To thrive in the Asian Century, start with being relevant!

In addition to understanding the three trends my last article discussed, companies that aim to prosper in the Asian century must shape their strategy and operations around a single imperative: Be Asia-relevant. Here are a few whys and hows to help you get started on capturing opportunities in a more integrated Asia with stronger Asia-for-Asia dynamics.

Relevance #1: Adapt your operating model to the complementary characteristics of different parts of Asia

The complementary roles played by different parts of Asia open up partnerships and collaborations between them and develop new supply chains. Instead of viewing Asia as individual cities and countries, it is crucial for companies to be part of the intra-regional flows and networks and identify the synergies in this diverse and dynamic region. We see some interesting examples with an operating model that spreads across the region. In manufacturing, South Korean companies are building market share in Vietnam, especially in electronics and the consumer sector. In logistics, China’s Alibaba is developing a digital free trade zone in Malaysia to make cross-regional shipments more affordable for small and medium-size companies.

Relevance #2:  Don’t just limit to country-level perspectives, delve into cities and city clusters and integrate into local ecosystems across Asia

According to our research, about 420 cities in emerging markets could generate 45 percent of global growth, with 34 percent of that growth coming from cities in Asia. New cities across Asia are emerging as dynamic industrialization hubs. Their development has typically been enabled by receiving strategic and investment support from national and provincial governments, which has been a big draw for domestic and multinational businesses. One example is Jamnagar in India. Known as India’s Oil City and located on the country’s west coast, Jamnagar’s economy is driven by heavy industries such as oil, petrochemicals, cement, and fertilizers. The city’s overall industrialization index is growing at a compound rate of 40 percent per year. Accordingly, some cities that may not be well known today can be the destination for your investment in the future—so companies must factor new cities and city clusters explicitly into their thinking and integrate into local ecosystems across the region. 

Relevance #3: Invest in closing skill gaps and getting the workforce ready for Asia’s sustainable growth

Many developing economies in Asia are dealing with considerable skill gaps. Scarcity of skilled and semi-skilled IT workers is a big issue across Asia, and becoming more acute with the rising importance of digital. For the regions we call “Emerging Asia” and “Frontier Asia and India”, there is an imperative to boost their pools of available skills to benefit from growing working-age labor pools and rising demand for industrialization and innovation, while in the “Advanced Asia” region and China, automation requires more focus on switching occupational categories. Businesses operating in different parts of Asia can learn from one another and even join forces in developing tailored training programs to retain and attract more talent.

Being relevant to Asia today is vital to pinpoint new market opportunities, foster sustaining ecosystem partnerships, and—most important—obtain the skills that are required to fuel tomorrow’s growth.