The outlook for Asia and its emerging economies is attractive. A major driver of growth has been regional development through institutional transformation, and this has led Asia’s regional economic arrangements to continue expanding.

In 2015, the Association of South-east Asian Nations (Asean) will become a free-trade area. This will be significant because, with the elimination of import duties, producers and manufacturers will be able to afford raw materials at cheaper prices and a better quality from Asean countries. As a result, prices of products will be cheaper and can compete not only within Asean member states, but within other countries as well. In addition, there will be a freer movement of labour and components within Asia. This will lead to accelerated intra-Asia outsourcing, procurement and supply chain shortening.

Advertisement

Intra-Asian trade will also grow. Today, the Asean-China free-trade arrangement is the largest regional emerging market in the world. Asean countries officially launched negotiations with Australia, China, India, South Korea, Japan and New Zealand on a Regional Comprehensive Economic Partnership Agreement, to create a welcoming and competitive investment environment in the region. The negotiations are expected to be completed by the end of 2015.

A second driver of growth will be favourable demographics including a growing middle class, as well as a young population. Urban household income has risen partly due to real estate price increases, improving education and wage increases. Across Asia, the younger population’s demand for consumer electronic products will continue to be strong. 

The third driver of growth will be the increasingly expansionist private sector mindset in Asia, be they government-linked companies, multinational corporations or small and medium-sized enterprises. They are serving their local domestic markets as well as expanding into foreign markets.

Nonetheless, leadership succession is a serious issue with ageing Asian executives realising their existing businesses cannot rely on old processes, staff and markets. These older executives, who have long represented Asian values such as ‘sacrifice’ and ‘conformity’ are empowering and encouraging the new aggressive generation of IT-savvy, multilingual younger Asian executives to ‘think global, expand regional and defend local’.

Thus, it is a good time to be in Asia now.

Lawrence Yeo is CEO and principal consultant of AsiaBIZ Strategy, a Singapore-based management consulting firm providing Asia market research, market entry and expansion strategy and export/FDI promotion services. Website: www.asiabizstrategy.com