The Next Big Economy


“The future is already here. It’s just not evenly distributed.” 

– William Gibson

In The Silk Roads: A New History of the World, Oxford scholar Peter Frankopan chronicles the birth of much of what we call civilization today – on the legendary trade network spanning from China to Persia. His history describes a past where decisions made in India and China shook the world, and ideas from the Mediterranean swept it.

Post-Industrialization, these lofty roles belonged to the West – indeed, the economic center of gravity of the world has until now been between America and Western Europe, the economic powerhouses. However, that pendulum is swinging back. Academic research predict that the center of gravity of the world economy will be right between India and China by 2050. Standard Chartered, the British multinational financial services corporation, estimates that by 2030, the world’s largest economies will be China and India. China’s ambitious Belt and Road project moves Frankopan’s past even closer to the future of 2030. This is, by now, common economic knowledge.

Figure 1: Evolution of the earth’s economic center of gravity (Source: McKinsey Global Institute)

Note: For shift and calculation, see Quah (2011)

This brings about a reshuffling of the world economic order as we know it, with China and India ahead of the US, and Indonesia poised as a respectable player in terms of economic size. This reshuffle comes at the end of the glorious globalization narrative; the world is increasingly trending towards hyper-nationalist narratives (as evidenced by the conflict between US and China). Increasingly, nations are turning inwards, questioning the role of multilateral organizations like the UN. Experts fear the Thucydides Trap – and world-wide conflict between superpowers [Core: THE DOGS OF WAR].

Taimur Khilji, Economist and Urban Development Lead at UNDP, points out the Asia-Pacific is quite diverse, and there is quite significant variation by sub-region; however, in general, countries in the Asia Pacific are being forced to choose between China and the USA in terms of their trade stance – and that this will have significant ramifications for economic, social, and technological development. Much of current Asian growth, he notes, can be accounted by the rise of China, and future growth is likely to be affected depending on the policy decisions countries take in this regard.

Vandana Singh, speculative fiction writer, particle physicist, and Chair of the Department of Physics and Earth Science at Framingham State University, points to hidden assumptions that people will buy into the current economic system forever.   “We may be looking at some major shifts in frameworks as people – especially the young, such as those involved in Extinction Rebellion – rethink their relationship to energy, to nature, to capitalism,” she points out, “I think we are looking at the emergence of new ‘isms’ that will be beyond anything the 20th century has come up with – beyond capitalism, communism, socialism – even if it includes elements of each – and that these may even be informed by some very old knowledge systems, such as indigenous knowledge.

Whichever systems emerge have to take into account the different facets of this global shift towards the APAC. There is also the specter of the so-called Fourth Industrial Revolution, which we shall examine in detail elsewhere [Core: THE 4TH INDUSTRIAL PROLETARIAT].

Population effect: pedal to the metal – or brakes?

Firstly, economic change is so intricately tied to demographic shifts brought about by population change [Core: FEEDING THE BEAST] that we need to look at the types of population growth the region is going to face, and what it means for economies.

Not all population growth is made equal. In Thailand and in China, the proportion of people aged 65+ is increasing. This means the ratio of workers to dependents is decreasing; thereby reducing workforce pools coupled with an increasing population in need of food, water, shelter and medical aid, but unable to contribute to the current economic system. In India and Indonesia, this trend is expected to go the other way: historically high mortality rates reduce, and fertility rates remain high before dipping. As a result, populations are growing rapidly, increasing the worker to dependent ratio, leading to forecasted economic productivity benefits. Thus, in China, not only are the daily lives of many workers who are in blue-collar jobs going to become a lot harder; there’s going to be a braking effect on the kind of labour-led economic boom that China’s been going through. India, on the other hand, could be facing a “population dividend” – the 2030s thus becomes a prime time to capitalize on that labour.

Figure 2: The proportion of people aged 60 and over, 2015-2030 scenario (Source Global Age Index 2015. Compiled by Asia News Network (ANN) / DataLEADS. Retrieved from https://www.thejakartapost.com/news/2018/02/14/how-asias-population-is-aging-2015-2030-scenario.html)

Left unused, this population dividend could easily swing the other way. As Justin Yifu Lin, former Chief Economist of the World Bank and current Dean of the Institute for New Structural Economics and the Institute of South-South Cooperation and Development, notes, “If a large cohort of young people cannot find employment and earn satisfactory income, the youth bulge will become a demographic bomb, because a large mass of frustrated youth is likely to become a potential source of social and political instability.” 

Thus, India must create more jobs, in a manner that fits the larger overall economic structure. Its success at doing so will determine its economic and political importance in the years to come. Countries with aging populations, on the other hand, must use existing capital to shift from labour-intensive manufacturing economies to scalable service economies. 

Middle classes: not the droids you’re looking for

“Every other day, a new billionaire is minted in Asia,” trumpets Bloomberg. However, there is a darker narrative: vastly unequal levels of access to opportunities marks widening splits in wealth, education, healthcare, disaster resilience, and technology access. Data from the Brookings Institute once pointed to Asia as the source of a staggering 88% of the next billion middle class citizens, with the OECD agreeing. Newer research from McKinsey reinforces these estimates from a different angle, pointing out that Asia’s middle class will hit three billion people soon. A tidal wave of growth is happening in this particular demographic in this region.

Historically, middle classes have been engines of economic growth. People in this bracket, in the past, have “vigorously accumulated capital, be it physical (plant, equipment or housing) or human (education or health). This accumulation (and others not listed here) empower domestic markets; one only has to look at South Korea and China, and as of late, Thailand, all of which have substantial automotive and electronics industries that cater to the world and to themselves. Middle classes are also believed to support democracy, progressive politics, and inclusion. They tend to demand higher quality public services and, in doing so, push for better governance (a view shared by Euromonitor’s futurists, who see the world becoming more customer-oriented).

The Asian Development Bank disagrees with much of the easy narrative. Analysts point out the vast disparity between the middle classes of more developed countries and that of Asia, as well as key existing challenges to overcome before such a population becomes equivalent to what the global narrative considers middle-class. Countries such as India, Pakistan, Bangladesh, Indonesia, Thailand, Vietnam, and the Philippines still host much of the world’s poor; China, India, and Indonesia, in particular, have this problem. There is a general difficulty in projecting the behaviour and future of the middle classes of Asia, coupled with fears of ‘peaking’ exist; in fact, it is feared that rising inequality may leave more people behind. So while substantial decreases in poverty and increases in global expenditures are projected, it may be a fallacy to assume that APAC middle classes will start acting like the middle classes of the West.  Expecting powerful democratic championship seems like a bit much.

As these countries improve economically, this inequality is expected to grow. Today, the situation is such that accounts like The BIllionaire Raj chronicle an India where slums sit next to skyscrapers and the economic elite enjoy sweeping concessions and almost near-immunity from damage from the political elite [Core: THE MEGA-SPRAWL APPROACHES]. The upper class rises, and the middle is unable to bridge the gap, and the road to 2030 will see increasing social tension because of these differences.

Winners-take-more

A consistent theme in the new economic order is the trend towards ‘winner-takes-all’ style economies. McKinsey, analysing nearly 6,000 of the world’s largest public and private companies with annual revenues of at least $1 billion, shows that in this sample space, economic profit is distributed along a power curve, with the top 10 percent of firms capturing 80 percent of economic profit. These “Superstar” companies “come from all sectors of the global economy, and their diversity has increased over the past 20 years. Among them are US and Chinese tech companies that didn’t exist 20 years ago (including Alibaba, Alphabet, Facebook, and Tencent) as well as global brands that have been around for decades (such as Coca-Cola and Nestlé) but also Chinese banks, French luxury companies, and German automakers. US companies still make up the largest share of the leaders, accounting for 38 percent, compared with 45 percent in the 1990s. Companies from China, India, Japan, and South Korea have made the biggest gains and now account for 22 percent of the total, up from 7 percent. These top-decile companies capture 1.6 times more economic profit today compared with 20 years ago, with larger revenues and higher profit margins than in the past. By contrast, the bottom decile destroys more value than the top 10 percent creates. The economic losses of this bottom 10 percent of companies are 1.5 times larger on average than those of their counterparts 20 years ago.”

This points to inequality not just among society in general, but also among corporations. Historically, lessons from boom-and-bust cycles show us that nothing is ‘too big to fail’; companies are regularly disrupted and knocked off their perches. The question is whether this generation has brought us companies that have learned from these lessons and are large enough to keep disrupting themselves – in practice and well as in philosophy. Taimur Khilji points out that there exists a subtle monopoly in this business model, with Facebook being able to buy out any competitors (Whatsapp and Instagram) and thus enlarge its total market share.

The winners-take-more model has secondary impacts on media: as Facebook and others, by dint of buying out the competition, acquire more marketshare, they begin to control larger shares of the attention economy within the APAC region – research has already identified how news corporations have handed over power to social media. which, Khilji notes, has “both positive and negative implications in terms of the social contract between the government and the public –  it has become easier to mobilize people for and against a cause…but it is equally easy to feed people with false perceptions and narratives“. 

Innovation versus the people

David Galipeau, founder of SDGx and director of the Yunus Center Near Future Lab, points out that most innovation for the last 50 years was funded by government programs in the US, Israel, Germany, and such. He expects public financing in the future to be lead by China, South Korea, Japan, India, Malaysia and others, using national innovation programs as vehicles. “They may be public (like Singapore) or hidden (like China) but all will have a very specific communalization lens,” he notes. “Private sector financial incentives like tax shelters and profit/capital gains protection; there will be larger acceptance of informal financing – basically hidden or off-the-books financing of innovations (i.e. military funding, research grants, black-hat financing) and good old ‘lobbying’ (which are basically large scale commercial bribes). Regulation will become more open but at best, these will be populist, token attempts to open the discussion on ethics and morality. One must understand that governments are still struggling with Internet regulation – 20 years after the internet became mainstream.  That’s one rather simple technology. Governments will not be able to enact comprehensive regulations or policies that democratize the upcoming 5 or 6 new disruptive technologies. They neither have the understanding, skill nor the political will.  Therefore, private sector will have to ‘self-regulate’ like the lip service that Google, and Facebook have tried. China has the best of both worlds – lots of incentive schemes and very little regulation.”

This has significant implications for everything we’ve talked about here – from middle-class poverty to inequality to (even) predictions of spending power and political stability. The innovations mentioned tie into the effect generally known as the Fourth Industrial Revolution [Core: THE 4TH INDUSTRIAL PROLETARIAT]. The UNDP and Economist Intelligence Unit, studying the potential impacts, note that much of the APAC’s economic development was built on the backs of manufacturing sectors and low labour costs. South Korea, Taiwan, China, India, Bangladesh, Malaysia, Vietnam, and Thailand rely on these manufacturing jobs and, in the case of India, a thriving BPO sector. This was a fantastic advantage in the 2000s; however, advances in automation and machine learning, supercharged with an AI arms race between the US and China,  threaten to impact these jobs (both white and blue collar) across the board. The UNDP and EIU believe that over 60% of salaried workers in Indonesia, the Philippines, Thailand alone occupy job roles that may be automated out.

This is useful to some and alarming to others: on one hand, countries experiencing labour shortages, such as Japan, now have a leg to stand on. But more populous nation face a situation similar to what many Western countries did during the time of the Industrial Revolution – massive job loss across the board, across multiple industries: given how resource-starved the region is going to be, in terms of water, energy and food, [Core: FEEDING THE BEAST], how will governments handle the inevitable transitions brought about by breakneck innovation, while remaining economically competitive? Is there a middle path [Satellite: HUMAN VS AI; HUMAN + AI]? With these challenges (and potential population dividends going bad), schemas like Universal Basic Income may shift from being moral discussions to the need of the hour.

REGIONAL RESPONSES

As economic power swings towards the APAC region and as tensions rise over resources [Core: FEEDING THE BEAST], various nations become uniquely positioned to flex their muscles in ways that have powerful consequences for the APAC region.

The elephants in the room here are India and China [Core: THE DOGS OF WAR]. The ripple effects of population change disrupt even further the dominant narrative of China as a cheap manufacturing hub for the rest of the world. Cai Fang, Vice President of the Chinese Academy of Social Sciences, and chairman of the National Institute for Global Strategy therein points out that the economic growth of China was built on a population dividend that began shrinking in 2010. He proposes that China shift from an ‘an input-driven pattern to an innovation-driven one, replacing the population dividend with a reform dividend‘, with a certain amount of induced labor mobility:

In general, economic growth is driven by the accumulation and allocation of factors of production, which include inputs of labor, human and physical capital, and the improvement of productivity. As far as the Chinese economy is concerned, whereas the absolute amount of labor force becomes limited because of its dependence on the magnitude of the working-age population, labor reallocation – namely, from agriculture to nonagricultural sectors – can still transfer surplus laborers from agricultural engagement to nonagricultural employment, other factors can be better mobilized, and productivity can be enhanced.

The US National Intelligence Council, McKinsey and other sources predict that China will, at a 30,000-foot view, shift to an economy that exports more services and focuses on manufacturing for internal markets. It can be pointed out that there are lessons here: few other countries seem to have as good a handle on the upcoming shifts as China. China’s model of development over the last four decades has been both hyper-capitalist and hyper-socialist, and seemingly tailored to take advantage of its rising power. In addition to building megacities from scratch and other large scale infrastructure, it has developed centrally-planned industry-specific road maps (in AI, tech startups, and so on), provided attractive incentive schemes and financing options to entrepreneurs and encouraged cut-throat competition among players. In contrast, other countries in the region have not been as adept – or able to replicate this success,  as evidenced by cases like Cyberjaya in  Malaysia.

In addition to all of this, China is also operating a venture-capitalist model that combines services export with investment in countries, economic linkages, and infrastructure. They also appear to be pushing for increased regional integration, especially with the AIIB and China’s ambitious Belt and Road initiative. For more context, China’s Belt and Road Initiative, or the “21st Century Silk Road”, is an ambitious project that will touch some 71 countries, from Asia to Europe to Oceania to East Africa. This USD 1 trillion behemoth project is set to sprawl across strategic geographical land corridors, shipping routes and reshape the geopolitics of the APAC. There are significant benefits: the multi-billion-dollar deep-sea project in Myanmar’s Kyaukpyu town, which is built as part of China’s plan to alter their sea routes to avoid the Malacca Strait, will have substantial trickle-down effects on regional economies. Taken together with projects happening on the ground (like the Singapore-Kunming Rail Network connecting eight countries), many countries in the region stand to benefit from this exercise. Government-to-government venture capitalism will be an important and inevitable model in shaping economies in the region.

Not everyone is a fan of this approach: the ambitious plan, which puts China at the forefront of regional logistics, has been met with political ambiguity from India as well as diplomatic countermeasures. The United States has an even longer opposition to it: a 2005 report by defense contractor Booz Allen Hamilton (“Energy Futures in Asia”) posited that China would use this strategy (titled the “string of pearls” by said report) to establish bases reaching from south China to the Middle East. A counterthrust from Russia is also underway. Much has been written about the implications of this giant regional infrastructure project, but the general frame is that China is set to resurrect a reshaped, 21st century Silk Road – with itself and its satellites profiting the most.

What of India? India, which is on the receiving end of a population dividend, is set to become the world’s third-largest economy. Aspirations of a $10 trillion economy by 2030 have been thrown about by both government officials and Mukesh Ambani, the chairman of Reliance, arguably India’s largest corporation. India’s recently-revealed 2019 economic survey calls for heavy investment in infrastructure, reducing policy uncertainty, and using ‘nudge’ economics, as popularized by Nobel Prize winner Richard Thaler. It argues that private capital investment will be required to reach Prime Minister Narendra Modi’s (interim?) goal of a $5 trillion economy by 2024. The plan decouples economic thinking from what they describe as “traditional Anglo-Saxon thinking by advocating a growth model for India that views the economy as being either in a virtuous or a vicious cycle, and thus never in equilibrium. This model, in turn, stems from two key departures from the traditional view. First, the Survey departs from the concept of equilibrium as a key tenet, which is being challenged increasingly following the Global Financial Crisis. Second, the traditional view often attempts to solve job creation, demand, exports, and economic growth as separate problems. As these macro-economic phenomena exhibit significant complementarities, the Survey postulates the centrality of the triggering macro-economic variable that catalyses the economy into a virtuous cycle. The Survey makes the case for investment as that key driver. ” India, thus, seems to be in the midst of staging a phenomenal trickle-down experiment – less visible than ports and harbours, perhaps, but no less ambitious for all that.

Many countries will, of course, be unable to undertake such grand experiments. The case is often made for Singapore being a more relatable source of inspiration: despite being starved for resources, Singapore has managed to defy odds and intrigue economists around the world.  Even today, the country’s economy broadly remains in good shape. It remains at the top or close to the top globally as an innovation hub, a maritime capital, and a global financial center, with an experimental attitude towards policy, that enables it to stay ahead. While its conditions – a city-state of relatively few people – are unique, it is worth noting that it, too, contributes to the grander narrative of economic structure and control. It is a first-world country amidst a sea of developing nations. Singapore’s forward-facing Committee for Future Economy website is an example of just how systematically it attempts to keep things that way. Six economic committees oversee transformation for an economy divided into six clusters. A set of strategies suggest the shape of overall reform. This initiative, reported in 2017, draws from over 9,000 stakeholders for the planning of economic strategy.

While some strategies may have to change – Singapore’s economy is tipped to suffer in the looming US-China trade dispute, and the heavily trade-reliant nation-state is seen as a coal-mine canary for the other nations in the region, and it is pegged to either change or decline by 2030 – the ambition and precision in planning may keep Singapore in the eye of regional policymakers as a place to draw lessons from on the road to 2030.

WEAK SIGNALS

  1. Big is no longer beautiful. Roshan Paul, Co-Founder and CEO of the Amani Institute and Anshul Sonak, Regional Director of Education and Innovation at Intel,  both highlight the collapse of “behemoths” in business and the increasing trend towards working at smaller, purpose-driven, more agile and more adaptable companies. This narrative may seem to fly in the face of the giants of the tech industry (Facebook, Google, Amazon et al), but overall, the ‘too big to fail’ narrative is being thrown out the window. David Galipeau, the futurist, projects that startups will become a standard business model in  early value chain and market creation – and that the next fifteen years will see an explosion similar to the DotCom boom, largely due to freer access to technological and social innovation.

  2. The impact of e-commerce: Tina Jabeen, Deputy Startup Advisor, of ICT Innovation Bangladesh and David Li, of Shenzhen Open Innovation Lab, both highlight the growth of e-commerce – particularly in connecting previously isolated people to marketplaces. This has a side effect: as more people become connected and begin using e-commerce services, background supply chains rise in importance. The integrated logistics industry – encompassing road, rail and shipping freight – has experienced steady revenue growth for a while. Whoever controls it – be it state or nonstate actors – stand to profit a great deal. This future growth seems to be a significant part of the raison d’ etre of China’s ambitious Belt and Road initiative.
    Interestingly, 3D printing, of all things, could be a complete technological disruptor to many of these grand schemes set in motion. Much of the press attention is about this technology being used to produce the likes of state-of-the-art prosthetic limb replacements (eg: OpenBionics) or weapons (eg: Defense Distributed). This requires extremely fine-grained control. However, cheaper, coarser goods can potentially be produced quite well and the cost may dip to levels where it is cheaper to print, say, furniture than to ship it over. This has major repercussions for goods trade between countries and logistics networks on which major economic foundations are built. Effective 3D printing technology can cripple the understanding of goods trade and shift goods transport almost entirely to last-mile logistics.


  3. A rework of the gig economy seems overdue. Jabeen points out that much of the economic change is driven by informal economies: over 60% of the world’s employed population is believed to be in this category, a situation ideal for the gig economy. Galipeau believes that these informal businesses are creating a new SME class that flies in the face of western economics, and will make for fascinating observations – and potentially even new theories – for years to come. But major changes are due: despite the media fame, the theoretical value, and the size of informal sectors in the APAC, critique has been leveled at the unregulated, ‘race to the bottom’-style competition spawned among workers by platforms with huge valuations and little risk. The gig economy has been deemed ‘exploitation, not innovation,’ because of how easily platforms can skirt employment laws. Cecille Soria, a Data Privacy Attorney practicing in the Philippines, believes that this is merely a move towards automation under a marketable guise; companies are looking to automate jobs with non-permanent work, the promises of more time and control to workers, who are then left without fundamental safety nets such as medical plans and retirement benefits. However, surveys by LIRNEasia found significant upsides to the gig economy as well, highlighting its role as valuable sources of part-time work. Taimur Khilji posits that tweaks to the platform model are due as more people set aside traditional jobs to join the gig economy, particularly around the rights and social protection of workers – in a sense, a repeat of what the unions of America faced against the Robber Barons of the 19th century.

  4. The rise of tech investment from governments in the APAC: David Galipeau, from a 30,000 foot view, posits increasing public financing of innovation lead by China, but with the certainty that Korea, Japan, India, Malaysia, and others will also put huge amounts of money behind ‘national’ innovation programs, whether public (like Singapore) or partially hidden (like China). He argues that there will be a resurgence of public-private partnerships, such as National Research Centers State-Owned Enterprises that will be publicly financed but privately profitable. This is a throwback to the 1950 efforts in the USA (after the war) to accelerate the American economy. Sources closer to the ground confirm: Tina Jabeen highlights increased government spending on technology – particularly around ecommerce and govtech. Karl Vendell Satinitigan, Director, Office of Senator Bam Aquino (Philippines), agrees, points to a slow but steady rise in governments willing to use randomized control trials and other evidence-based methods of policymaking, and more openness within bureaucracies to try newer, more innovative approaches to solutions – including uncertain initiatives. An example is the ideas42 CityNudge Accelerator, a public-private partnership program where where a supplier is only paid by government a percentage of revenue gained – if the intervention succeeds. Peter Brimble, senior technical advisor of the DaNa Facility in Myanmar, points out that fintech has huge promise in Myanmar, and posits a possible cause for this interest: much of this technology investment is seen not just as valuable stimulation to the financial sector and economic growth, but also as a tool to more efficiently distribute resources to poorer rural locations.

  5. Aging populations bring about increased stress on governments [Satellite: THE MORTAL COIL]: PricewaterhouseCoopers aptly notes that the ability to use debt reduces, governments need to step up with social programs – from job creation for older workers to adding capacity to health systems to pension programs. However, the magnitude of these stresses on countries will vary depending on the demographic profiles, epidemiological factors and the level of healthcare and economic development of individual countries.  A report  by Marsh and McLennan Companies’ Asia Pacific Research Center reveals that elderly healthcare alone will present the region with an immense financial burden and a risk to the fiscal health of countries with the estimated cumulative expenditure on healthcare from 2015 to 2030 amounting to over $20 trillion in APAC. There are also inefficiencies within countries: in Pakistan, for instance, Iffat Zafar & Sara Saeed Khurrum, founders of Sehat Kahani (which operates over 25 clinics serving some 95,000 patients), note that there are than 60,000 qualified female doctors in the country who are “not within the system”, and low government spending, coupled with inefficiencies, create a poor healthcare solution, particularly in rural areas.

  6. Diaspora relationships, particularly with large economies like India and China, become more important, even for first-world nations. As noted by Australia’s Department of Foreign Affairs and Trade in their India Economic Strategy to 2035, “India is currently our largest source of skilled migrants, our second-largest source of international students and a substantial proportion of those who come to Australia under temporary visas to fill skilled positions that Australians cannot…This diaspora will have a big role to play in the partnership of the future. They can go into the nooks and crannies of a relationship where governments cannot. They can shape perceptions in a way governments cannot. “

  7. With the rise of China, command economies may re-emerge as a more politically desirable alternative to market economies. Whether it is practically feasible to operate an economy like China does remains to be seen, as its tight controls spread from bricks-and-mortar policy to the practicalities of the digital realm. For instance, it is a global outlier in how tightly integrated its internal markets are with a single central internet-based service (WeChat). Consumers spend trillions of dollars worth through a single platform; it also gives unprecedented government control of both conversation and markets.

  8. The push for ‘Borderless Economic Communities’ in the ASEAN may give the medium-sized economies of the ASEAN nations – as a bloc – enough economic and political power to compete with India and China. However, as noted by ADB analysts, much institutional reform will be needed before this becomes a reality, and despite the existence of the plan towards 2030, little mention has appeared in gray literature since this publication.

  9. As of the present, the majority of service income in the region is based around travel and transport. As countries in the APAC move towards more service-oriented economies, especially services delivered via the Internet, imputing the volumes of trade going back and forth within the region is going to be a lot more difficult, making it harder for economists to determine trade volumes and future trends. For example, analyzing the impact of Uber or Grab on traditional tourist transport is a complex matter; Singapore has thus signed agreements with ridesharing operators to collect statistics on tourism-related ridesharing. Other countries and international organizations may need to do the same.

  10. Mike Rios, the founder of the international behaviour change lab 17 Triggers, believes that this time of catastrophic effects of climate change – drought, food shortages, mass migration, etc. will push social enterprises to the forefront, particularly with India leading the way. This is a narrative backed by certain innovations (indoor vertical farms, drones planting trees, solar shipping container refrigerators) aimed at tackling climate change at a decentralized, grassroots level [Core: THE WRATH OF NATURE], and may extend even further if large organizations or governments are willing to scale these cutting edge solutions. Saif Kamal, Founder of the Toru Institute of Inclusive Innovation, points out that even shared economy concepts rising from developing nations tend towards some shadow of social enterprise, attempting to address socio-economic problems. Optimistic minds may find this an opportune moment to reimagine present economic structures – many of which lead to unsustainable conditions, optimizing for short-term gains rather than long-term benefits. The replacement of traditional institutions with self-organizing emergence has been discussed, as well as non-mechanistic, more sustainable alternatives. The difficulty remains in putting these into practice.

This report has been written by Yudhanjaya Wijeratne, Merl Chandana, Sriganesh Lokanathan and Shazna Zuhyle of LIRNEasia with commissioning by the UNDP Regional Innovation Centre (RIC) as an exploratory and intellectual analysis; the views and opinions published in this work are those of the authors and do not necessarily reflect or represent the official position or policy of the RIC, United Nations Development Programme or any United Nations agency or UN Member States.

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