The Future Shift of Asia Header

The Future Shift of Asia

Since the beginning of 2009, I have had the privilege of working as Head of Asian Operations for Empresaria Group Plc. With three years working in this vibrant and dynamic region, I was invited by Andrew Hairs, Asia Regional Managing Director of Monroe Consulting Group, to write a blog on the differences between working in Europe (‘The West’) and in Asia (‘The East’).

It is difficult to make sweeping generalizations about the Asian continent with its three billion people and the wide social, political and cultural diversity. It is, however, clear that the world’s center of power has gradually been sliding eastwards for a while now. Over the past 10 years, Asia has accounted for half the world’s GDP growth and, from an Asian perspective, things are looking pretty good for the future.

Most Asian countries, Japan aside, barely noticed the global financial crisis while developed countries were hit hard and continue to struggle, with one economic crisis following the other. Open up a newspaper in Europe and the first ten pages are all doom and gloom. Do the same in Asia and it is all about new developments, investments etc.

In the past, Asia’s growth has been built primarily on the back of Western consumption or, more accurately, over-consumption. The West is now paying a serious price for this and it could take a number of years before sustainable economic growth returns. Asian economies, on the other hand, continue to march forwards relatively undisturbed.

With austerity plans in force in the West and once big spending Western consumers now saving their money – or at least not spending it – Asia needs a new market. This new market might well be Asia’s own population. Asia’s middle class is growing at an impressive pace. This consumption shift is a critical change.

Every Westerner who has been to Asia has witnessed that an increasing number of Asian consumers have developed an appetite for shopping – private consumption currently accounts for half of Asia’s GDP. I am still amazed, however, that even in the most upmarket shopping malls, restaurants or hotels on the Asian continent, services are still given with a smile. This is sadly something that has long been forgotten in the West. Asia is somewhere where you can enjoy spending money.

Education and knowledge are playing a key part in the growth of economies and some of these numbers are astonishing. India, for example, produces three million graduates a year and about twice as many engineering and IT graduates as the United States. In addition, partially because of the challenges posed by the lack of infrastructure, Asia is also witnessing a fast rate of adoption for E-learning.

Given all of the above, it is evident that, as a whole, Asian economic growth will continue to outpace that of the West. Led by the sheer scale of growth in India and China, but also influenced heavily by the likes of Japan, South Korea, Indonesia, and Vietnam, the center of wealth generation is clearly shifting eastwards. There will be a steady and increasing shift of wealth to Asia from Europe and the US. The shift of economic power to Asia is pretty much a safe bet for 2020.

There is one big problem: the talent crunch is hindering the aggressive expansion plans. As the economies in Asia move more and more toward high added-value services and production, professionals are needed. This is exactly the issue – talent is limiting growth in Asia. To grow full-spectrum businesses, Asia needs leaders and professionals who have the skills, experience and capabilities that go beyond the traditional-low skilled labor force that Asia was known for. The local talent pool is extremely shallow and recruitment agencies (such as ours) find themselves in what is very much a candidate-driven market. In the West, the opposite is the case. This means that client companies in Asia must focus on employer branding in order to attract the best talent. Companies that want to tap into Asia’s next phase of growth have plenty of work to do if they want to build a new pool of managers and professionals capable of delivering future success.

Although it is difficult to make a general statement, the other big difference and driver behind the growth in Asia is the work ethic. I think it is fair to say that the Asian work ethic is significantly different to that encountered in the West. I have found that many people – be they colleagues or employees – in Asia have little hesitation working in excess of ten hours a day, and in India working these long hours six days a week. Often without complaint. Young Asian professionals are keen to work hard to achieve or maintain lifestyles that allow them to go out to better restaurants and clubs or afford a car or rent an apartment. These people aren’t greedy or workaholics; they simply need to work hard to make sure their needs can be filled to the levels that we in the West perceive as minimum standards.

The mindsets of people in the East and in the West differ hugely and even though many books have been written on this subject it is something you can never really fully understand. The key difference seems to be that workers from the West are more individually motivated, while Asians are more group motivated. If someone in the West has finished all of their work by 5 p.m., they head home satisfied. An Asian in the same situation, however, would probably stay until everyone had completed their tasks and the manager allows them to leave the office. In Japan, employees enjoy going out for a drink and bonding after office hours, not leaving the bar until the manager stops ordering drinks. If you ask an Asian student who he thinks is the most important person in the world, he most likely will answer that it is his boss, or his parents or wife, husband etc. Ask the same question to someone in the West and he will answer “myself.”

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