An Ideas-Based Online Magazine of the Global Network for Advanced Management

Asia: Still a Growth Engine

Asia, while decelerating, is still the world’s growth engine.

Rapid growth is probably the greatest positive factor driving the growth of entrepreneurship in the region. Most Asian countries have government programs meant to support priority industries. However, in the developing countries, the compliance burden and weak infrastructure continue to be a challenge for entrepreneurs.

On the positive side, virtually everywhere in the region, the social status of entrepreneurs has increased rapidly in recent years and so have the institutions and organizations supporting them. These include media programs and companies devoted to supporting entrepreneurs as well as organizations supporting entrepreneurs, including those that feature entrepreneur-mentoring programs. Especially, in the developing countries of Asia, the large populations of millenials, who seek more control over their time and are better versed in the tools of e-commerce, are driving entrepreneurial activity.

What are some of the key elements of the entrepreneurial environment in Asia?

Asia is an extremely diverse region. Asian countries run the gamut from innovation-driven, highly industrialized economies such as Japan and South Korea to efficiency-driven economies such as China and Indonesia to factor-driven India.

While necessity-motivated Asian entrepreneurs tend to focus on local markets, many Asian enterprises, especially those looking to scale, tend to focus on export markets. Intra-Asia trade has become increasingly important, especially in the wake of decelerated demand from the West and accelerated Asian demand arising from increasing Asian wealth. In recent years, the availability of online platforms and global logistics solutions have allowed even smaller enterprises to create viable business models addressing micro-niches. As many economies in Asia leapt directly onto mobile platforms, many Asian business models leverage the typically high utilization of mobile technology in Asian economies.

A key concern for Asian entrepreneurs is to find the right mix of local versus international customers and to leverage their internal capabilities and the domestic factors available in the countries in which they operate.

What are telling success stories from your country or region?                          

Here are some Asian success stories that represent the great diversity of Asian entrepreneurship. CJ E&M, the Korean entertainment group, is leveraging Korea’s unique take on popular culture, South Korea’s technological edge, and partnering with companies across the globe creating what could be an Asian global entertainment powerhouse. Philippine-based Potato Corner, a fast food chain specializing in flavored french fries, typically moves into a new market with a first mover advantage and focuses on rapid growth to dominate the market. It’s micro-franchise approach and positioning as mainstream, rather than a Philippine or regional brand, allows it to rapidly penetrate a market. Alibaba and Wechat, both from China, represent a massive change in the way entrepreneurs do and will do business. While it is easy to dismiss  Alibaba as simply the Amazon of China, it is important to remember that Alibaba has just recently bought Lazada, which gives it a strong foothold in Southeast Asia, one of the fastest growing regions in Asia. The most exciting parts of the WeChat model (e.g. the e-commerce solutions) are, thus far, primarily confined to China. Once the company finds a way to export this model to other countries, it will create a vastly different operating platform for many entrepreneurs.