As the global economic axis tilts towards Asia, European businesses are at risk of being left behind, a report released yesterday by HSBC bank said.
The model where the West did the development work and the East took care of production with cheap labor is dead, it said, adding that innovation will increasingly originate from the East.
“Unless European business confronts the implications of the rebalancing of economic power and the growth of Asia, business opportunities will be lost and business threats will increase,” it said.
The Looking East: The changing face of world business report investigates the challenges and opportunities of the rise of Asia for European businesses and identifies current and future trends.
It warns that European companies are at risk of not engaging with the new economic world order.
“We are no longer looking at when West meets East, but at how the East will redefine the West and the way we do business,” said Alan Keir, HSBC’s group general manager and global co-head of Commercial Banking. “It’s crucial that European businesses are not only appreciative of this fundamental and fast-paced change, but that they are able to respond swiftly and effectively. Our competitiveness as a region is at risk.”
Firms must look at how they can capitalize on Asia’s diverse consumer base, skilled workforce and advances in research and development, while mitigating the risks posed by the macro-economic climate.
Booming Eastern populations and consumer wealth will create unprecedented market opportunities for European businesses, the report said.
However, “the free market, liberal principles on which the West was built are often in direct contrast to methods of rule in the East,” it said.
“European businesses need to be aware that the competitive playing field is not necessarily level,” the report said.
In the Asian workforce, the result partly of huge investment in education means the paradigm where the West did the design and development work and the East took care of production and manufacturing is anachronistic.
Lines have been blurred. China and India are now world leaders in the knowledge economy.
“They’re beating the US, Europe and Japan at their own game,” the report said.
Joe Ballantyne of The Futures Co, which carried out the research for HSBC, said innovation will need to become more global in focus and new strategies across different markets will need to be adopted.
Greater investment in renewable technologies will also be necessary as the world’s conventional energy supplies become stretched, he said.
“The story of globalization and the integration of the world economy isn’t turning out the way many people expected,” Ballantyne said.
“In future, successful businesses will need to understand how the dynamics of cultural change play out across different markets, how the geopolitical landscape is changing and even how different models of capitalism are evolving in different parts of the world,” he said.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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