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EXECUTIVE SUMMARY
The Pacific Economic Cooperation Council (PECC) conducted its annual opinion survey of the Asia-Pacific policy community from June to August 2026. The survey gathered responses from more than 500 experts and thought leaders from government, business, academia, civil society, and the media across 23 economies. In a nutshell, it captures their views on economic outlooks, risks to growth, policy priorities for APEC Leaders, and the issues pertaining to artificial intelligence (AI) adoption.
Chapter 1 finds that respondents remain more optimistic about the prospects of the Asia-Pacific economy than those of the global economy over the next few years. While confidence in the region’s growth outlook reflects strong domestic demand, technological dynamism, and continued economic integration, respondents identify a number of risks that could undermine growth. “Increased protectionism and trade wars” emerges as the most serious threat, followed by global supply chain disruptions, inflation, inability to adapt to rapid technological change and AI and mitigate risks posed by them, and climate change. Compared with previous years, concerns over inflation and ability to adapt to new technological change and AI have intensified, reflecting emerging challenges faced by Asia-Pacific economies.
As APEC Leaders prepare to gather in China for their annual meeting, respondents identify five priorities of APEC cooperation:
These priorities reflect the dual challenge confronting the region: preserving the foundations of an open and predictable economic environment while preparing regional economies for technological and green transformation.
The State of the Region (SOTR) 2026-2027 has the central theme of “AI Adoption in the Asia-Pacific: Pathways to Economic Opportunities”. As revealed by PECC’s opinion survey, AI is increasingly being integrated into business, research, decision-making, and everyday activities. Around three-quarters and four-fifths of respondents report gains in productivity and efficiency, respectively. The findings highlight the importance of digital skills in AI adoption. Nearly eight in ten respondents view digital skills as a moderately important or very important accelerator, while seven in ten participants see insufficient digital skills or resistance to reskill as a very or moderately important hindrance.
Other key factors affecting AI adoption include costs of supporting information and communication technology (ICT) infrastructure, computing capacity and AI applications, organizational leadership support, and governments’ AI policies. Moreover, in addition to concerns about costs, respondents express concern about a variety of AI-related risks, including cyberattacks, scams, and frauds; data privacy breaches; and algorithm-driven errors, biases, and discriminations. The survey also reveals uneven levels of preparedness across the Asia-Pacific economies in several areas such as digital infrastructure, power grid scalability, AI safety and ethical frameworks, and workforce reskilling and transition. In addition, the findings suggest that regional stakeholders want APEC’s AI cooperation to prioritize: cybersecurity; workforce reskilling and transition; investment in digital connectivity and energy infrastructure; AI safety and risks; and interoperability of data and standards.
Chapter 2 places these survey findings within broader regional and global contexts. It shows that while AI adoption is expanding rapidly, intensive business use remains concentrated among a relatively small group of firms, sectors, and economies with strong digital capabilities and complementary investments in skills and organizational transformation. The chapter argues that access to talent, connectivity, data, standards, finance, and competition are among the key determinants of AI adoption and diffusion. It also highlights how the Asia-Pacific is entering a new phase of AI governance, characterized by a growing number of AI strategies, laws, regulatory frameworks, and safety institutions. It finds that the main challenge is now less a shortage of policy than the capacity to implement it, and examines AI transformation in health and education, where public authorities set the pace of adoption.
Three broad policy imperatives emerge from the analysis. First, economies should invest in skills development and workforce transition, as well as digital and other supporting infrastructure to ensure that AI benefits are broadly shared. Second, policymakers should pursue trusted and interoperable governance frameworks that balance innovation with safety, privacy, and accountability. Third, regional cooperation should focus increasingly on capacity building, implementation support, standards interoperability and mutual reliance on AI testing and conformity assessment, particularly for developing economies and micro, small, and medium enterprises (MSMEs), areas in which the APEC Artificial Intelligence Initiative (2026-2030) provides a shared framework.
Both chapters underscore the importance of APEC as a platform for cooperation in a period characterized by heightened economic uncertainty and rapid technological change. Through voluntary collaboration, capacity building, policy dialogue, and knowledge sharing, APEC can help economies strengthen regional economic resilience, support inclusive AI-enabled growth and development, and ensure that technological transformation contributes to a more integrated and prosperous Asia-Pacific region.
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