A celebrated expert on future trends, Manoj believes that ASEAN is on its way to overtake North Asia (Japan, S Korea) and the West in future.
Sapan: Why do you think ASEAN is such an economic hotspot?
Manoj: Asia, particularly ASEAN, is witnessing tremendous economic, political and societal changes over the last few years. Let me give you two examples that are quite interesting to analyse and predict how the axis of influence is already shifting to ASEAN
- As recently as early 1990s, Japan had the youngest work force among advanced countries. Today, it has the oldest. Compare this to Malaysia – 70% of the total population will be working age bracket by 2025. By the same year, ASEAN will be home to 470 million working adults – that’s almost 9% of the total global working age population. Compare this to North America that will have 240 million working people in 2025
- Implementation of AEC is creating free market economy that is already predicted to grow the combined GDP of ASEAN by over 100% (from $2.4 trillion to $5.2 trillion) in the next 8 years. This is opening up unprecedented opportunities to businesses to grow in the region – we estimate these businesses will generate 15 million new high skill jobs in the region to meet their growth
Marry these two – growing young population and opening up of markets – and the magnitude and far reaching impacts of ASEAN on the world suddenly become very clear.
How do you think Malaysia will fare among the 10 AEC countries and how can Malaysian businesses profit from this change?
Manoj: As part of AEC, Malaysia is already progressive to become a major competitor and a major consumer of goods and services along with other ASEAN nations. Even in current state:
- Malaysia is second in terms of having ASEAN’s most advanced healthcare system. 5 out of the top 10 healthcare companies in ASEAN are in Malaysia
- 40% of top manufacturing companies and 30% of the top telecom companies in ASEAN are in Malaysia
- Malaysia has reduced it carbon emissions by 33% between 2009 and 2015, further expected to reduce carbon emission by a total of 40% by 2020
- Malaysia remains to be the second-largest exporter of liquefied natural gas (LNG) globally – a cleaner and cheaper energy source than oil
All these put Malaysia in a very powerful position in the region and by 2025 it is expected to join the other 2 high income nations (Singapore and Brunei).
Our research shows that by 2025, Malaysia will be a highly integrated and networked nation with over 125 million connected devices – this will likely open up collaborative networks to increasingly gain economic power. Add to this the emergence of women entrepreneurs and business leaders, rise of the middle class and the reverse brain drain and you have a powerful story of how Malaysia is going to fast transform over the next 8-10 years.
Businesses sometimes have an obscured longer term view in a rush to produce quarterly profits, however, successful businesses in Malaysia (and ASEAN) will be the ones who are prepared for the future.
Manoj Menon MD and Snr Partner, Frost & Sullivan. Manoj is based out of Malaysia and can be reached at firstname.lastname@example.org
Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at email@example.com | +603 6204 5830