December 17, 2013 | Valerie Wong
Entrepreneurs everywhere are generally having a positive outlook on business in Asia. This is a thought echoed by many economists, business leaders and politicians. But what does the future hold for business on the continent? We all know that in the last couple of years, many Asian countries have experienced tremendous amounts of growth in their economies, with increased output, as well as growing interest in the region by foreign investors.
As for local populations, they too maintain a lot of optimism for business development in the region. In a recent Legaturn Institute survey of over 4,000 entrepreneurs and business managers, more than half have stated that their countries are now more welcoming towards those who start their own business, as opposed to a decade ago. Generally, the majority believe that in the next five years, their lives have the potential to improve in a significant way.
There are certain trends that one must watch if they want to know about the future of business in Asia. One of them is expenditures in research and development (R&D) by countries on the continent. According to the World Bank, South Korea is leading the way currently, with 3.5% of its GDP going towards R&D. This has even outpaced Japan, which currently stands at 3.4%. Many predict that the region's two others fast growing economies, China and India, will make significant efforts to catch up.
Another element worth mentioning is the growing tourism sector in the Asia-Pacific region. According to the United Nations World Tourism Organization (UNWTO), tourism will grow by 6 percent each year over the next ten years. This can have various positive repercussions on the region, as it can drive various sectors of the economy when it grows. By 2023, 47 million jobs related to the tourism industry are expected to be added on the Asian continent. While the numbers look good, the various countries in the region will need to take on certain issues, such as making it easier for foreign visitors to obtain visa, branding their destinations accordingly and working on product differentiation.
Asian countries are now taking steps in the right direction to encourage growing travel in the region. Viet Nam, Laos, Cambodia, Myanmar and Thailand are discussing a proposal that may lead to the creation of a unified visa system that encompasses their countries, similar to the Schengen visa in Europe.
China is an interesting destination for many, mainly because the country can boast that it has 45 UNESCO World Heritage sites. But the issue is providing quality accommodation to tourists who visit these sites. Larger cities in the country may have many five star hotels, but in outlying areas that contain some of the country's most wonderful sights, finding quality accommodation can be a challenge for foreign visitors. This is why the Chinese are now working with international hotel chains to expand their presence and built properties deeper into the country.
While traditionally, Asia has relied on export-oriented manufacturing to fuel its industry, the continent's leading economies are now turning to their service sector to serve as an engine for economic development. Countries such as the Republic of Korea and Thailand, which were heavily dependent on manufacturing are now overcoming the challenges and making progress to improve their service sector. This is good news for foreign investors who might be looking to put their money into something else than manufacturing when they invest in the region.
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