For many decades, Advanced Asian economies—Japan, South Korea, Hong Kong, Taiwan, China, and Singapore—have achieved strong growth as a result of industrialization, export-oriented manufacturing, and technological adoption. Now, these economies face profound structural challenges that could stunt further economic progress.

The gradual trend of population aging is now accelerating, straining labor markets, reducing productivity, and increasing demands on public finances, all while governments face tighter fiscal constraints. At the same time, rapid advancements in AI and automation, coupled with shifting supply chains and trade fragmentation amid geopolitical uncertainties, challenge Advanced Asia’s dependence on exports as a driver for growth and employment.

With existing growth engines losing their effectiveness, policymakers and business leaders must rethink and redefine economic strategies. To address these converging pressures, Advanced Asia must pivot toward high-efficiency, low-labor growth models that harness innovation and inclusivity.

Social innovation is equally critical. By fostering lifelong learning, including broader populations, and encouraging intergenerational collaboration, these economies can tap into the full potential of their societies. Policies that enable active participation from various age groups can help mitigate labor shortages and create more equitable labor markets. Generative and agentic AI can also be better aligned with these goals, serving as a catalyst for inclusive growth rather than exacerbating inequality. Achieving these transformative goals will require a bold policy vision, fiscal innovation, and flexibility and adaptability from both governments and businesses.

Doing so will help Advanced Asian economies unleash their potential to become global pioneers in tackling these common challenges, offering a blueprint for other aging and technologically advanced societies to achieve sustainable and inclusive growth.