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Asian Emerging Markets and Development
Peter EnderwickProfessor of International BusinessAuckland University of TechnologyNew Zealand
Visiting Professor CIBUL, University of Leeds
Introduction
• Focus – Asia, but particular focus on the large emerging markets (LEMs) of China and India.
Importance of Asia
• As well as its numerical importance (population, GDP, trade etc) Asia has been one of the most exciting regions for the past 60 years.
• Only region to see consistent and broad based economic development i.e. Japan, NIEs, ASEAN, China and India.
Structure
– Rise of LEMs– Evolution of Research on LEMs– Areas of Research– Management Issues– Asia and IB– Asia in the Longer Term
Rise of Asia and LEMs
• The economic rise of Asia and in particular China and India, has fundamentally affected many aspects of world economic and business activity:– GDP– Trade– Labour markets/job security/income– Foreign reserves– Migration– Resources and commodity prices
Importance of LEMs
• From an IB perspective, LEMs are important in an number of ways:– As markets – more than 2 billion consumers– As lower cost production sites– As learning opportunities
Competition Forms and extent
New business models -Music-Online gaming- Adaptation of models e.g-Dell-Tata and the Nano
Importance of LEMs
• The breadth of these impacts and the multiple benefits offered by LEMs make them amenable to the multidisciplinary and holistic approaches favoured by IB,
• i.e. more than international marketing, production or strategic management.
Evolution of Research on LEMs
• Size/scale/growth/broad implications• Internal focus – markets/sourcing/business
systems/FDI• Regional/global impacts• Outward FDI/competitiveness of LEMs• Upgrading of LEM competitiveness and
accommodation of advanced economies• Emulation of growth model/management• Catch-up versus industry leadership
Focus of Research
• The challenge of LEMs (infrastructure, inequality, inflation, democracy etc);
• Risks in LEMs (informational, volatility, nationalism etc);
• Global bads – SARs, Bird flu etc;
Focus of Research
• China and India and their interaction with globalisation (eg global institutions, trade relations, trade patterns with high energy costs);
• Global protectionism issues;
• Integration of LEMs into business strategy e.g. capture of raw materials+ manufacturing;
Focus of Research
• Changing nature of strategy within LEMs e.g. Eli Lilly and Chinese hospitals, Renault/Nissan and electric cars;
• Impacts on aspects of the world economy e.g. resources, financial flows;
• Impacts of China and India on Asian regional economy;
Focus of Research
• Impacts of China and India on least developed economies;
• Growth of FTAs;
• Labour market impacts e.g. skill differentials, labour/capital share
Focus of Research
• China and India – complements competitors, convergence?
Management Issues
• Political economy of the rise of LEMs –– Accommodation re USA– Complementarities vs competitiveness– Backlashes – nationalism, currency, global
protectionism, offshore sourcing;
• Innovation and competitive upgrading;
India – Offshore sourcingChina – IFDI and spilloversRole of foreign firms
Management Issues
• Management of global supply chains – quality/cost/ethics;
• CSAs/FSAs of LEM firms and capture of CSAs;
• Learning from LEM firms – management of government relations, networks, innovation for the bottom of the pyramid.
Asia and the Sustainability of IB
• China and India, like Japan, provide new stimulus to IB:– New, complex issues– Cross-discipline nature of these issues– Makes infusion more difficult– Encourages problem-oriented approaches– Encourages embeddedness (centres, cross-
disciplinary programmes, committed Deans)
Asia and the Sustainability of IB
– Amenable to external funding– Strengthens non-US perspectives on IB
LEMs makeinfusion moredifficult
LEMs offernew issues
Asia in the Longer Term
• Key issue of sustaining success beyond catch-up
• Will China and India turn out to be another Japan?– Size, openness and integration– Competitive relations between China and
India drive them– Massive resources– Drivers of regional integration