HP Innovation Journal Issue 12: Summer 2019 | Page 37

MOVING FROM COUNTRY-CENTRIC
TO CITY-CENTRIC GROWTH MODELS
According to some estimates, South different strategy. By and large, this
and Southeast Asia (excluding India) has worked up until now.
are home to approximately 195
cities with populations of more than
one million people. Six of the top
20 megacities are in this region as
well. Outside of China and India, this
presents the next big opportunity
for companies wishing to tap the
enormous potential of Asia.
With rapid urbanization, innovation,
and the spread of technology, we
need to reassess that assumption.
At the macro level, Indonesia is
indeed very different from Malaysia
and both are different from the
Philippines. However, if you dig
deeper and look at the cities that
such issues more closely. It might
make more sense to have a similar
strategy for large megacities across
political and geographic boundaries,
and likewise for different city-type
clusters, versus a country-centric
model. Naturally, in adopting such
a strategy, one needs to be mindful
of significant cultural and language
differences.
Traditional business models have make up these great countries and Regional groups like ASEAN are
depended on an organizational cultures, you might notice a lot of moving, albeit slowly, toward a
hierarchy based on country similarities. For example, is Jakarta common-market-like structure.
lines—for example, a country all that different from Manila? Even without such a move, it makes
team dedicated to, and based in, Within Indonesia, are the challenges increasingly more sense for compa-
Indonesia or Thailand. This has and opportunities in Surabaya the nies to address opportunities across
allowed companies, particularly same as those in Makassar? Or is countries by city type or clusters
multinational companies, to grow Makassar more similar to Khon Kaen of cities. This may afford compa-
organically in those markets while at in northeast Thailand? 
the same time respecting local cul-
tures and traditions. The standard
narrative has been that each country
is different and therefore requires a
Companies, in their search for
growth and economies of scale at
the same time, will have to examine
nies the scale needed to address
often-neglected smaller markets and
to leverage best practices across
different countries more efficiently.
Significant opportunity awaits.
FAST FACTS: ASEAN RISING
WORLD’S 3RD-LARGEST GLOBAL DOMESTIC PRODUCT BY 2022
5.3% ANNUAL ECONOMIC GROWTH SINCE 2000—ABOVE GLOBAL AVERAGE OF 3.8%
2ND-HIGHEST NUMBER OF MIDDLE-CLASS HOUSEHOLDS IN THE WORLD BY 2020
COLLECTIVE MARKET OF >640 MILLION CONSUMERS
1/4 OF ASIA-PACIFIC’S HOUSEHOLD INCOME BY 2030
24% OF BUSINESSES ARE DIGITAL LEADERS (GLOBAL AVERAGE IS 16%)
EXPECTED TO CONTRIBUTE 34% OF CONSUMPTION GROWTH BY 2030 ( vs . GLOBAL FIGURE OF 25%)
DUE TO ROBUST POPULATION GROWTH AND RISING INCOMES
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