Toward a Consumer-Centered Economy and Its Implications for International Trade and Asia's Development

Advances in communication and information technology enable companies to have more and more data and knowledge about individual consumers. As a consequence, products and services can be marketed more specifically or even customized according to the preference of the consumer. In this paper we argue that we are currently witnessing the emergence of a consumer-centered economy. In such an economy, the success of firms depends on how well they are able to integrate consumer information into the process of value addition. Producing standardized products will offer few prospects for success, even when integrated into regional or global value chains. For Asia, this new trend means that developing countries need to rapidly upgrade the skills of their work force, improve their information technology and transport connectivity, and lower their trade costs.