See More on Facebook

News

OPINION: Asia to have largest GDP: Here’s what that means

The bulk of that growth will come from the developing markets of China, India and throughout South-East Asia and it will give rise to a host of new decisions for businesses, governments and NGOs.


Written by

Updated: January 28, 2020

In 2020 Asia’s gross domestic product will overtake gross domestic product (GDP) of the rest of the world combined. By 2030, the region is expected to contribute roughly 60 percent of global growth. Asia-Pacific will also be responsible for the overwhelming majority (90 percent) of the 2.4 billion new members of the middle class entering the global economy. The pressure will be on them to guide Asia’s development in a way that is equitable and designed to solve a host of social and economic problems.While these estimates paint a picture of massive growth in consumption, the reality is that consumption patterns will emerge differently across markets, with growth rates dependent on local demographics and other macro factors. For example, as the World Economic Forum’s Future of Consumption in Fast-Growth Consumer Markets work demonstrates, China’s ageing population will negatively impact the population dividend, but rising wages, urban migration, service jobs and an anticipated drop in household savings rates will boost consumption.Meanwhile, Indonesia, the Philippines and Malaysia are set to grow their labor forces significantly, leading to a rise in per-capita disposable income. The rapidly advancing digital economy in the region will provide additional access to the previously unserved and deliver on consumer demands for convenience and efficiency.All these macro forces are leading to a bipolarization of consumption, where consumers will have more power and simultaneously demand both premium and value-for-money goods and services. The consumer of the future is likely to be far more discerning in everything, from what she consumes (personalized/localized/healthy/sustainable) to where she shops (omnichannel, shopping at her convenience) to how she is influenced (less by companies and more by social communities).One trend that will play an increasingly important role is local and insurgent businesses outgrowing incumbents and beginning to disrupt the market — it’s visible across developed and developing markets alike. Nimble local players are winning as they take advantage of proprietary access and local familiarity. For example, Wardah has captured a 30 market share in Indonesia by focusing on halal-compliant cosmetics.Another advantage to local companies is a commitment to weather short-term turbulence. At one Indonesian conglomerate, the C-suite view is to take a secular view, invest it and stay the course — and not worry about the quarterly or yearly fluctuations in results.We are also seeing the continued emergence of Asian multinational corporation — Huawei in technology, DBS in Banking, Unicharm and Kao in personal care; and Suntory, Universal Robina and Indofood in food and beverages, to name a few. Entrepreneurialism is peaking with more than 140 unicorns in Asia as of 2019. China leads in the number of patents held in artificial intelligence and deep learning.Governments in developing countries across Asia-Pacific are in a race to overcome poverty, the lack of infrastructure and other significant obstacles to catch up with the rest of the digital world. The digital transformation and Fourth Industrial Revolution across markets will displace existing jobs and the distribution of jobs across sectors will shift considerably in the process.Employment is expected to rise in healthcare, spurred by the ageing population, for example. However, labor-intensive sectors such as manufacturing, transport and storage are likely to see a reduction in employment levels as a result of automation. It is expected that 53 million workers will have to be reskilled in ASEAN alone. This dynamic is further complicated by the rise of the gig economy, where qualified graduates are taking on jobs as ride-hailing drivers and food delivery couriers.Sustainability and its environmental, social and economic impact will also continue to rise on the agendas of governments and NGOs in the region. Both the institutional definition and scope for business will continue to expand to cover topics from health and wellness to diversity and equality opportunities. Investors will also have to play their part: Many large investors in Asia-Pacific have started shifting away from primary industries such as oil and gas, mining and agricultural commodities to business models that address environmental and social needs, such as renewable energy and for-profit hospital networks that offer underserved populations better access to healthcare.As this future unfolds, governments will need to get a few things right. They will need to create trade and investor-friendly reforms, promote social and financial inclusion, invest in hard and soft infrastructure and institute public-private partnerships.They will need to innovate and reform education to ensure there is a competitive and appropriately skilled workforce. While they make these moves, they will be required to balance technological advancement and job creation and talent reskilling, economic development and sustainability, and scale advantages and concentration of power. South-East Asia’s ability to live up to its growth potential will largely depend on it.

 

Praneeth Yendamuri is a Bain & Company partner and Zara Ingilizian is head of Shaping the Future of Consumption and member of the executive committee, World Economic Forum.



Enjoyed this story? Share it.


The Jakarta Post
About the Author: The Jakarta Post is one of Indonesia's leading English-language daily newspapers.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

News

Taiwan: 720,000 people registered for purchasing face masks online

Taiwan’s Central Epidemic Command Center (CECC) on Friday announced that more than 722,000 people — 600,000 using the NHI app and 122,000 more using the Emask system — had successfully registered for purchasing face masks as of 1 p.m. Asked about people who have reportedly tried to register again, CECC Chief Commander Chen Shih-chung called on the public to stop, stressing that authorities are committed to providing a set of face masks to each user prior to March 18, the official deadline for registration. Regarding some reported phone scams on payment requirements for face masks, Chen asked users to remain vigilant. Access is limited to Taiwan residents who need to register their NHI number, obtain proper digital certification and downloa


By Asia News Network
March 13, 2020

News

Covid-19 outbreak will continue for a year or longer; more stringent measures may need to be put in place, says PM Lee

 In a video address on his social media channels, PM Lee emphasised that the situation in Singapore remains under control. The Covid-19 outbreak will continue for some time – a year, and maybe longer – said Prime Minister Lee Hsien Loong in his second national address on the situation on Thursday (March 12). But if Singaporeans keep up their guard and take practical precautions, the country will be able to keep its economy going and people will be able to carry on with their daily lives, he said. In a video address on his social media channels, PM Lee emphasised that the situation in Singapore remains under control. The disease outbreak response level will not be stepped up to red, the highest level, he said. It is c


By The Straits Times
March 13, 2020

News

Foreigners play their part in Shanghai’s epidemic prevention

 Expat volunteers have been active in helping the city overcome the COVID-19 outbreak. Twelve foreign residents in Shanghai have joined a volunteer team to help with the city’s COVID-19 prevention and control. Located in Minhang district, the team was established on Feb 10 by the Jinfeng International Community Development Association, which aims to promote the development of Huacao town and the Jinfeng International Community by organising themed activities and public welfare events. Pakistani Amir Shafiq Khan joined the team to give back. “It’s easy to run away to another country, but I felt that my family and I should contribute to China in this difficult time as it has always offered opportunities to us,” says Khan, who has lived in


By China Daily
March 13, 2020

News

Asian stock markets take cue from US to hit fresh lows

ST Index careens into bear territory for the first time since January 2016 Many stock markets across Asia, including in Singapore, followed the United States into bear territory after US President Donald Trump stopped short of offering a detailed rescue package as the coronavirus outbreak was declared a global pandemic. Adding to fears, oil prices slumped further. The Straits Times Index (STI) careened into bear territory for the first time since January 2016. The last time that the STI was in a bear market – where stocks have fallen at least 20 per cent from their recent high – was during the oil price rout in 2016. The STI finished down 3.77 per cent yesterday, and more than 21 per cent down from a peak of 3,407.02 on April 29 last year.


By The Straits Times
March 13, 2020

News

askST: Can coronavirus be spread by sweat, or via activities such as singing?

There is currently no evidence showing that the virus can be transmitted through one’s perspiration. Concerns have been raised over social activities such as singing and exercising in the light of the coronavirus outbreak. As of Wednesday (March 11), Singapore’s largest Safra Jurong cluster of confirmed coronavirus cases went up to 40, against a total of 178 cases. The patients, who had attended a Feb 15 Chinese New Year celebration held in the ballroom of Joy Garden restaurant at Safra Jurong, are members of a Hokkien singing group. This has raised concerns as to whether the disease, known as Covid-19, can be transmitted through singing. Similar concerns have been expressed about whether the virus can be spread through sweat b


By The Straits Times
March 12, 2020

News

Bangladesh to benefit from coronavirus fallout: survey

Study says globally renowned companies are planning to shift work orders from China to other Asian countries, including Bangladesh. Bangladesh will benefit from the fallout of the coronavirus as most of the globally renowned companies are planning to shift work orders from China to other Asian countries, including Bangladesh, according to a new survey. Hong Kong-based QIMA, a leading provider of supply chain compliance solutions and which partners with brands, retailers and importers to secure, manage and optimise their global supply network, surveyed the executives of more than 200 globally renowned companies between February and early March. Half of the survey respondents are considering shifting supplier sourcing away from China to new countries or r


By Daily Star
March 12, 2020