It is neither easy nor correct to generalize Asia on any parameter. This holds true for both Asian culture and economy. It is even more true of businesses in Asia. The region’s societies, cultures and economies are at once interesting and complex. They represent a grand medley of languages, religions, customs, traditions and business pursuits.
There is no homogeneous “Asian business” and there is no single “Asia model.”
The Asian Institute of Management is one of the few schools that have, over its 50-year history, mastered the Asia theme. Knowing Asia and being able to advise in Asia requires viewing the business through two complex lenses.
The first has to do with appreciating the nuances of the Asian family enterprise and comprehending the tones of adaptation required of multinational companies. This lens also involves understanding, in context, the vibrant startup and entrepreneurial eco system of the continent.
The second lens is about the changes in business innovation, consumer behavior, big data, and digital transformation as they take place in Asia.
In the 2016 round of the Global Innovation Index, Asian countries climbed the ranks. Singapore rose to 6th position (2015, 2017: 7), South Korea to 11th (2015: 14), and Japan to 16th (2015: 19; 2017: 14). Of course, Hong Kong (2017: 16) and China (2017: 22) also consistently place among the world’s top innovative economies.
What is striking, however, is the way the average Asian consumer’s behavior and buying patterns are changing. The rise in individual and household incomes have triggered changes in both spending and consumption patterns across the region.
For instance, Asian consumers are now more inclined toward discretionary spending. This is most apparent in how they consume telecom products and services, education, entertainment, and healthcare, which has opened many new avenues for businesses.
Euromonitor International forecasts that Asia Pacific’s per capita annual disposable income through 2020 will increase by 35.2% in real terms and per capita consumer expenditure by 37.2% in real terms. Key emerging market economies in Asia will continue to drive this growth in consumer spending.
8.6B more IoT devices by 2020
Data, the new oil, is the biggest emerging opportunity for businesses and is definitely expanding in Asia. According to IDC, Asian businesses that prudently invest in data are likely to garner an extra US$65 billion in productivity gains by 2020 compared to their less data-driven peers.
Over 50% of businesses in the region believe that big data is crucial to their future success. Some of these businesses are already devising strategies to reap the benefits of the surge in data (over 90% of all data ever gathered has been created only in the last two years). Those who do not will be booted out by the competition.
The growth in the big data and analytics market is propelled by the growth of the digital transformation and the Internet of Things (IoT). According to Future Ready Singapore, the number of connected IoT devices in Asia is expected to increase to 8.6 billion by 2020, up from 3.1 billion in 2015. Now, IoT devices (e.g., fitness trackers, smart TVs, smartphones) contain sensors that track and access data.
Back in 2013, Bain & Company predicted that the number of Internet, 3G, and smartphone users would grow explosively in Asia, as would digital innovation by businesses. The Asian business opportunity ― and, in turn, the leadership and managerial challenge ― is exciting.
Even as businesses in the region gear up to leverage opportunities and face challenges, so is the Asian Institute of Management betting on regional business strategy, innovation, consumer behavior and data science as future areas of focus and levers of business influence.
AIM Consulting, the business advisory arm of the Institute, is mandated to leverage the faculty’s expertise on Asia to engage clients, partnering with them for their next phase of growth.
Life with a difference
Since joining the Asian Institute of Management, I have tremendously enjoyed meeting its professors and researchers and immersing in an ecosystem that is upbeat even as it inspires thoughtful debate.
For the greater part of my career, I represented the corporate world as a client consultant and a business leader. I was hardwired to be hungry for business, revenues, efficiencies and profits. I do not suggest all that is gone now. I have, however, begun to focus as well on matters beyond transactional undertakings; beyond what my P&L-driven, bottom-line-centric, professional life used to be.
For me, working at AIM is life with a difference, an infinite appetite for learning and a mission beyond numbers. Of course, there is still a solid niche consulting aspect, exciting client activity and, above all, an intellectual rigor in my work at the Institute. But the steepest learning curve for me at AIM has to do with Asia itself.
Being Asian and having led client engagements and business oversight across Asia Pacific in my previous roles, I thought I had authentic and updated knowledge about Asia.
I was proven wrong within a very short time at AIM a knowledge creator, a valued adviser to businesses, an authority on Asia and its economies, cultures, geopolitical dynamics and heterogeneous consumer behavior.
Some of my knowledge has been upended, some of it, refreshed or updated; but never before have I regarded Asia the way I do today.
Rajesh Nair is Executive Managing Director for AIM Consulting at the Asian Institute of Management. Prior to AIM, he worked for Time Inc. as Executive Director for Customer Marketing & Revenue and in various leadership roles at The Nielsen Company (Asia Pacific), among others. To know more, e-mail RNairMT@AIM.edu or visit AIM.edu.