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Monday, August 8, 2022

The Future Value of ASEAN Nations for Entrepreneurs

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As a whole, the combined ASEAN countries are set to be the world’s fourth-largest economy by 2030. But that assumes a few things — of note, the group’s manufacturing capabilities. To meet that lofty goal, the ASEAN manufacturing sector must not only grow far beyond its current 5% contribution to the global sector, but it must also grow in a smart and prescient manner that looks to the future like no other region on the world stage.

So how can the region do it? Well, the answers are simple, but the work will not be easy.

Related: 4 Things to Consider When Choosing the Best Asian Country for Business Expansion

Take advantage of the growing and dynamic domestic market

In most ASEAN nations, there’s a burgeoning middle class that is both hungry for new goods and increasingly sophisticated in its tastes. 396 million of the region’s people will rise into the middle class by 2030.

The region may look to create the goods that these hundreds of millions of people will demand — packaged foods, automobiles, consumer electronics and any number of other trending goods on the horizon. This alone won’t be enough to propel the region into the upper echelons of global manufacturing, but it will provide a much-needed foundation.

Its ability to create supply chain resiliency 

The last few years have seen continued economic brinkmanship between the US and China, with many leading companies beginning to question their reliance on China’s manufacturing faculties.

While the region may not be the comprehensive alternative to China, many MNCs are adopting this policy under the guise of “China Plus One”, where they keep their main manufacturing operations in China and branch out to other nations to supplement their output.

Technological trends improving automation in manufacturing 

The problem in Southeast Asia at this point isn’t manufacturing capacity, it’s technological sophistication. The region has low-wage labor and a growing global middle class for technological consumption — and the two just don’t match up. What it needs are high-tech skillsets and facilities to match this growing demand.

This is where technology comes in. Robotics, 3D printing, augmented reality and other technological advances are making it easier than ever for factories to be run with a fraction of the current human workforce — all while producing products that human hands could not.

If the region embraces these technologies and uses them to improve our factories, it will be possible for the region to compete with the likes of China on a technological level.

Related: What it Takes to Create a Leading Fintech Hub

Use the power of public-private partnerships

Last year, the Economic Development Board (EDB) of Singapore, Enterprise Singapore (ESG) and private sector partners came together to create the Southeast Asia Manufacturing Alliance (SMA). It will allow global manufacturers to access a network of business parks in Singapore to help them expand with relative ease.

By utilizing the capabilities and networks of these business parks, international manufacturers can integrate themselves into Singapore’s manufacturing sector, effectively and quickly diversifying their manufacturing capabilities.

The outlook for ASEAN is positive, but it wholly relies on a united and extremely proactive front. The region has a chance to capitalize on everything that it has been built over the past few decades, and entrepreneurs can’t afford to let it go to waste.

Related: 7 Reasons Why Hong Kong Is Still Asia’s No. 1 Spot for International Business

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