Besides growing in proportion, the consumption power of Asia’s middle-class population will be a force to reckon with. The aforementioned research predicts that Asia will account for over 80 per cent of the global growth in middle-class spending in the coming 10 years. If it occurs, Asia will be the largest and wealthiest region in the world by 20304.
That said, the path to the Asian Century is not preordained, and the rise of the middle class itself is not enough to sustain the ongoing transformation.
Embracing digital evolution
The sustainability of Asian growth will rely heavily on digital transformation in which millennials are the protagonists. About 61 per cent of global millennials live in Asia, including a staggering 455 million and 413 million in India and China, respectively, according to United Nations estimates5. In addition, by 2021, about 60 per cent of Asia Pacific’s GDP will be derived from digital products or services, according to research conducted by IDC (International Data Corporation). Such a digital transformation will add around USD1.16 trillion annually, or 0.8 per cent incremental growth to Asia Pacific’s GDP by 20216.
With fewer legacy infrastructure and business processes tethered to old practices, Asian countries have found it much easier to embrace digital transformation compared to other parts of the world. Cross-national academic research, for example, suggests that the speed of adopting innovation in Japan, South Korea and Taiwan has been significantly faster than in the US7.
At the forefront of Asian digital transformation is the evolution of AI technologies. Previously, computers could only execute rigidly defined tasks for which they were programmed. Now heading into Industry 4.0, computers can flexibly adapt new data to carry out tasks that typically require human intelligence without requiring specific rules. These include identifying handwriting, and even understanding idiosyncratic phrasing.
If harnessed in the correct way, AI technologies can dramatically boost productivity by freeing people from menial work, allowing them to focus on higher value-added tasks. With this in mind, Asian countries are putting more efforts into AI development. Spending on AI systems in Asia, according to IDC, will increase to USD15.06 billion in 2022, with a compound annual growth rate (CAGR) of 50 per cent over the 2018-2022 period – outpacing the global CAGR of 38 per cent to USD79.2 billion8.
Education: From digital to AI
Knowledge is the most important resource when it comes to technological evolution. Educational technology, therefore, provides a fertile ground for AI technologies to develop. Whilst other countries have puzzled over best practices, certain Asian countries have not waited around to initiate AI-powered intelligent teaching solutions.
With AI algorithms, a teacher can easily, on a large scale, track hundreds of students’ individual performances, detect which concepts each of them finds difficult, and tailor-make personalised materials and curriculums to make learning more time-efficient. With these mundane tasks undertaken by algorithms, teachers can have more time than ever to focus on the creative aspects of their work.
Whilst the US market has a strong research base in AI technologies, China has strong support from the government and its population who aspire for knowledge.
In the last few years, China’s investment in AI-enabled teaching has exploded, with tens of thousands of students using some form of AI to learn. This has been through extracurricular tutoring programmes such as Squirrel’s, through digital learning platforms such as 17ZuoYe (Sunny Education), or even in their main classrooms, thereby bridging the divide between urban and remote areas. 17ZuoYe, for example, connects 51.7 million students and 2.5 million teachers, and covers 140,000 schools across 363 cities in China9.
Across the rest of Asia, universities in Singapore and Malaysia have begun experimenting with predictive algorithms to prevent dropouts10. Asia, however, has a long way to go before AI-powered teaching will have a major impact, as many countries remain hesitant to allow the collection of such comprehensive data from which AI algorithms can track student performance.
As technological development continues to thrive, there are, however, other challenges which need to be addressed. Notably, the continued trade tensions between China and the US, as well as climate change. On the bright side, these issues could act as a catalyst for new opportunities to help re-shape the future role of Asia. For example:
- Climate change mitigation. Asia’s large population, frequency of natural disasters, and occasionally challenging urbanisation processes are making the region vulnerable to the risk of climate change. If Asia is going to meet all its Sustainable Development Goals (SDGs) under the Paris Agreement by 2030, and fight climate change, it needs more innovation and collaboration to enhance its sustainability potential.
- Preparing talent for the future. In this regard, Asia is making good progress. In 2016, China and India had 4.7 million and 2.6 million recent graduates in science, technology, engineering and mathematics (STEM) programmes, respectively, whereas the US only had 568,000 (see Fig. 3).
Fig. 3: Recent graduates of STEM subjects11