Despite rapid economic expansion,many Asian nations are struggling with sluggish productivity growth. A significant portion of the region’s recent advancements stems from increased investment rather than enhanced efficiency in converting resources into outputs. In numerous cases,productivity gains are either decelerating or declining altogether.

Even when productivity is on the rise, the rate of improvement isn’t sufficient to close the gap with leading companies in developed nations like the U.S. Throughout the 2010s, prominent firms in Southeast Asia experienced productivity growth that lagged behind the global average, while China managed to maintain pace.

“In just about every Asian market, productivity as a measure of GDP divided by GDP per capita is stagnating or declining,” says Simon Tate, Asia-Pacific president for Workday. “Every executive that I talk to is worried about productivity,” be it from aging populations, ineffective government policies, or the increasing prevalence of remote work.

historically, Asian businesses addressed productivity challenges by simply increasing their workforce. Abundant,inexpensive labor enabled manufacturers and other companies to expand operations without negatively impacting profit margins.

Though, as Asian economies mature and populations age, relying solely on increased hiring is no longer a viable solution. “There are no more people,” Tate says. “There is no more productivity to be gained from just throwing people at the problem.”

Empowering the Next Generation

Executives such as Tate frequently enough suggest that AI, especially “agentic AI,” can boost productivity. These advanced AI systems can, in theory, independently execute tasks defined by users, thereby freeing up human employees to concentrate on more complex activities.

The vast majority of asian companies express a desire to implement these technologies. According to an Accenture survey conducted in February, 90% of Asian businesses are planning to incorporate some form of agentic AI within the next three years.

However, the practical implementation of these models presents a challenge, particularly for older executives who lack experience with AI, let alone AI agents.

Tate points out that Asian workplaces will soon encompass five generations, from baby boomers to Generation Alpha.

“Generation Alpha will have a higher degree of digital fluency than the other four previous generations combined,” Tate says, adding that current HR departments are “not at all prepared” for the influx of digitally adept young workers.

A recent Workday report indicates that approximately 80% of Gen Z workers in asia-Pacific desire access to the latest technologies in their workplaces, with over two-thirds viewing the absence of cutting-edge technology as a drawback.

Tate believes that simply providing younger employees with opportunities to thrive is insufficient. He proposes that Asian companies should go further by recognizing younger generations as valuable sources of expertise.

“When you look at the make-up of boards of the top 100 public companies across APAC, board positions-even advisory board positions-are still very much made up of baby boomers and Gen Xers,” he says, with “close to zero” positions held by those in their twenties and thirties.

Tate recommends that companies consider “reverse mentoring,” where younger employees train older colleagues on the optimal applications of new technologies. similar to how millennial or Gen-Z founders might invite older individuals to serve on their boards, Tate suggests that established companies consider appointing younger members to offer their expertise on technology and business.

“We just falsely assume that thay’re too young and they don’t have any good ideas,” he says.”If you put a bunch of really bright,super ambitious people in a room and throw a problem at them,they will add value in helping to solve it.”