March 2024 - In the midst of a global business context where sustainable outcomes are becoming an ever-important consideration, Munish Datta, Chair of CISL's Business & Sustainability Programme, discusses how Asia is becoming a driving global force in terms of opportunity, innovation, and resources.
As the world's largest and most diverse continent, the region represents not only an enormous consumer market but also a crucial supply chain, intellectual and technological hub. Asia's importance in shaping the future of sustainable business cannot be underestimated and, in this blog, I present six reasons why the region is fundamental to the journey towards a sustainable global economy and society.
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Biggest market for sustainable products and services
The Asian middle-class population is predicted to reach 3.5 billion people by 2030[1], six times the size of the forecasted middle-class population for the Americas, making it the world’s biggest market for consumer goods and services. Given this burgeoning growth, rising consumer awareness about sustainability, and rapid urbanisation, the potential demand for sustainable products and services aligned to sustainable practices is enormous. According to research by Bain & Co. in 2022[2], businesses that can service this market with sustainable goods and services are well-positioned to benefit.
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The globe's supply chain
Even in the context of global trade tensions, the importance of Asia for global supply chains cannot be overstated. Built upon manufacturing prowess, technological innovation, robust infrastructure, skilled labour force, as a major source of raw materials, components, and finished products, Asia enjoys a pivotal position in supporting global industries. Perhaps the most significant supply chain trend is the re-emergence of the ‘tiger economies’ under the free trade environment created amongst the countries that form the ASEAN Economic Community which is enabling companies to operate and grow across the region with confidence and ease.
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An abundance of (young) human resource
India and China have accounted for more than a third of the global population for over 70 years and when combined with the rest of the continent, Asia represents circa 60% of the world’s population[3]. With a media age of 31.9[4], Asian youth are driving innovation across many sectors, embracing technological advancements, and fuelling economic growth. Moreover, as agents of social change, they are actively engaging in addressing pressing issues such as climate change, social inequality, and education reform, thereby shaping a more sustainable and equitable future.
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An influential (business) diaspora
Asia has been a very successful exporter of human capital with members of its diaspora excelling and leading in many business sectors, civil society, academia, and politics. Their contributions are enhancing the human capital of their host countries, leading to advancements that drive economic and social progress. This is most evident in the US where ‘the most represented non-white American group at the CEO level was Asians/Indians, who comprised 45 percent of CEO positions at Fortune 500 and S&P 500 companies in 2022[5]. And this trend is accelerating. In fact, the 2020s have already seen almost as many Indian-origin CEO appointments in the US as did the entire 2010s. Asians living outside their countries of heritage are catalysing cultural exchange leading to the transfer of innovative ideas, technologies, and business practices that enrich economies, through collaboration and innovation.
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Renewably powered growth
India and, especially China, are demonstrating how Asian countries are meeting the demand for energy to meet challenges of rapid urbanization and industrialization, from clean and renewable energy sources. The continent is realising its immense potential for solar, wind, hydro, and other renewable energy resources with China on the brink of to achieving its ambitious 2030 targets for additional wind and solar power in 2025[6]. Asian countries are investing heavily in renewable energy infrastructure for the double benefits of securing energy supplies and reducing greenhouse gas emissions. Asian countries are also the source of many of the critical, rare-earth elements required in many net zero carbon technologies, without which global aims to decarbonise are impossible.
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A centre of excellence for Innovation and Technology
In addition to zero carbon tech, Asia is a hub of technological innovation across many sectors. From the rise of the metaverse, and generative AI, smart cities to fintech solutions, the region is at the forefront of tech powered advancement. India’s ‘unified payments interface’ allows free and fast account-to-account transfers using fintech apps, has already been adopted by 20% of its population and is a gamechanger in terms of cross border remittances[7]. Embracing Asian technology and innovation is creating more efficient supply chains, reducing waste, and enhancing resource management, all crucial elements of sustainable business practices.
With significant representation from Asia, the BRICS group of countries collectively account for higher GDP than the G7 group of countries, combined, further reinforcing the regions important to our transformation towards a more sustainable future. With its vast market potential, renewable energy resources, technological innovation, human capital and emphasis on collaboration, Asia and its influential diaspora presents a favourable arena for sustainable businesses, in and outside of the continent. By leveraging these opportunities, companies can not only contribute to environmental regeneration and enhanced social well-being but also secure growth and resilience in a fast-evolving business setting.
CISL’s global Business and Sustainability programme, being held in Asia, in October 2024, will equip leaders with the capability, confidence and connections to guide their organisations through this transformation in an increasingly Asian influenced, economic, technological, environmental, political, and social context.
Find out more the Global Leadership in an Age of Turbulence Summit.
