Asia has emerged as one of the world’s fastest-growing economies. The region’s soaring consumption is transforming it into a hub of global trade, capital, talent, and innovation.
This book explores Asia’s new economic era, shedding light on how it’s shaping the world economy. It also shows how to navigate the changing landscape of consumption, trade, and technology.
Asia’s soaring consumption
Asian consumption has been going through a paradigm shift. The demographic dividend coming through, the rise of domestic brands, the increasing prominence of lower-tier cities and the growing awareness of environmental and social issues are all contributing to this trend.
Asia’s middle class is also driving demand. This group is becoming more sophisticated and more affluent, which is increasing their purchasing power. It is also bringing new opportunities to consumer and retail companies as they target these consumers for growth.
The soaring consumer demand in Asia is a key driver for the future of consumer products and services across the region. It is also creating new business opportunities for foreign companies to serve these markets.
As consumer trends in Asia continue to evolve, companies will need to rethink their strategies and capabilities in order to capture this emerging market opportunity. A new MGI research paper will explore the key drivers behind these trends and how to respond effectively.
China and India will drive most of this demand. They are both the world’s largest markets for food, beverage, and confectionery products. In fact, these two countries account for more than a third of the global population’s total food and drink demand.
In addition, Asia’s large middle classes will help to fuel rising consumer demand in other parts of the region. As these middle-class consumers become more affluent and increasingly sophisticated, they will be seeking out branded products and services that meet their high standards.
The emergence of younger generations will further stimulate this trend. These generations, known as Generation Y and Gen-Z, are increasingly comfortable with their own culture and traditions and are not afraid to embrace their cultural identity. They are more likely to buy from local brands that can provide a more personal touch to their purchases.
Asia’s booming consumer base is also enabling the development of an extensive ecosystem of domestic and regional brands. These brands offer a wide range of products that are both affordable and of high quality. They are also often a reflection of the country’s cultural heritage.
Asia’s aging economy
The rapid decline in fertility rates and longer life expectancies has put Asia at the forefront of one of the world’s most significant demographic trends. By 2050, one in four people will be aged over 60. This is a demographic shift that has big social, economic and security implications for the region’s development.
While Asia’s aging population is not necessarily a bad thing, it poses new challenges for public finances and healthcare delivery and has the potential to significantly weaken growth in many countries. The report, Live Long and Prosper: Aging in East Asia and Pacific, suggests that effective responses require womb-to-tomb policies addressing issues such as child care, education, employment practices, health care, and pensions.
A growing older population requires more money to pay for health care, pensions and other services that are essential for a long life. But it also poses a risk to national budgets as governments struggle to cover healthcare costs and provide enough money to retirees. This challenge requires a paradigm shift in the ways that health, pensions and long-term health care are delivered and financed across the region to balance high coverage of benefits, adequate financial protection for older people, and fiscal sustainability.
To help countries deal with this trend, UNFPA supports policy reforms at the country level that improve the lives of older people. It helps develop national strategies and programmes that address ageing, and advocates a life-cycle approach grounded in gender equality and human rights.
Asia’s aging population has put the region at the forefront of a major global demographic shift, a report from the World Bank says. The number of people aged 65 or older in the region is expected to triple between 2010 and 2060, reaching close to 1.3 billion. This is a demographic shift that could prove difficult to overcome.
The report, which is supported in part by NIA, examines the demographic, economic, and health transitions that have taken place in the region over the past three decades. It finds that Asian economies are in relatively good positions to cope with aging.
Asia’s digital revolution
Asia’s digital revolution is creating tremendous opportunities for businesses and citizens alike. It is changing business models, boosting productivity and creating new jobs. In addition, it is enabling new technologies that have the potential to disrupt established industries and even entire sectors of society.
Despite this positive momentum, there are still a number of barriers that must be overcome in order to realize Asia’s full potential. For starters, digital innovation is not yet firmly anchored in the region’s economies.
This is particularly true in countries where entrepreneurship and innovation are still weak, including Thailand, Indonesia and Vietnam. The lack of a single, strong digital market and the unevenness of regulation across ASEAN are also major challenges to building an ecosystem that can compete with the likes of Silicon Valley and Hong Kong.
A digital regulatory framework is essential to harmonize and streamline laws that govern e-commerce, mobile payments, privacy protection, data governance and other key issues in the region. It should also provide a common set of standards to help companies build trust and confidence in digital services and facilitate cross-border flows of data.
While digital adoption has been rapidly accelerating in the tier-one and tier-two cities of ASEAN, this has not yet spread to rural areas. This is a critical area for the region’s governments to focus on.
To help accelerate a more rapid digital revolution, the government should remove the barriers that are impeding digital start-ups and investments. This includes reducing costs of entry, developing human capital, and establishing national digital policies that will establish a stable foundation for digital economy growth.
It is also necessary to educate the public about the value that digital technology and e-commerce bring to their daily lives. This will ensure that more people have access to the benefits of these services and that they can better use them to drive their own economic growth.
To support a digital revolution in Asia, governments need to promote digitization and provide citizens with the knowledge they need to be comfortable with the new digital landscape. This will not only make the world of work more efficient, but also open up new consumer opportunities and boost local business and manufacturing.
Asia’s green revolution
During the 1960s and 1970s, food experts like Paul Ehrlich predicted that millions would die from starvation in Asia. This prompted many governments to launch agricultural development programs that sparked a global revolution in crop yields and production.
Among the most important changes came from high-yield seed varieties and fertilizer use. The new seeds and fertilizers, known as HYVs, increased yields several fold. They also boosted the use of inorganic fertilizers, which are synthetic substances made from minerals and chemicals.
While these developments helped Asian farmers boost their output, the technology was only a small part of the story. Multi-cropping, controlled irrigation, and protection of food security were also key elements of the Green Revolution.
However, a significant amount of the Green Revolution success can be traced to other factors, including agricultural research and government policies that supported farmers’ adoption of new technologies. For example, India’s governments and international institutions such as the IRRI and CIMMYT were instrumental in ensuring that farmers across the country had access to high-yield seeds and other inputs.
Another key feature of the Green Revolution was the introduction of machinery to farming. This meant that it was easier for farmers to grow higher yields, which lowered prices and increased food consumption.
But there is a problem with this approach: it can result in land degradation and the loss of biodiversity. For example, growing higher-yielding varieties can deplete soil nutrients. The resulting lack of diversity can have serious consequences for agroecosystems and the environment as a whole.
Furthermore, it can create a dependency on agrichemicals, which have been linked to water pollution and the deaths of beneficial organisms. These agrochemicals are expensive, and many developing countries are not well-equipped to deal with the costs.
In response to these challenges, leaders from around the world recently called for a shift to conservation agriculture, which seeks to protect biodiversity and reduce environmental impacts. These approaches can include restoring abandoned and unproductive lands, reducing the amount of annual cropping on these lands, and shifting to more sustainable crops such as tree farming or agroforestry.
