Tech tops complexities of Asian business
TECHNOLOGY, through either disruption or the need for innovation, is the leading complexity facing Asian businesses today, according to Baker McKenzie.
In a survey of 150 Asia-Pacific-based business leaders by the leading global law firm, 44 per cent of the respondents were either based or do business in Thailand.
In the “Asia-Pacific Business Complexities Survey 2017”, the No 1 complexity identified by companies across the region was the need to drive innovation by adopting new technologies.
This was followed by cost pressures/shrinking margins and technological disruption from competitors.
A full 84 per cent predicted that disruptors would likely challenge their businesses within just two years.
This rose to 97 per cent among financial institutions and 96 per cent among consumer and retail companies.
Geopolitical complexities were also a major concern, with the demise of the TPP set to impact 79 per cent of respondents.
The geopolitical trends were also reflected in the survey, with an overwhelming 95 per cent of respondents predicting Indian economic influence in the region would grow in the coming five years, compared with 77 per cent who saw China’s influence as continuing to expand.
“The world of business is more complex than ever,” said Gary Seib, chair of Baker McKenzie Asia-Pacific.
“Identifying where companies and industries see predicted complexities emerging can help both governments and businesses themselves better prepare for this rapidly changing environment.
“That technology is at the top of the list is probably not a surprise to many, but the number of companies that expect disruption by competitive technology in just the next two years should give pause to any corporations that see themselves as immune to these forces.”
Several other key trends were drawn out of the research, including a strong prediction of increased mergers and acquisitions (M&A) activity across the region, with 94 per cent seeing a rise.
Litigation was also seen as on |the increase by two-thirds of businesses.
The three key areas of focus for corporations operating in Asia-Pacific in terms of solving immediate complexities were regulatory change, optimising tax structures and business systems innovation.
