The spectacular growth of many economies in East Asia over the past 30 years has driven many foreign business enterprises to set out the vision and mission to move their revenue streams from traditional markets such as Europe and the U.S. to new emerging markets in Asia. Ever so often the statement to grow the business in Asia is set out by entrepreneurs driven by media reports of growing markets including China, Japan, Korea and India, while their home markets in Europe and the U.S. are declining.
These visions are understandable given GDP growth expectations in Asia at about 8-10% annually and Europe in comparison with a GDP growth of 1.5% p.a. But without in-depth knowledge and understanding the implications of market economics in this vast and diversified continent it is nearly impossible to define viable strategies for this dynamic region.
Asia is the world’s largest and most populous continent. Over 4 billion people – 60 percent of the world’s current human population inhabit the continent.
Asia has more kinds of land, more kinds of climate than any other continent. A space traveler flying miles above the earth might be able to see all of Asia at one time. He would see that Asia, excluding Australasia is much larger than Europe and Africa put together, or North- and South America together.
ASIA IS NOT EQUAL “ASIA”
In stating the vision to grow the business in Asia we have to ask the first basic question:
“Where in Asia is the business to grow?”
Asia is not only vast in terms of land size but hosts a variety of nationalities with very distinct ethnic populations, religions, languages (Switzerland – 4 national languages, India – 800 languages, Indonesia – 600 languages), cultures, histories, economic development and political factors that influence this decision making process.
Asia is the largest continent in the world by a considerable margin, and rich in natural resources, such as
petroleum, forest, fish, water, rice, copper, iron and silver.
Manufacturing in Asia has traditionally been strongest in East- and SouthEast Asia, particularly in mainland China, Taiwan, South Korea, Japan, India, Philippines and Singapore. Japan and South Korea continue to dominate in the area of multi-national corporations, but increasingly mainland China and India are making significant inroads. Many companies from Europe, North America, South Korea and Japan have operations in Asia’s developing countries to take advantage of its abundant supply of cheap labor and relatively developed infrastructure.
Financial- and Other Services
Asia has four main financial centers; Tokyo, Hong Kong, Singapore and Shanghai. Call Centers and Business Process Outsourcing (BPO) are becoming major employers in India and the Philippines due to the availability of a large pool of highly skilled, English-speaking workers. The increased use of outsourcing has assisted the rise of India as major hub for IT outsourcing and the People’s Republic of China as financial center.