9.

It is projected that in 2020, GDP of Asia will overtake the GDP rest of the
world. This region will also be home to 90% of new middle-class members
entering the global economy. In this Asian era, what should Indian firms do to be
extremely agile to make the most of this opportunity?

In 2020 Asia’s GDP will overtake the GDP of the rest of the world combined. By
2030, the region is predicted to contribute roughly 60% of worldwide growth. Asia-
Pacific also will be liable for the overwhelming majority (90%) of the two .4 billion
new members of the middle class entering the global economy.
The bulk of that growth will come from the developing markets of China, India and
throughout South-East Asia and it'll give rise to a number of latest decisions for
businesses, governments, and NGOs.

The companies should focus on understanding changing market dynamics:

New Consumer Profile: Consumers will have more power and simultaneously
demand both premium and value-for-money goods and services.
 Focus on personalized, localized, healthy, and sustainable consumption.
 Shopping pattern Omnichannel with convenience
 Consumer influence by social communities

The New Focus on Sustainability: Sustainability and its environmental, social and
economic impact will also continue to rise on the agendas of governments and NGOs
in the region. The business will continue to expand to cover topics from health and
wellness to diversity and equality opportunities.

Opportunities for India in the Asian Century

India offers three major ingredients to the broader Asian economy: services, which
account for 53% of India’s GDP; a young labour force and new markets for the rest of
the region.
Through adding the Asia focus, India could expect to target some opportunities:
Focus on R&D and more knowledge-intensive manufacturing: there is room for
India to seize the baton and become a larger sourcing base for global supply chains.
(Ex. Just the worldwide sourcing value of mobile handsets is over $500 billion in
scale, and India could aspire for a 15-20% share of this footprint.)
But to fully realize this opportunity, particularly in terms of improving infrastructure.
Investments are needed to enhance the logistical backbone supporting manufacturing,
incentives are needed to encourage future investments in R&D, and large-scale
innovation hubs need to be developed to move manufacturing to subsequent phase
and help to capture the demand opportunity.

Innovation; East Asia has emerged as a leading hub, rivaling the leading innovation
hubs globally. The market opportunity for Indian businesses starting from IT services,
tourism services, generic pharmaceuticals, automotive components, agrochemicals,
then forth. India could look too many of the opportunities arising out of the region’s
rapid integration and shifting networks and flows to help drive its next chapter of
growth.

The following megatrends that can bring new businesses opportunity.

 Premiumization of product/ services: Affordable options will continue to be

important. Consumers are going to be upgrading to premium offerings and
including new variants in existing routines, like adding organic food items and
a new skincare regime or adopting app-based ride-sharing. Premiumization
and category addition will drive a big share of incremental spend on eating,
looking good and staying connected (data packs and gadgets).

 Aspirations are fast converging across urban and rural areas: The internet
and smartphones have significantly bridged the information divide between
consumers in urban and rural India. Future efforts to enhance physical and
digital connectivity, and therefore the use of innovative distribution channels,
will enhance well-being and unlock the true consumption potential of rural
India.
 Millennial and Generation Z preferences will significantly shape the
market: Businesses will have richer, more willing buyers, but these buyers
will be highly informed and make very specific choices for themselves and
their families.
 Digitally influenced consumption will become the norm: Connectedness
will drive a significant difference in preferences, even at the same income
level. As many as 50-70% of the foremost digitally connected consumers
today, across income levels, already use digital platforms for product
discovery and pre-purchase research.
 India’s eternal hunt for value will aid the growth of e-commerce, ‘value
for money’ brands and category extensions: Asset-light e-commerce
models, supported by offline partnerships and demand-aggregators, will help
brands test out and reach these new markets in a cost-efficient manner.
Businesses also will have a chance to unlock spend on new category
extensions.
 Technology-enabled new business models: technology will leverage
inherent comfort with ‘users’ and the desire for increased convenience and
well-being. Digital platforms for renting and Subscription models will serve
the value-conscious consumer to access new brands and products.
 Firms will thrive for continuous innovation: Companies will go a step
beyond replicating Western models at low costs; they will localize and
personalize business models and product/service offerings according to the
unique preferences and constraints of their target consumer.
 References
 https://theprint.in/economy/asia-will-have-worlds-largest-gdp-in-2020-
china-and-india-to-contribute-the-most/341557/
 https://www.livemint.com/news/india/asia-on-track-to-top-50-of-
world-gdp-by-2040-report-1563161599794.html
 https://www.weforum.org/agenda/2019/07/the-dawn-of-the-asian-
century/

10. This year’s theme for 50th Annual meeting of World Economic Forum is
“Stakeholders for a Cohesive and Sustainable World”. What role can
governments play for sustainable trade policies?

The theme “Stakeholders for a Cohesive and Sustainable World,” nearly 3,000
participants from governments, businesses and civil society met in Davos-Klosters,
Switzerland, from 21-24 January 2020 to require tangible actions to deal with the
world’s most pressing environmental, social and governance issues.

Governments play a key role at all levels of government and legislative bodies in
promoting sustainable trade policies. Trade rules must allow national governments the
flexibility to adequately protect the environment. This need is all the more important
in light of the movement of trade rules “behind the border,” expanding from
governing tariff levels to governing how states regulate in areas like services,
investment, intellectual property rights, government procurement, subsidies and other
important elements of the domestic regulatory regime.
Beyond simply removing barriers to environmental protection, the govt. can make
trade law and policy which may also play a crucial role in actively supporting
environmental policies.
The Programmed for the Annual Meeting is prioritized six key areas:

 Society – Equality, Inclusion and Human Potential

 Economy – Economic Development and Integration
 Ecology – Climate, Environmental Security and Sustainable Food Systems
 Technology – Technology Governance
 Geopolitics – Regional Development and Cohesion
 Industry – Industry Responsibility and corporate Leadership

Key recommendations for government policy

 Make the formation of entrepreneurial activity a government priority – The

formulation of effective policy for entrepreneurial ecosystems requires the
active involvement of government Ministers working with senior public
 servants who act as ‘institutional entrepreneurs’ to shape and empower
policies and programs.

 Make sure that government policy is broadly focused – Policy should be

developed that's holistic and encompasses all components of the ecosystem
instead of seeking to ‘cherry-pick’ areas of interest.

 Allow for natural growth, not top-down solutions – Build from existing
industries that have formed naturally within the region or country instead of
seeking to generate new industries from Greenfield sites.

 Ensure all industry sectors are considered not just high-tech – Encourage
growth across all industry sectors including low, mid and high-tech firms.

 Provide leadership but delegate responsibility and ownership – Adopt a ‘top-

down’ and ‘bottom-up’ approach devolving responsibility to local and
regional authorities.

 Develop a policy that addresses the requirements of both the business and its
management team – Recognizes that small business policy is ‘transactional’
while entrepreneurship policy is ‘relational’ in nature.

References

https://www.weforum.org/press/2019/10/world-economic-forum-50th-
annual-meeting-in-davos-defining-stakeholder-capitalism/
https://www.weforum.org/press/2020/01/stakeholder-capitalism-a-
manifesto-for-a-cohesive-and-sustainable-world/
https://www.weforum.org/agenda/2020/01/davos-2020-who-is-coming-and-
everything-you-need-to-know/