BUSINESS STRATEGY 18
Asian Expansion T
he West’s dominance of the business world is universally heralded. It is evident in the type of language we use when discussing the global markets – the East is said to be ‘growing’ when, in truth, it is re-emerging to the stature it enjoyed back when it was able to exert its influence throughout the world, many centuries before Europe had even set the wheels in motion on its Industrial Revolution. Even the term ‘the East’ is a European construct, used to denote far away lands that were to the east and far-east of the perceived centre of the enlightened world. This language has been employed as a dovish control mechanism for centuries, and as such is unlikely to be supplanted at this advanced stage by something inherently fairer or more accurate.
However, Asia’s current march towards becoming the leading global economy is unprecedented, most pertinently in the way that it will shift focus from West to East; a tangible supplanting that has already encouraged thousands of companies to proactively engineer for themselves an advantageous position that will enable them to expand into the growing Asian market in the years to come. The IMF already predicts that Asia’s economy will, by 2030, be larger than the G7 and half as big as G20. Already India sends more than two thirds of its exports to markets other than Europe and the USA, and China is the biggest importer of Brazil’s exports, which are the primary natural resources that are fuelling China’s bullet-fast growth. Expanding into Asia, though, is not simply a case of ‘first come, first served’. The East is not waiting desperately for jaded middle managers from Europe to drop by to spread their European expertise: it has its own ideas and synergies, its own innovations and business models, its own technologies and its own ambitions. But it also has its own skills and knowledge shortages; it will make the mistakes normal for a growing economy, and it will call upon the assistance and collaboration of other markets for help. This is where the chance lies for European businesses hoping to make the most of this immense opportunity to secure for themselves a foothold in the most energised economic landscape on the planet. Businesses in Europe should not be daunted or dismissive; they must instead be ready, willing and able to adapt to change and share their ideas with their Asian counterparts, and here are five steps on how to do it.
Upfront.indd 18
Export knowledge and innovation The days of the West innovating and the East delivering are firmly on the wane. Aside from Japan – routinely classified as a proxy Western country despite its geographical location – the East has traditionally adopted the role of engine room, whereas the coming shift will see it as more of a driver, as indicated by statistics published in the European Commission’s ‘The World in 2025’, which predicts that China and India will fund 20 percent of the world’s research and development by 2025. Such spending will naturally require a skills set to implement it, so innovative European companies should be looking to export their knowledge to the East now in readiness for the cutting-edge thinking that will shortly be in high demand.
07/12/2010 15:02