navigating growth in uncertain times (with singapore highlights) · 2016-11-17 · 2 pwc’ 2016 pe...

PwC’s 2016 APEC CEO Survey: ASEAN ReportNavigating growth in uncertain times (with Singapore highlights)

A supplement to PwC’s APEC CEO Survey

2 PwC’s 2016 APEC CEO Survey

Our survey results suggest that ASEAN* business leaders are optimistic about the future: the region has a young population, a rapidly growing consumer class and an attractive outlook for economic growth. As a result, its business leaders are almost twice as likely as their APEC peers to express high confidence in revenue growth in the coming year.

Taken as a whole, ASEAN is the world’s seventh largest economy and its fourth largest exporting bloc. Its importance on the global stage will continue to expand, led by growth in emerging economies such as Indonesia, the Philippines, Malaysia, Viet Nam and the opening-up of Myanmar.

ASEAN is not a single bloc such as North America, Europe, China or Japan, however, and the region remains a diverse collection of economies with low intra-regional trade.

Our survey reflects that ASEAN business leaders are calling for the easing of regulatory and other barriers to conduct cross-border trade within the region, and they are

* Thisreportreflectsthesurveyresultsgatheredacrosssevenofthe10ASEANeconomieswhicharepartoftheAPEC**economicforum:BruneiDarussalam,Indonesia, Malaysia,thePhilippines,Singapore,Thailand,andVietNam.

**TheAsia-PacificEconomicCooperation(APEC)isaregionaleconomicforumestablishedin1989toleveragethegrowinginterdependenceoftheAsia-Pacific

showing a desire to look beyond their home markets for long term growth – particularly China.

This report explores what is on the minds of 316 business leaders surveyed across ASEAN in six key areas:• Outlook for business growth• Building regional strength• Strategies for growth in China• Roll out plans for connected devices• Influence of regulatory conditions in cross-border

investment• Momentum on free trade

It also provides additional highlights on the views of 57 business leaders based in Singapore, as the country’s economic conditions and outlook are considerably different from that of its ASEAN counterparts.

This year, over half of all respondents in ASEAN are from organisations with over US$500mn in annual revenue.

PwC’s APEC CEO Survey 2016-17: ASEAN ReportNavigating growth in uncertain times (with Singapore highlights)

3ASEAN – Singapore

TheChinesebanksthemselveshavebecomeveryaggressiveandverywellrepresentedinAsiaPacificcountriesoutsideofChina.SotheyhavebecomeaverymajorcompetitorofthereducedgrowthforbankingservicesinAsiaPacific.Thepiehasnotgrownthatmuch,butthecompetitorsgoingforthispiehaveincreasedsignificantly,thatisanotherchallengethatweface.

– Samuel Tsien, GroupCEO,OCBCBank

Growth from withinOutlookforbusinessgrowth

Despite global economic headwinds, majority of ASEAN business leaders remain open to doing business as they look to their domestic markets for higher growth and returns in the year to come.

When asked about revenue growth prospects in the coming 12 months, ASEAN business leaders emerged nearly twice as confident as their APEC counterparts (Figure 1), with 40% from ASEAN cited ‘very confident’ compared to 23% from the rest of APEC. Furthermore, 29% of ASEAN business leaders have more confidence when it comes to increasing their domestic operations’ profit margins compared to a year ago, a 13 percentage point difference from 2015, while 14% said the same about their international operations (Figure 2). At the same time, business leaders are also finding it increasingly challenging to realise the desired return of investments (ROI) in Asia Pacific, with 27% who said that they feel less confident in this respect compared to 2015.

The bright spot in ASEAN lies in its expanding market size coupled with a number of favourable factors such as positive GDP growth outlook as well as wage and tax

Figure 1. Confidence in revenue growth over the next 12 months

2012 2013 2014 2015 2016

Not very confident

Very confident

36%

43%46%

28% 28%

27%

19%8%

12%15%

48%

40%

9%

1%

ASEAN The rest of APEC*All of APEC

2016 2016

50%

23%22%

4%

somewhat confident

veryconfident

not very confident

not at allconfident

somewhat confident

veryconfidentnot very confident

not at allconfident

competitiveness (Figure 3). Currently at 620 million people and growing, continued opportunities for market penetration in the region are sustained by the growing aspirations, disposable income as well as purchasing power of its rising middle class.

While this trend is expected to drive up the inflow of FDI into some of the region’s fastest growing and most dynamic economies such as Viet Nam, Indonesia and the Philippines, ASEAN business leaders are also gearing up for strong foreign competition entering their home region, particularly from China.

Q: How confident are you about your organisation’s prospects for revenue growth in your principal APEC economy over the next 12 months?Base: 2016: 1,154, 316 (ASEAN), 838 (the rest of APEC), 2015: 800, 2014: 635, 2013: 467, 2012: 362

Source: PwC’s APEC CEO Survey, 2016-17

* ReferstothesurveyresultsgatheredfromallotherAPECeconomiesexcludingthoseintheASEANregion


Figure 2: What’s changed for business leaders in ASEAN economies?

Confidence impediments – Where more CEOs see challenges

CEOs ‘more confident’ about these, compared to last year

Increasing profit margins on domestic operations

Increasing profit margins from international operations

Forcasting compliance cost and tax liabilities

2015, 16%

2016, 29%

2016, 14%2015, 11%

2016, 16%2015, 11%

Securing the talent/skills needed to perform

Realising the desired ROI in Asia Pacific

Launching a new product/service or entering a new line of business

2015, 18%

2016, 23%

2016, 27%2015, 23%

2016, 20%2015, 16%

Note:Respondentswhoanswered‘moreconfident’ Note: Respondents who answered ‘less confident’

Figure 3: Doing business in Southeast Asia – Market attractiveness and accessibility heat map

Attractiveness Accessibility

Forecasted Young Ease of doing Wage Corporate tax GDP Population GDP growth population business competitiveness competitiveness

Current US$, Size Constant GDP/capita, % share of total World bank ranking, Min. Wage/month US$, Corporate tax rate %, 2016 2016 %p.a., 2016 -2020 15-40 years, 2015 2016 2015 2015

Europe(WE & EE)

North America

Japan

China

South America

Southeast Asia

India

Africa

Middle East

Index

High competitiveness Lower competitiveness

Note: * Whilst not yet the largest, SE Asia has a population of a similar size to Europe, twice that of the US and a GDP larger than India. It has a high forecast growth rate, just behind that of China and India

Source:IMFWEO2016,USCensusbureau,PassportEuromonitor,PwCAnalysis

Q: Compared to a year ago, how has your confidence changed about the following?Base: 2016: 316, 2015: 262Source: PwC’s APEC CEO Survey, 2016-17


Singapore highlights Copingwith knock-oneffectsfromtheglobaleconomicslowdown

• Due to its strong orientation on international trade, Singapore’s economic environment is exposed to global headwinds such as lacklustre growth, lower commodity prices and currency volatility

• Furthermore, its relatively small market size – less than six million people – gives local, small medium enterprises (SMEs) little room to expand domestically

• Last year, the city state saw GDP growth drop to the lowest in five years and it is not expected to pick up significantly in the immediate to near term future

• Amidst the dim outlook, only 7% of Singapore’s business leaders are ‘very confident’ about their revenue growth over the next 12 months – compared to the ASEAN average of 40% – while 32% responded ‘not very confident’ and ‘not at all confident’ – compared to the ASEAN average of 10% (Figure A)

• On a positive note, majority (60%) informed that they are ‘somewhat confident’ in the year to come; coupled with the Monetary Authority of Singapore (MAS) holding off on easing measures despite receding growth, this may be indicative of the robustness of the Singapore market

Figure A: Confidence in revenue growth over the next 12 months

Q: How confident are you about your organisation’s prospects for revenue growth in your principal APEC economy over the next 12 months?

Base: 57 (Singapore), 316 (ASEAN)Source: PwC’s APEC CEO Survey, 2016-17

Singapore

60%

25%

7%

2016

somewhat confident

not very confident

veryconfident

not at allconfident

ASEAN

48%

40%

9%

1%

2016

somewhat confident

veryconfident

not very confident

not at allconfident


Stronger cross-border investment sentiments Buildingregionalstrength

The lack of certainty in realising growth and returns from overseas markets has hardly deterred ASEAN business leaders from making cross-border investments. On the contrary, this year’s survey results saw the number of ASEAN business leaders planning to increase global investments grow from 58% last year to 66% – 18 percentage points higher than the rest of APEC (Figure 4). Among those who have plans to increase investments, on average, they are allocating 70% of the increase to APEC economies.

While their APEC counterparts are showing signs of reduced cross-border investments, stronger investment sentiment among ASEAN business leaders may help

1. Globalentertainmentandmediaoutlook2016-2020,PwC,2016

2016

2015

2016

2015

3 5 25 66

6 5 31 58

3 12 36 48

2 10 37 51

Source:2016PWC’sAPECCEOSurveyRest of APEC

ASEAN Increase Stay the same Decrease Don’t know

Figure 5: Top three spending priorities in foreign APEC markets over the next 12 months

New product or service development

ASEAN The rest of APEC

Information Technology Advertising, marketing & sales promotion

53%

52%

49%

63%

45%

54%

Figure 4: Cross-border investment plans over the next 12 months (%)

narrow the gap between them and their larger global competitors. The results are also indicative of the long term imperative for ASEAN business leaders to do business beyond their borders due to the smaller, individual market size of their home economy. Furthermore, it suggests their forward looking approach to seize opportunities in markets where penetration prospects prevail, particularly in the neighbouring ASEAN and Asia Pacific economies, as well as in the e-commerce sector and the digital economy.

With nearly 60% of the world’s population and a growing consumer base, Asia Pacific is expected to see its smartphone penetration rate grow from 43% in 2015 to 66% by 2020, which is indicative of future business prospects in the region’s digital economy1. Consistent with this trend, more than half of ASEAN business leaders ranked investments in information technology (63%) as well as in advertising, marketing and sales promotion (54%) their top spending priorities in foreign APEC markets over the next 12 months (Figure 5).

Q: Thinking of your business investments globally, will your investments increase, stay the same or decrease in the next 12 months?Base: 2016: 316 (ASEAN), 383 (the rest of APEC), 2015: 260 (ASEAN), 535 (the rest of APEC)Source: PwC’s APEC CEO Survey, 2016-17

Q: Thinking of your investments in APEC economies, where do you expect to increase spending during the next 12 months?Base: 173 (ASEAN), 333 (the rest of APEC)Source: PwC’s APEC CEO Survey, 2016-17


Singapore highlights Decreaseincross-borderinvestments

• In view of Singapore’s sluggish economic outlook, this year’s survey results show that its business leaders will be more stringent and vigilant with their cross-border investments in the year to come

• 47% plan to increase cross-border investments over the next 12 months, a 22 percentage point shift from 2015, while 12% intend to decrease them (Figure B)

• Among the foreign economies where Singapore business leaders foresee more promising returns are China and Indonesia; on average, they plan to increase their investments in these markets by at least 20%

Figure B: Cross-border investment plans over the next 12 months (%)

2016

2015

5 12 35 47

2 29 69

Your selection Increase Stay the same Decrease Don’t know

Q: Thinking of your business investments globally, will your investments increase, stay the same or decrease in the next 12 months?Base: 57 (2016), 22 (2015)Source: PwC’s APEC CEO Survey, 2016-17


2. GlobalEconomicProspects,TheWorldBank,June20163. 3greatforceschangingChina’sconsumermarket,WorldEconomicForum,January2016

Navigating local markets with local partnersStrategiesforgrowthinChina

Around seven in 10 ASEAN business leaders expect China’s economy to achieve less than 6% growth over the next three years; a decline from previous years’ growth of over 7%, but remains higher than the global growth forecast of c. 3% as projected by the World Bank2. In the meantime, China’s consumer economy is projected to expand by about half, to $6.5 trillion by 20203.

For both ASEAN and APEC business leaders who plan to

31% 45%

27% 44%

0 10 20 30 40 50

Increase collaboration with partners in China

Focus on building brand in China

Develop new products and services for existing markets in China

Expand geographically within China

Develop products and services for different end markets in China

34% 44%

50% 48%

24% 36%


Figure 6: Top five strategies to deal with China’s economic transition

continue and/or boost their investments in China, around half (50% in ASEAN, and 48% in the rest of APEC) indicated that they would be increasing collaboration with local partners over the next three years. This is reflective of strategies to tap on the experience and capabilities of local businesses to access and navigate China’s expanding and unique consumer market (Figure 6).

When compared to their APEC counterparts, ASEAN business leaders appear to have less appetite for building their brand, developing products and services, as well as expanding their business in China. This may suggest lower enthusiasm towards the China market in the short term as prospects in ASEAN seem stronger and stand to offer more promising returns.

Q: Considering your outlook for your organisation in the People’s Republic of China, which of the following strategies, if any, do you plan to undertake over the next three years?

Base: 113 (ASEAN), 517 (the rest of APEC)Source: PwC’s APEC CEO Survey, 2016-17


Singapore highlights LookingoutwardtoChinaforgrowth

• Singapore’s business leaders are aligned with their ASEAN peers in anticipating the changes or shifts in China’s economy; 65% expect China’s economy to achieve less than 6% growth over the next three years

• Similarly, among those who plan to do business in China, 51% intend to increase collaboration with local partners

• Due to Singapore’s relatively smaller domestic market size, business leaders looking to China for growth appear more enthusiastic than their ASEAN peers in building their brand in the country; 40% informed that brand-building will be part of their growth strategy in China over the next three years, followed by developing products and services for different end markets there (34%, Figure C)

Figure C: Top five strategies to deal with China’s economic transition

Increase collaboration with partners in China

Focus on building brand in China

Develop products and services for different end markets in China

Develop new products and services for existing markets in China

Expand geographically within China

51%

40%

34%

31%

31%

Q: Considering your outlook for your organisation in the People’s Republic of China, which of the following strategies, if any, do you plan to undertake over the next three years?

Base: 35Source: PwC’s APEC CEO Survey, 2016-17


4. Smarter,MoreConnectedASEAN,ChannelNewsAsia,11October2016

Connected devices taking shape in operationsRolloutplansforconnecteddevices

The Internet of Things (IOT) is setting a course for new services, consumer experience and demands, market access opportunities as well as ways of doing business. By 2020, an estimate of 8.6 billion things will be connected online in ASEAN, which translates to approximately two electronic devices per person4. Organisations will need to be digitally enabled, connected and savvy, to be well equipped to meet future demands and stay ahead of the curve.

Around eight in 10 organisations in ASEAN have invested in some kind of connected devices as part of digitising their business operations. The top three areas where real time or near-real time data information collection has been embedded into are mobile devices used by employees (indicated by 54% of ASEAN business leaders), equipment in office locations (44%), as well as transport and logistics (38%, Figure 7).

Ourpriorityatthemomentistobuildourcapabilityinthreemajorareas.Oneistobuildcapabilitywithextremedigitisationprocess,whichmeansthatweneedtobeabletoworkveryquicklytoreengineerprocessanddigitisetheprocesslinkingtothenewchannel.Secondareawhichisthemostchallengingonewillbetobuilddataanalyticscapability.Thirdareawillbethechallengesinbuildingthenewchannel.

– Vorapak Tanyawong,President,KrungThaiBankPublicCompanyLimited

Recognising the need to level-up operational efficiencies in the near term, efforts in data collection will continue to be centred on the three aforementioned areas of operations over the next three years. Corresponding to ASEAN’s consumer market growth, the take-up rate of consumer data-centred devices is also expected to increase in the future. In the meantime, there is no significant evidence indicating clear success in realising the benefits of data collection, such as helping business leaders save cost and increase profit (Figure 8).

Figure 7: Data collection, current state and progress in the next three years according to ASEAN CEOs Current adoption Future adoption (In the next 3 years)

Mobile devices used

by employees

Registers, POS, equipment that

track transactions

Transport and logistics

Equipment in office locations

Machinery in factories

Mobile devices used

by employees

Devices that track consumer preferences,

shipping, geolocation

Equipment in office locations

Transport and logistics

Registers, POS, equipment that

track transactions

54%

44%

38%

31%

25%

46%

43%

41%

36%

33%

Q: In what parts of your operation have you embedded real time or near-real time data and information collection (e.g., Internet of Things)?Base: 293 (current adoption), 292 (future adoption)Source: PwC’s APEC CEO Survey, 2016-17


Figure 8: Top five benefits of data collection according to ASEAN business leaders


0 10 20 30 40 50 60 70

Operational efficiencies or cost reduction

Customer experience and relationship

Supply chain responsiveness

Employee performance

Risk mitigation

58% 63%

57% 52%

43% 41%

40% 40%

43%38%

Q: Thinking about new places for data collection, in which of the following areas do you expect to see the greatest benefit to your business over the next three years?


Singapore highlights Targetingprofitandassetoptimisation,andgeneratingnewrevenue

• While their ASEAN peers place more emphasis on the benefits of improving supply chain responsiveness and employee performance (Figure 8), Singapore’s business leaders are investing in data collection capabilities with the aim to drive asset optimisation and generate new revenue streams (Figure D)

• Among the key operations where Singapore’s businesses have embedded data collection into are store front devices that track payment and transactions (indicated by 37% of Singapore’s respondents), mobile devices used by employees (35%), as well as equipment in offices (29%)

• Over the next three years, business leaders plan to increase take-up on connected devices that track consumer preferences (31%), as well as devices used in or on products (24%), and on transport and logistics (24%)

Figure D: Top five benefits of data collection according to Singapore’s business leaders

Operational efficiencies or cost reduction

Customer experience and relationship

Asset optimisation

New revenue from services

Risk mitigation

59%

55%

45%

41%

45%

Q: Thinking about new places for data collection, in which of the following areas do you expect to see the greatest benefit to your business over the next three years

Base: 49Source: PwC’s APEC CEO Survey, 2016-17


To invest or not to invest? Influenceofregulatoryconditionson cross-borderinvestment

When asked about what matters most in their business decisions to invest in a foreign APEC economy, regulatory

#1#2#3#4#5

ASEAN Index scores The Rest of the APEC CEO

Regulatory environment (transparent rules, lack of corruption)

52% Expanding domestic market43%

A skilled talent pool41% Favorable tax environment41% Legal environment (land rights and contracts protection)37%


55% Expanding domestic market47%

A skilled talent pool44%

Favorable tax environment

43% Legal environment (land rights and contracts protection)

40%

Figure 9: Top 5 areas of consideration in cross-border investment decision making

environment emerged as a key decision influencer for more than half of the business leaders surveyed (Figure 9). Parallel to ASEAN’s move towards becoming a more economically integrated bloc, more of its business leaders (71%) than their APEC counterparts (54%) expect the regulatory environment to have a greater influence on their cross-border investment decisions over the next three to five years (Figure 10).

Figure 10: Business leaders who expect regulatory environment to have greater influence on investment decisions in 3-5 years

More influence

71% 54%

Rest of APECASEAN

Note:Respondentswhoanswered‘moreinfluence’

Q: What matters most in your business decisions to invest in APEC economies outside of your principal APEC economy?Base: 291 (ASEAN), 761 (the rest of APEC)Source: PwC’s APEC CEO Survey, 2016-17

Q: What influence do you expect (transparent rules, lack of corruption) to have on your investment decision making in APEC economies over the next 3-5 years compared to now?



Additionally, nearly half of ASEAN business leaders believe that the harmonisation of data privacy and security regulations across APEC is of critical importance to their business as digital technologies revolutionise the way information is exchanged and stored (Figure 11). They are also twice as highly likely as their APEC counterparts to increase cross-border investments if the regulations are harmonised (Figure 12). Overall, the responses from business leaders suggest that cross-border business investment will increasingly flow to economies with the right regulatory conditions for business expansion.

I thinkwhatwearemonitoring closely ishowcan[regulators] cope with new additional banking,newFintech, new technological change that is stillaquestionmark,howfasttheycanadaptandwhatwillbe theactual result.ForThailand for instanceI think[regulatorsare]quiteopen, this is coming,they’re receptive but I think they’re still strugglingtofindtherightbalance,howopenshouldtheybeandthetimingbecausebankingismaybedifferentfromother industries, it’s related very closelywithnationalsecurity.

– Vorapak Tanyawong,President,KrungThaiBankPublicCompanyLimited

Figure 11: Importance of harmonised data security and privacy regulations across APEC for business growth

29%48%


Note: Respondents who answered critically important

Figure 12: Significance of harmonised data security and privacy regulations to investment decisions

20%41% Note: Respondents who answered

‘highly likely to invest more’


Q: How important to your business growth is coordination among regulators in APEC economies towards a goal of uniform data privacy and security rules and standards in the region?


Q: How likely or unlikely would your organisation to invest more in the APEC region if regulations or standards for data security and privacy were harmonised across the region?



Singapore highlights Regulatoryenvironmentkeyfactorinshapinginvestmentdecisions

• 57% of Singapore’s business leader consider regulatory environment a major factor in shaping their cross-border investment decisions, which is consistent with the ASEAN average at 55% (Figure E)

• Additionally, 66% believe that its influence on their decision making will further increase in the next three to five years

• To a lesser extent than their ASEAN peers, 35% of Singapore’s business leaders find that the harmonisation of data privacy and security

regulations across APEC is critically important to their business growth, which is below the ASEAN average of 48% (Figure F)

• Meanwhile, 33% of business leaders in Singapore – lesser than the ASEAN average of 41% – are highly likely to increase investments if such harmonisation was achieved

• The findings suggest that businesses in Singapore are less reliant on the standardisation of regulations at the regional level to address data related risks; this may be in part due to the country’s pre-existing Personal Data Protection Act (PDPA), which has established clear and stringent guidelines governing the collection, use, disclosure and care of personal data

Figure F: Significance of harmonised data security and privacy regulations across APEC for business growth

Highly likely to invest more if policy regulations are harmonised

Figure E: Top 5 areas of consideration in cross-border investment decision making

57%

54%

52%

43%


Expanding domestic market

A skilled talent pool

Legal environment (land rights and contracts protection)

Favorable tax environment 39%

Q: What matters most in your business decisions to invest in APEC economies outside of your principal APEC economy?Base: 54Source: PwC’s APEC CEO Survey, 2016-17

Q1: How important to your business growth is coordination among regulators in APEC economies towards a goal of uniform data privacy and security rules and standards in the region?

Q2: How likely or unlikely would your organisation to invest more in the APEC region if regulations or standards for data security and privacy were harmonised across the region?Base: Q1: 51(Singapore), 293 (ASEAN), Q2: 51(Singapore), 292 (ASEAN)Source: PwC’s APEC CEO Survey, 2016-17

Critical importance to business growth

35% 48% 33% 41%

ASEAN

Singapore


A work in progressMomentumonfreetrade

A handful of ASEAN business leaders saw free trade advancing in the region over the past year, with 28% reporting that progress has been significant (Figure 13). That being said, there is still more work to be done as over half of them across ASEAN and APEC found that progress has been slow.

Regardless of the highly uncertain outcome of the Trans-Pacific Partnership (TPP), increased free trade within ASEAN continues to be beneficial to the region’s

Figure 13: Progress in free trade

Ithinktradepactscanonlyhelp,theywillnotbeharmful,butweshouldbearinmindthatthefacilitationoftradeissomethingthattheprivatesectorneedstohoneinandreallymakeitwork.Ifit’sjustatradepactoutthere,andwedoourownthing,itdoesn’treallywork.

– Samuel Tsien, GroupCEO,OCBCBank

Progress has been significant

Progress has been slow

Progress has been stalled

Progress has been reversed

Don’t know

0 10 20 30 40 50 60

28%20%

56% 51%

5% 16%

10% 12%

1%1%

ASEAN

The rest of APEC

Q: How would you assess the progress that has been made towards free trade across Asia Pacific region in the last 12 months?


Singapore highlights Slowprogressinfreetrade

• Singapore’s business leaders who saw significant progress in free trade in the past year are few and far between, at 6% (Figure G)

• Additionally, 70% responded that progress has been slow These figures are in stark contrast with the more positive sentiments sounded by ASEAN business leaders on the whole (Figure 13), with 28% saying that "progress has been significant" and 56% saying that "progress has been slow". This is probably attributable to the fact that Singapore's trade has been declining in the past few quarters while certain ASEAN economies have been witnessing relatively strong performance, such as that of Viet Nam and Malaysia.

• Furthermore, Singapore business leaders are also wary of the possible unravelling of the Transatlantic-Pacific Partnership due to US politics and hence this might have led to their more pessimistic assessment.

Figure G: Progress in free trade

Progress has been significant

Progress has been slow

Progress has been stalled

Progress has been reversed

Don’t know

6%

7%

4%

39%

70%

Q: How would you assess the progress that has been made towards free trade across Asia Pacific region in the last 12 months?Base: 54Source: PwC’s APEC CEO Survey, 2016-17

economies and businesses, as they stand to gain more from an enhanced trading environment with greater ease of doing business and increased access to markets*.

*ThesurveywasconductedbetweenMay–July2016,priortotheUSPresidentialElection


What can we learn from ASEAN business leaders to compete in today’s economy?Concludingthoughts

Investment diversification key to growth and resilience

Trade prospects and business opportunities are strong within the ASEAN economies. Meanwhile, the increase in cross-border investments suggest that ASEAN business leaders are laying the groundwork for regional expansion and long term growth. They see the necessity to target growth in their home and new markets or risk losing market share.

Navigating China’s shifting economy through increased and stronger partnerships

China’s transition from an industrial and export driven economy to one that is consumer driven opens up new demand and business opportunities, risks as well as competition. Tapping on the experience and insights of trusted local partners through stronger collaboration is vital to navigating the country’s extensive and unique market.

Sources:

Global entertainment and media outlook 2016-2020, PwC, 2016 http://www.pwc.com/gx/en/industries/entertainment-media/outlook.html

Global Economic Prospects, The World Bank, June 2016 https://www.worldbank.org/en/publication/global-economic-prospects

3 great forces changing China’s consumer market, World Economic Forum, January 2016 https://www.weforum.org/agenda/2016/01/3-great-forces-changing-chinas-consumer-market/

Smarter, More Connected ASEAN, Channel NewsAsia, October 2016 http://www.channelnewsasia.com/tv/tvshows/firstlook/propertyandtech/techknow/smarter-more-connected-asean/3196328.html

Accelerating digital connectivity and addressing data security risks

Digital complacency is not an option for businesses as the proliferation of new technologies such as IOT revolutionises the global economy, driving new business models and forging closer relationships with customers and business partners. ASEAN CEOs are already investing in connected devices and data collection to not lose out in the competition. With many organisations in the region at the nascent or adolescent stage of the digital curve, ASEAN business leaders tend to look to regulations as a safeguard and guide to manage data-related risks.

Balancing policy and market factors in cross-border investment decisions

The regulatory environment matters more to business leaders looking at cross-border expansion. Gone are the days when fast growing markets were enough to entice investors to make big bets. Ongoing global economic uncertainty, coupled with increasing scarcity of underpenetrated markets, are calling for more stringent calculations on the projected risks and rewards from investing in a foreign market. Regulatory conditions matter as a prerequisite in business leaders’ investment decisions.

© 2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

Oon Jin Yeoh Executive Chairman PwC [email protected]

Richard Skinner Strategy Leader PwC [email protected]

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