MetaScan 4: The Future of Asia – Implications for Canada

Executive Summary

Over the next 10–15 years, the world will experience two influential sources of change: the rise of Asia and the accelerating advancement of digital technologies.This study uses strategic foresight methods to examine the potential surprises and disruptions that could result as these two forces collide and interact to shape the future of Asia and the world. The study does not predict a particular future, but explores a range of plausible futures to critically assess current assumptions about Asia and better understand the policy challenges and opportunities that could arise for Canada.

Asia’s rise

With a growing economy,expanding middle-class and rising geopolitical clout, Asia is expected to play an increasingly influential role on the world stage. With a projected population of five billion people by 20301, Asia could eventually dominate the international economic and geopolitical order. Global trade patterns are already shifting to Asia as India and China exert more global economic and political influence. Asia’s most powerful leaders are proving to be strategically adept at driving the international policy agenda and capable of challenging the primacy of western based institutions. Notwithstanding Asia’s diversity and complexity, emergent changes at the scale of the continent are transforming both Asia and the world. This study moves beyond the usual country level analysis to explore these broader system level changes, focusing on developments in the economic, social, energy and geostrategic systems in Asia and interactions among them.

The digital revolution

In parallel to Asia’s rise, the accelerating development and application of technologies including artificial intelligence (AI), data analytics, sensors, robotics,virtual telepresence and the Internet of Things are starting to transform economies and societies everywhere. By 2030, almost all of the world’s population will have access to low-cost Internet connected smart devices linking them to global society, consumer markets, education, and work opportunities. New business models will emerge and expand, whole industries may experience more rapid cycles of rise and decline, and governments may find their policies outdated for the economic, political and security realities of the digital world.

Asia meets the digital revolution

The convergence of Asia’s rise and the digital revolution has the potential to trigger unexpected impacts with global repercussions. The two forces may amplify each other as Asia’s need for infrastructure creates markets of a scale that drives rapid technological innovation and brings down costs, while massive government investments in digital connectivity, renewable energy and skills position many Asian countries for success in the new economy. At the same time, rapid changes in the economy, employment,values and security brought on by the digital revolution could also breed instability, particularly in the context of high citizen expectations and fragile governance regimes. Just as Europe and the United States (U.S.) dominated the industrial revolution, a number of Asian countries are planning to ride the wave of the digital revolution to greater prosperity and global influence — and many have the potential to do so. However,Asia’s rise in the digital era may not replicate the American hegemony of the industrial era, as the powers of the nation-state are challenged by a more interconnected digital world. Multiple future scenarios are plausible, and in the context of rising uncertainty, deserve to be considered.

Using foresight to explore implications for Canada

Since Canada’s future could increasingly be shaped by Asia, exploring some of the unexpected policy challenges and opportunities that may lie ahead is a prudent exercise. This study used the Horizons Foresight Method (described in Appendix 1) and takes the reader through a thought process that is intended to stimulate his or her own thinking about how changes in Asia could reshape Canada’s economy and society. It begins by listing some commonly held assumptions that consciously or unconsciously shape the policy designer’s thinking about the expected future for Asia. The study then identifies a number of insights about potentially disruptive changes that could alter Asia’s expected future and uses a range of future scenarios to explore how these disruptive changes could interact to create surprises. Next,it describes some of the key policy challenges and opportunities that Canada may confront as a result of these potential changes. Finally, it tests the initial commonly held assumptions against the findings of the study in order to develop more robust assumptions for use in policy,planning and research.

Key findings

While each reader will reach their own conclusions, the study identifies some key areas of change in Asia that Canada could anticipate and prepare for. These are not based on what is most likely, but rather on what is sufficiently plausible and disruptive to be worthy of the attention of policy makers. Highlights include:

  • Asia’s digital leap: Due to Asia’s infrastructure deficit, it is leap-frogging the West and building modern, fast, cheap and smart digital infrastructure. This digital connectivity may equip a large portion of Asia’s population to enter the global workforce and consumer market in ways that could accelerate the global transition to a digital economy. New technologies, job unbundling and radically evolving business models may be embraced and scaled up in Asia leading to downward pressure on incomes and prices, particularly in the West. Canada could face an extended period of economic and social disruption while governments, firms and individuals learn how to adapt to the new realities of a global digital economy.

  • Asia moves into virtual work and global digital services: As manufacturing jobs are lost to automation, Asia may use its low-wage advantage to move into global digital services for both high- and low-skilled work. Canadians may find competition coming from unexpected places, but also emerging opportunities to work in new ways.

  • Asia’s declining demand for oil: A variety of economic, technological, public health and policy decisions could shift Asia away from oil for transportation leading to lower than expected Asian demand for petroleum products and weaker global crude oil markets. As a relatively high cost oil producer, Canada may be challenged to compete against lower cost oil producers who are able to maintain supplies at lower prices to retain their market share.

  • Asian cooperation and declining western influence: Asia may develop regional institutions that facilitate deeper economic, diplomatic and security ties in the region. While consensus is more likely in economic areas, a more united Asian voice could reshape agenda-setting, norms and decision-making while reducing western influence in the region and internationally.

  • New Asian models: Asian societies are going through massive and rapid changes that will require extensive innovation in areas as diverse as consumer goods, health care, education and governance. Canada may be able to learn from Asia’s rapid advancement, adopting lower-cost or more effective strategies.

Next step — dialogue

This study is the product of a capacity building exercise that involved Horizons staff, 60 public servants and dialogues with 30 Asia experts.2 The ideas are intended to encourage further dialogue and debate on core assumptions and emerging challenges and opportunities to help develop robust policies and strategies to address them. The study offers a new perspective by exploring a range of plausible futures beyond the expected future, and may assist Canada to prepare for the changes that lie ahead.

Exclusions

This study considered but did not develop detailed analysis on issues such as: demographics, aging, youth, religion, ethnic and border conflicts, climate and environmental issues, food and water security, and infrastructure, etc. These issues have been dealt with in depth by others.

The full report can be read here.