The 'Age of Asia' : Part 1 - What You Need To Know

The Asian century has begun. Collectively, the economies of Asia currently account for more than 50% of global GDP and 40% of worldwide consumption. Asia will shape the way globalization emerges over the next decades and have profound impact on the rest of the world. This is Part 1 of a two part series on the 'Age of Asia'.

Jakarta, Indonesia

This is Part 1 of a 2 Part post. McKinsey & Co. is the source for the basis of these posts. 

Asia can be segmented into four distinct business regions:

1. Advanced Asia : Australia, Japan, New Zealand, Singapore, S. Korea
2. China
3. Emerging Asia : Bhutan, Brunei, Cambodia, Indonesia, Laos, Malaysia, Mongolia, Myanmar, Nepal, Philippines, Thailand, and Vietnam
4. Frontier Asia and India : the 'seven stans' (Afghani, Kazakh, Kyrgyz, Paki, Tajiki, Turkmini, and Uzbeki) Bangladesh, Fiji, Maldives, Sri Lanka, and India

The regions are very diverse. For example, Advanced Asia has a per-cap GDP of $30-60,000, is highly urbanized, and has domestic markets that exhibit high-end consumer consumption. In contrast, Emerging Asia provides labor and has steady growth while being highly culturally diverse. Frontier Asia, conversely, has the least integration with the rest of Asia, but represent great new markets as they do integrate with their Asian neighbors.

Rising internal consumption and developed supply-chains are driving the Asia-to-Asia growth. Advanced Asia and China are investing in Emerging Asia. Frontier Asia and India have huge potential but they are hampered by a lack of modern infrastructure and heavy bureaucratic regulations; however, they have a large, young population and plenty of capital for investment. 

There are a number of Asian mega-cities that are competing to become innovation centers, equivalent to Silicon Valley.  Beijing, Shenzhen, and Wuhan in China, Jakarta in Indonesia, Yangoni in Myanmar, and Hyderabad in India are examples.    

Tourism between the Asian countries is booming and in contrast to the past, where Western culture had significant impact culture now flows in both directions, particularly from Japan to the West.

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In Part 2 of  'Age of Asia' we'll discuss how western businesses cope and prosper in dealing with this expanding Asian juggernaut.

AD: Fund-House Ventures      www.fundhouse.us