Asia has developed from being the manufacturing plant of the world to becoming a major driver for global economic growth. The Asian growth trajectory is projected to continue, resulting in noteworthy economic, political, social, resource and environmental challenges. However, the burning question we need to address is - can Asia afford, for the next 50 years, to grow its level of consumption at the same rate as Western nations have done for the past 50 years?
Deloitte recently reported that that if every one of the new consuming middle class ‘were to adopt the historic consumption patterns of the average citizen in the United Kingdom, three planet Earths would be required to sustain them – five if they were to live like the average North American.’ Asian business leaders will have to face the consequent challenges. A lack of solutions to these challenges will have a devastating effect on the rest of the world. At the same time, Asian business leaders need to assess if the Anglo-American or European model is suitable for Asian countries, societies and businesses, and to find new ways to mitigate poverty as well as provide directions for a sustainable way of life.
It is a unique opportunity for Asian leaders to turn these challenges into extraordinary opportunities to drive solutions that could potentially be exemplary models for the rest of the developing world to emulate. Solutions in sustainable design, sustainable manufacturing, and innovations in clean tech and clean energy can point to a future where growth and raised living standards are possible without neglecting the environment challenges that so far have gone hand-in-hand with economic progress.
Fostering innovation and creativity
With the rise of the middle class, business leaders in Asia are looking to create their own success stories of products or services through a focus on R&D, design, innovation and brand strategies. However, substantial investments into R&D, design and brand do not always guarantee market success.
Millenials base their purchase decisions on image and aspirational values. Increasingly social issues also play an influential role for these new consumers. A great rise in population, particularly of the middle class in Asia, coupled with this new consumer behavior is bound to transform Asian businesses. We will see them eventually moving away from emulating Western businesses to spearheading new innovations for Asia and the world.
Insight into the methodologies used by established design firms, paired with the disruptive power of creativity and innovation can help to formulate winning strategies. These methodologies of design thinking and systems design have the potential to arrive at solutions that never lose sight of economic, market, social, psychological, behavioral, cultural, ecological and environmental challenges or situations. At the same time they can provide aesthetically pleasing and quality-of-life enhancing products or services that can help counter problems such as climate change and ecological challenges.
Driving an environmentally friendly development agenda
Product development processes are continuously maturing. The value of design, innovation and its methodologies are increasingly recognized at every executive level. All of this has urged business leaders to seriously consider the impact of their businesses on the life of their customers – not just from a technical or a financial point of view, but also from that of sustainability and social issues.
Sustainable design, clean energy and clean technologies have become the new hot buttons for many countries and businesses alike. For countries in Asia, investment in clean energy and technology has started to solicit a more important place in the development agenda. According to the 2010 Thomson Reuters’ Cleantech Handbook for Asia Pacific, the ‘Asia Pacific Region (APR) will be the largest Energy Market and clean technology Market in the world, by 2030.’ Research also indicates that - just for renewable energy alone, China and India will lead the renewable energy market; by 2016 China’s renewable energy market will be US$53 billion, India’s US$14.4 billion.
The large amount of investment into clean energy and clean technology is a necessary consequence in anticipation to the rise of the middle class. Without a doubt, the rising middle class will be the growth engine for Asia Pacific in the years to come. The increase in the availability of consumer credit, however, and of general consumption will in turn increase the hunger for energy and the need for energy generation.
For business leaders in Asia the imperative conclusion and message is clear and simple –
- to reduce energy, material and water consumption of offices and manufacturing processes
- to design for disassembly and recycling
- to comply with Restriction of Hazardous Substances Directive (RoHS, adopted by the European Union in 2003) and Waste Electrical and Electronic Equipment Directive (WEEE, introduced by the UK in 2007).
While this might seem like a lot to ask for, it is the foundation for innovation of new processes that lead to the development of greener products, improve the lifestyle of people, reduce carbon footprint or waste and help consumers understand energy consumption and waste. The list of opportunities here is extensive, showing plenty of reason for Asian businesses to be in the position to lead if their leaders are able to form their organization’s corporate culture to be open for these new opportunities.
Leveraging Asia’s cultural diversity builds opportunities for sustainability innovation
In Asia, it is not uncommon to find diverse cultural situations, not only in business but also at the ethnic, national and regional levels. As innovation is best achieved through an open dialogue of different opinions and ideas, this diversity of the Asian markets and culture has the potential to be a petri-dish for nurturing innovation. Organizational cultures need to be primed to accept innovation, and thus one of the biggest challenges for Asian business leaders is to embrace the regional cultural diversity as well as establish an organizational culture that is conducive to innovative products or services.
Business leaders in Asia need to be aware a) that success for companies of any size is rooted in its organizational culture, and b) that a guiding framework of behaviour, norms and values can lead an organization to becoming a high-performing business. To alter corporate culture – with the aim of providing meaningful innovation to society at large – companies need to start with listening to the customer, and understanding consumers’ needs and requirements. Luckily, it has become very easy today to be attentive and to listen to the experience customers have with companies. There are myriad possibilities for connections between companies and their customers - more than ever before - through technological advancement in interconnectability, social networking and cloud computing.
The opportunities are vast for the true Asian leader to guide businesses to significantly contribute not only towards their own commercial success, but also the success of the region as a whole. Today, the market-moving innovation and cultural dynamism is what builds a country’s or a company’s prominence. It will definitely be challenging to navigate an increasingly complex, multi-polar environment with geo-political challenges, economic and cultural differences. However, Asian business leaders are in a good position to step up and steer organizations toward more mature and dynamic economies through innovations in clean tech and sustainable design. More than ever, there is a role to be played in Asia to build authentic, clear, consistent, strategic and solid brand stories for the innovation of products and services to enable all of us, collectively and consciously, to contribute to a better world.
Jake Layes is Autodesk’s Head of Clean Tech Business Development in Asia Pacific.