By 2040, Asia could comprise more than half of global GDP and drive 40 percent of the world’s consumption, giving it the potential to fuel and shape the next phase of globalization. This seismic shift was the impetus for our Future of Asia research series on what expanding growth and opportunity in the region means for governments and businesses around the world.
“Between Malaysia, Indonesia, and Singapore—I’ve been working in Asia for over 17 years,” says Oliver Tonby, chairman of McKinsey’s offices in Asia. “It's an area of real global business growth.” Oliver explains that while its economies have been expanding beyond the rest of the world combined and leading in trade, capital, talent, and innovation, the region’s growth story had not been extensively told until our research series.
“Growth and opportunity in Asia have significantly advanced human development—from longer life spans and greater literacy to a surge in internet adoption,” says Wonsik Choi, managing partner of the McKinsey Korea office.
Wonsik and Oliver partnered with the McKinsey Global Institute to develop the Future of Asia research across several modules. The topics include areas where Asia has undergone monumental shifts: trade and network flows, Asian corporations, technology and digital, the Asian consumer, and climate risk response.
A year into our research, the Future of Asia series has earned seven global Hermes Creative Awards—one of the oldest and largest creative competitions in the world that recognizes the creative industry’s best publications, branding collateral, websites, videos, advertising, marketing, and communication programs. Two videos, Can Asia define the post-pandemic next normal? and The Future of Asia is now, received Platinum Awards, Hermes’s highest recognition.
The latest module of the campaign, which was released last week, looks at how climate risk could play out in Asia and what measures can be taken to manage that risk. Our analysis finds that the socioeconomic impacts from intensifying climate hazards could in many cases be more severe for Asia than for other parts of the world if gone unchecked.
Like other regions, Asia’s growth will be shaped by the coronavirus crisis. “Many countries in Asia have been successful with containment and mitigation efforts," says Oliver, "with much of the early innovations having come from the region, such as contact tracing apps, wearables, and testing facilities."
Wonsik adds that Asia is generally resilient to disruption. “In an increasingly volatile world, Asian companies have demonstrated dynamism, speed, and agility, which have all contributed to the region’s macroeconomic stability and ability to pivot quickly in times of crisis.”
Patti Wang, a Chinese-Canadian engagement manager who moved to Shanghai while conducting the initial phases of research, also points to the boom in the number of developing Asian countries leapfrogging into middle-income and advanced economies. For example, when most people think of manufacturing leaders, they think of Chinese cities; but there are others—like Jamnagar, India—that are quickly becoming contenders. This is reflected in the region’s ongoing industrialization and urbanization, rising demand and productivity growth, and dynamic corporate sector.
Patti explains how the campaign has opened up numerous conversations with clients over the last year who are rethinking where and how they want to invest. “‘In what areas is Asia underinvested?’ is what people want to know,” she says. “Knowledge-intensive sectors, like pharmaceuticals and tech, are some examples.”
Wonsik adds: “Our aspiration for the Future of Asia is to inform the ways in which public and private sectors think about the region as it continues its rapid evolution.”