wage costs and proximity to China, is well placed to become the next manufacturing hub and sell low-end manufactured products back to the Chinese. The shift in centre of gravity of world trade to Asia is more than a China story. As developing Asian economies become wealthier, they will consume more and trade more with each other. For example, bilateral trade between Thailand and Indonesia is projected to be almost five times as high in 2030 as it was in 2009. To support this Asian integration, countries in Asia have already come together on regional platforms to foster greater openness and cooperation.