Harnessing megatrends to accelerate growth in Asia

COMPANIES across the Asia-Pacific face an enormous challenge: staying ahead of the continuous change that is happening around us. In the decades ahead, 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. At HP, we call these megatrends. They are the socioeconomic, demographic 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 per cent in terms of purchasing power parity. And by 2030, two-thirds of all middle-class spending power will be concentrated in Asia.

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 US$0.46 trillion by 2030.

These urban centres 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 localised services and products - and businesses will need to deliver.

Go-Jek is a great example 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 expanded 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.

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, artificial intelligence (AI) and machine learning are evolving, and 5G will soon expand the opportunities of what we can do - and how quickly we can do it.

3D printing is similarly changing the ways in which businesses 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 US$22.7 billion market by 2022.

But automation on its own is not enough. Re-engineering business processes requires reskilling, employee education, potentially higher-wage jobs, and even new types of jobs. Businesses must upgrade their workforce alongside their technologies to realise 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 life-long learning.

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 sector to support various training and research programmes. In India, HP signed a memorandum of understanding (MoU) with the Andhra Pradesh Innovation Society (APIS) and the Andhra Pradesh Economic Development Board (APEDB) to build a Centre of Excellence (COE) for additive manufacturing. The COE will make HP's 3D printing services more readily available, giving SMEs and start-ups the opportunity to learn how they can apply advanced technologies to digitally transform their own operations.

Similarly, in Singapore, Asia's first HP-NTU Corporate Innovation Lab is driving innovation, technology and skills that are critical for industry transformation. The lab's 100 researchers and staff will focus on digital manufacturing technologies to specifically advance 3D printing, AI and other areas that will benefit both industry and society.

As we look ahead, it is undeniable that our region is one to watch. We will experience unprecedented change, growth and opportunity. By understanding the forces shaping our future, embracing new technologies, and collaborating with new partners, we will be able to accelerate our growth and prosper together.