Neeti Virmani
Asia is the largest continent in the world, in size. There was a period in history when the population size was impacted by the high mortality rates as a result of lower educational and health standards. With better education about birth control, the number of people surviving the reproductive age kept increasing. With the dramatic growth in the population, at 4.8 billion, the continent is home to 60 percent of the world’s population and 50 percent of the world’s 3.2 billion middle-class population. It is the fastest growing economic region with the largest GDP in terms of size, at USD 41.78 trillion and 5 percent growth. While countries from South East Asia, South Asia and Asia Pacific, like South Korea, China, Taiwan, Thailand, Singapore and Hongkong, Indonesia and Malaysia, grew much earlier, with annual per capita GDP growth of at least 3.5 percent for 50 years, over time, Asia has seen the growth getting unlocked in other countries also including India, Vietnam, Philippines, Cambodia, Bangladesh, Nepal, Myanmar, Azerbaijan, Laos and some of the Central Asian economies like Uzbekistan, Kazakhstan and Turkmenistan. Even Japan has been growing at 3.3 percent over the past 50 years. Some of these economies grew at least 5 percent annually over the past 20 years. Diversified growth has helped in sustainable growth in the region.
The rapid population and globalization increase fueled overall consumption patterns and economic growth. With the population moving to the cities, the emerging markets in Asia have seen increasing urbanization with a burgeoning young population and middle class, with a median age of 32. India’s 70 percent plus of the population is youth, with 4 in 10 people aged 19 or younger. The shift to the cities, coupled with an increase in employment, led to the formation of ecosystems where small and medium enterprises across sectors could thrive: IT, real estate, construction, education, banking, healthcare, pharma, life sciences, nuclear, financial including insurance, logistics and other services. This led to a continuous increase in the incremental growth level. Economic growth leading to an increase in purchasing power is helping in attracting greater foreign direct investment that has played a crucial role for the Asian economies in bringing in the technical knowledge and state-of-the-art goods and services into the economies, creating competitiveness leading to high-quality products and more innovation. In Southeast Asia, more than 100 million people are expected to move to cities between 2015 and 2030. In Southern Asia, it is 260 million.
“There is clearly a turning point in Asia’s growth trajectory, and it is all set to pivot again. Asia is no longer just an opportunity. It is leading the world’s growth momentum.”
The growth also saw a shift from agriculture to manufacturing, industrial and services sectors. With a focus on improvement in the skillsets, the demand for jobs increased, leading to lower labor costs. 52.4 percent of the population in Southeast Asia believes in upgrading its skill sets. The dynamism and growth mindset of youth brought innovation through entrepreneurial initiatives, which also led to the fast-tracking of the digitization process. The number of people desiring to join a foreign multinational is on a decline and is being replaced by a strong willingness to innovate through an entrepreneurial mindset. The internet penetration is at 75 percent plus, with 80 million users having gotten added in 2020 and 2021 in Southeast Asian countries. Overall, Asia accounts for half of the world’s 2.2 billion internet users. Additionally, the quality of the internet speed offered by the telecom players is much superior in quality, as compared to that offered in other continents, which has led to world-class innovations. For example, continuous video streaming for hours is possible even in subway train networks in some Asia Pacific and Southeast Asian countries. Few Asian countries have been far ahead in the launch of the 5G network. Video gaming, AR/VR platforms, and E-commerce are booming across Asian markets, apart from path-breaking, futuristic ideas being brought to reality through new-age strategic technologies like cloud computing, quantum computing, cyber security, Web3 or Metaverse, AI, Robotics, IOT, Blockchain, Satellite and Drone technology. Growth of alternative proteins, whether plant-based or cultured meat, has moved to a very different level, with private and public institutions investing heavily to reduce the per kilogram cost of meat to make it more accessible to the larger population. These innovations have unlocked productivity and are also leading to shifts in paradigms embedded in the deep-rooted culture. Companies like Grab, WeChat, Alipay, Naver, Kakao, IndiaMart, Zomato, and PayTM have transformed consumer behavior, communities, societies, and demographics. With Covid, technology-based innovations grew multiple folds. Whether it’s vaccinations, PPE kits, digital apps for senior citizens, financial inclusion through capturing the underserved population, senior citizens upgrading their IT and digital skillsets, tracking and tracing medical apps for managing and controlling covid spread, e-commerce, food ordering, cloud kitchens, education, blockchain-based solutions, crypto-currency, property tech, HR tech for recruitment and tracking employee productivity, AI and drone technology for tracking pesticides in crops, tech-based platforms providing last mile service, advanced construction techniques, automation systems to manage energy consumption, data-driven transit planning, using public transport for managing logistics, data-driven disaster risk management, the growth curve has been steep.
Asia accounts for 40 percent of global investments in startups. At 45 percent, it has the largest share of renewable energy. Asian GDP is expected to be more than 50 percent of the global GDP by 2040. Asian corporations contribute USD 19 trillion in revenue to the world economy each year. Forty-four percent of international students are Asian. One hundred nineteen of the global unicorns are Asian. Two hundred ten of the world’s largest companies are Asian. Asian companies’ leadership is committing to net zero emissions. Asian countries also saw the newly built smart infrastructure, transportation, airports, and airlines transform the continent in the last 20-plus years. By 2030, more than 95 percent of the senior population in Japan and Korea is expected to be online. Sixty-five percent of the global middle class is expected to be in Asia. Forty percent of global consumption will be from Asia. Personal financial assets in Asia are expected to represent approximately three-quarters of the global total by 2025.
The region’s growth and attractiveness to investment are no longer about Japan, China, or the Tiger Economies: it is about growth in every country across every sector. The role of China is also seen as a country where consumption for high labor-intensive exports from labor intensive countries in Asia is increasing. Even though the region may have certain economies that are not growing currently, they have high-performing, high-growth companies that would be growing faster than their OECD counterparts. The young population believes in doing “business with purpose.” Hence, the world could expect sustainable, more inclusive growth from Asian countries. Asia’s sustainability landscape has an expected addressable market size of USD 4 trillion to USD 5 trillion across 11 sectors. This is clearly a turning point in Asia’s growth trajectory, and it is all set to pivot again. Asia is no longer just an opportunity. It is leading the world’s growth momentum. The question is, “Are you leveraging the momentum or missing the ride?”
