BEIJING - China's gross domestic product (GDP) is expected to triple to $17.7 trillion from the current $5.9 trillion by 2030, and growth must be built on sustained investment in the capabilities of individuals and teams.
That's the conclusion of a report published by Boston Consulting Group (BCG) on Friday.
By 2030, the country's GDP is projected to increase by $11.8 trillion, of which around 62 percent, or $7.3 trillion, will come from investment in economic "software" - business model innovation, professionalization, employee training and the manufacturer of higher value-added products - said the report.
Meanwhile, the remaining $4.5 trillion will be generated by investment in "hardware", including roads, railways, utilities and production equipment, it said.
"China's work force is at its peak, and the first-wave growth, based on absorbing surplus labor from agricultural and low-productivity jobs is fading," said David Lee, a Shanghai-based partner at BCG, and one of the primary authors of the report.
China's growth can and must be built on sustained increases in per capita productivity, as the country's demographic dividend is coming to an end, he said.
"When people talk about productivity, they often think about manufacturing, but it's about more than that," said Lee.
Productivity is built on individual capabilities and the processes that define how groups get work done in all kinds of business activities, he said.
He added that China must increasingly move into the service industries and so-called "knowledge work".
Hans-Paul Brkner, the president and chief executive officer of BCG, said, "China is at a turning point. For companies and for the entire economy, we are moving beyond the first phase of the take-off.
"The next phase will be defined by capabilities."
China's 12th Five-Year Plan (2011-2015) also emphasizes this change, in which structural reform of the economy is seen as crucial to further growth.
The country must navigate a path of further economic efficiency while avoiding wage inflation and stagnation that will put per capita income growth at risk, according to the report.
But while the government can indicate the general path in its plans, concrete change will have to be built on a series of small actions.