Asia is reducing its dependence on manufactured exports as the main driver of growth, and Middle East is seeking to reduce its dependence on energy exports. Both regions are strengthening their social, transport and economic infrastructures as they diversify their economies. The examples are all around us, like India and Indonesia’s major energy and transport infrastructure plans, Bahrain’s Financial Harbour project, and Qatar’s Education City. Finally, the appetite for prosperity is unshakeable among our younger generations. Young people all across our regions can see what economic growth brings, for their families and themselves, and for their communities. Whether their quest is for material or spiritual fulfilment, young people know instinctively that economic growth and better jobs will help them fulfil their needs. They want to move ahead, to educate themselves, and to give whole communities pride in what they can achieve - in science, in business and in culture. These aspirations of our young are probably the biggest positive for our regions. They will also bring us together over the long haul. BIS Review 47/2005  1  High savings will be increasingly intermediated within Asia and the Middle East On the financial side of things, the fundamentals are also solid in both our regions. First, the supply of savings in Asia and the Middle East is higher than in any other region of the world. Savings rates in Asia are expected to remain in the region of 35-40% of GDP for some years to come.
The last observation is that goods-producing value chains are becoming more regionally concentrated. Robotization and automation made cheap labor less relevant when companies decide where to place production. This pattern is obvious in certain sectors with closely integrated supply chain for just-in-time production such as automotive, electronics, and electrical appliances. Locating production line close to the end-market also helps businesses better customize the products based on each market’s preference. Trade protectionism is undeniably one other key factor that help accelerate value chain regionalization. All these changes in value chains could be a threat to today’s businesses. Consumers are ready to switch to a competitor’s product if they find it suits their changing preferences better and quicker. A standalone service business might be disrupted by new service value chains that offers a more complete solution to the customer’s need. Rising wages in Thailand will draw production to emerging market countries with lower wages, while automation will help advanced economies draw production closer to home. But then again, for those who are prepared, this could be an opportunity. Businesses will have to think about how they could incorporate service components into their 6  products. An example of this transition is Daimler and BMW, who joined hands earlier this year to explore service-focused business models such as taxi-hailing, car sharing, parking, and EV charging. This, of course, also means that we will need to continuously reskill and upskill our workforce. 4. Digital transformation The fourth trend is digital transformation.