Southeast Asia Set to Rival China, India in Market Potential
Southeast Asian nations looking more attractive to multinational companies
With emerging economies such as China and India slowing down, the Southeast Asian nations are emerging as key destinations for multinational companies, both as markets for their products as well as a source for new technologies, according to Lux Research.
The growing maturity of higher education institutions in the Association of Southeast Asian Nations (ASEAN), accompanied by higher research and development spending, make them attractive partners to drive indigenous innovation to serve local needs.
Research originating from the region covers a wide range "“ from blue-sky to regionally focused clinical and product relevant solutions. The region also offers unique capabilities. For instance, the formulation and delivery research at the National University of Singapore is largely health-care-oriented, creating enhanced formulations to improve wellness or clinical outcomes.
"As a collective bloc, ASEAN's allure is set to steadily increase and is poised to rival India and China in market potential due to its rapidly growing population and economy," said Yan Xiang Yang, Lux Research Analyst and the lead author of a report on the subject.
Lux Research analysts analyzed primary publications from each country throughout the region to zero-in on the innovation hotspots in the ASEAN countries, with particular focus on formulation-and-delivery-related expertise.
Malaysia, Singapore and Thailand are innovation hotspots. Malaysia, Singapore, and Thailand are the powerhouses of innovation, contributing more than 95 percent of the region's total scientific publications and 98.5 percentÂ of the region's formulation and delivery work. Thailand shows diversity in thought, while Singapore leads in rigor.
The region's focus on research and development is growing. With growing prosperity, ASEAN nations are now spending larger percentages of their gross domestic profit on research and development, boosting productivity. Singapore leads the way with R&D spending of 2.14Â percent of GDP. The rest of the countries still spend much less but both Thailand and Malaysia expect to soon cross the 1Â percent threshold.
Southeast Asia has a growing consumer base. Since 1980, the combined population of ASEAN nations has nearly doubled to 341 million and is growing at an average annual rate of 1.41Â percent, faster than the world rate of 1.1Â percent. To tap the growing market, industries such as consumer packaged goods (CPG) and pharmaceuticals are focusing on the most populous nations of Indonesia, the Philippines, Vietnam and Thailand, all of which can sustain a volume-driven growth strategy to counter depressed sales elsewhere.