On the whole, despite unsettling events and political uncertainty in key markets, 70% of APAC executives view the global economy as either modestly improving or stable. This confidence in part may be due to APAC’s continued annual year-over-year GDP growth (4.3% in 2015 and 4.2% in 2016 — Oxford Economics), which consistently outperforms sluggish global economic growth estimates of 2.2%.
Optimism in local economies is more moderate and fragile than the global outlook. Bright spots are the fastest-growing economies of India and China, with estimated annual real GDP of 6.5% and 7.5%, respectively
The innovation upgrade
Most APAC executives see the top disruptors in their core business as product innovation and digitalisation. However, regulatory pressure is a growing challenge, adding an extra layer of complexity and slowing the pace of adoption. For regional powerhouse China, digital transformation and automation are not merely desirable but critical to the evolution of the manufacturing sector.
However, it is not only technology that is highly prized. 46% of APAC executives are looking to acquire talent with know-how in the form of experienced management or technology professionals to aid transformation.
A two-pronged approach to growth
Barring any systematic shocks, the Global Capital Confidence Barometer by EY showed a positive overall mid- to long-term outlook across the region if China realises its ambitious growth target and global trade and local geopolitical issues stabilise.
As a low-growth environment continues, many companies will likely follow a parallel approach to organic and inorganic growth. In both instances, APAC appears to be well-positioned to capitalise on the challenges and opportunities these two approaches offer.
Paul Arkwright
Publisher
