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Event Detail
| Date | Monday 26 March 2007 |
| From till | |
| Event Type | Talk & forum discussion |
| Organised by | |
| Topic | Asia's role in the world economy |
| Location | INSEAD |
| Invite | Official Invitation |
| Description | Asia's role in the world economy By Prof. Hellmut Schütte at INSEAD On Monday 26th of March 2007, Prof Hellmut Schütte introduced Asia's role in the world economy to a group of about 30 interested BLBG members and other business professionals. Main takeaways are: Schütte pointed at Asia's terrific growth rate versus the world's growth rate, and the main drivers of growth: workforce input, investments and total productivity growth. Keeping those drivers in mind, Asia has a great future in view, besides some development issues coming along such as growing inequalities and unemployment, shortage of energy, growing environmental concerns. Although Asia stands for 25% of the world economy, only a minor share of the MNC's are able to catch an equal share of the business in Asia. This shows that Asia's importance for quite some MNC's never got high priority. The question: "how good or bad Asia's growth is for the rest of the world" is leaves interesting answers. The lucky countries are still those with raw materials. Less developed countries have a mixed fortune in front of them; they might end up in competitive situations (ex: Bangladesh, Mexico, South Africa with textile, clothing, electronic industries) or in complementary situations (ex: South Korea Czech republic with intermediate, machinery, service (IT) industries). Asia's growth is good news for the rest of the world, as services are in higher demand, there is more outbound tourism from Asia and second sourcing is possible; it is bad news as in Asia there is an unlimited supply of (cheap) labour, the skill level is upgrading quickly, high economies of scale and the infrastructure is adapted. Labour intensive and low skill jobs have been moving for years to less developing countries together with the export of higher value goods as machinery to those countries. Furthermore the rest of the world has been benefiting from import of low priced goods. Production environments are more and more becoming the management of supply chains across borders. The most important outcome is that developed countries are diminishing competitive advantage in high value goods and that there is a higher pressure on jobs/wages in developing countries. Finally growth figures of China and India of 4% and 2% from 2004 to 28% and 17% in 2050, over passing Europe and slightly higher than US projected figures, left some thoughts behind. However the difference in the standard of living of China and India compared to other Europe is still far apart. The sustainability of the growth in Asia will get some impacts along the way due to further commodity price developments, oil price and other possible external factors (out break of bird flu). Asia's growth is a win-win situation for the rest of the world, but will require more adaptation efforts from the developed countries as Europe to adapt to the new era of globalization. Besides economical gain, Asia is furthermore gaining more military and culture impact, but will also get more social questions: there is more to life than economics. |
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