HP Innovation Journal Issue 12: Summer 2019 | Page 35

Accelerating Growth In Asia A letter from Tian-Chong Ng, President, Asia Pacific & Japan Companies across the Asia-Pacific region face an enor- mous challenge: staying ahead of the continuous change that is happening around us. In the decades to come, our economies will grow, our technologies will become more advanced, and the pace of innovation will be staggering. Deciding where to invest, how to think about the future, and ways to grow will become increasingly difficult. Managing this change requires that we understand the forces that will shape our business decisions long into the future: megatrends. They are the socioeconomic, demo- graphic and technological shifts that will dictate the ways in which we live, work, and play. Businesses should not only understand these trends; they should use them as the foundation of their long-term strategies. These trends help shed light on the demands of future consumers and employees, identify potential areas of future growth, and—if used correctly—can help propel businesses across Asia into a new era of productivity, innovation and economic opportunity. THE (CONTINUED) RISE OF ASIA The potential for growth in Asia is one trend that is impossible to ignore. Our gross domestic product (GDP) is already on track to account for more than half of global GDP by 2050. Our per capita income is expected to increase 600% in terms of purchasing power parity. 7 And by 2030, two-thirds of all middle-class spending power will be concentrated in Asia. 8 To be more specific, much of this spending power will be concentrated in cities across the region. Megacities (those with a population of at least 10 million) are expected to see the greatest rise in income and GDP growth, with some even becoming markets in and of themselves. Jakarta, for example, is projected to have a population of 36.6 million and a GDP of $0.46 trillion by 2030. These urban centers will be home to Asian workers who have seen their average household disposable income more than triple between 2001 and 2015. They will have different expectations—whether it be for more flexible work life or more localized services and products—and businesses will need to deliver. Go-Jek is a great exam- ple of a company that has paved the way for disruptive business models. While it started as a ride-hailing service in Indonesia, Go-Jek rapidly evolved to offer a full suite of services, and expand internationally. Leveraging technology, consumer insights, and an understanding of megatrends empowers companies like Go-Jek and other contenders to create new customer experiences and tap into new markets. SUSTAINING OUR GROWTH Asia’s rise will be driven by population and economic growth. But sustaining it will require an enhanced focus on productivity. Automation is already helping on this front. Smart machines are coming online, AI and machine learning are evolving, and 5G will soon expand the oppor- tunities of what we can do—and how quickly we can do it. 3D printing is similarly changing the ways in which busi- nesses conceive, design, produce and distribute products. It allows for virtual inventories to be used, cuts the need for physical spaces and shortens the supply chain. The on-demand production model also better balances supply and demand— so much so that the emerging technology could create a $22.7 billion market by 2022. 9 But automation on its own is not enough. Reengineering business processes requires reskilling, employee educa- tion, potentially higher-wage jobs, and even new types of jobs. Businesses must upgrade their workforce alongside their technologies to realize full productivity gains. It will not just be about the technical skills; the accelerated pace of change will require agility, the ability to adapt, and a preparedness for lifelong learning. THE IMPACT OF DISRUPTIVE TECHNOLOGIES The accelerated pace of innovation also poses a challenge to businesses across the region, as new products and technologies will be needed to deliver more value. One potential solution is for closer collaboration—between businesses, governments and consumers. By working together, industry’s strong research and technological capabilities can be used to advance societal and economic transformation agendas. HP, for example, partners with the public and private sec- tors to support various training and research programs. In India, HP signed a Memorandum of Understanding (MoU) with Andhra Pradesh Innovation Society (APIS) and Andhra Pradesh Economic Development Board 33