Global multinationals are strategically positioning themselves to harness the immense business potential in Asia. Focused on Asia’s rapidly evolving landscape, these corporations are adapting to macroeconomic shifts, the ascent of artificial intelligence (AI), and evolving sustainability demands. The region’s expansive and diverse markets, coupled with its prominence in technological and sustainability trends, make it a key target for international businesses.
Despite the intricacies presented by Asia’s diverse economies and geopolitical tensions, multinationals remain optimistic, recognising the region’s significance, which is expected to contribute over 60% to global growth in 2023. A poll at HSBC Asia Day 2023 revealed that disruptive technologies, particularly AI, are viewed as the most significant opportunity, while geopolitical tensions pose the greatest risk.
Shifting economic dynamics, with a focus on the ASEAN region and India, are driving record foreign direct investment. Geopolitical considerations and labor cost differentials contribute to investment decisions, with ASEAN countries gaining prominence. The rise of AI, promising transformative developments, is seen as a key driver for efficiency, particularly in treasury functions and cross-border payments.
Additionally, businesses are swiftly adapting to sustainability requirements, integrating environmental, social, and governance (ESG) considerations into supply chains. Stakeholders are emphasizing Scope 3 emissions, necessitating collaboration across the entire value chain. Accountability through compliance with standards like the Task Force on Climate-Related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) is crucial.
By embracing AI, incorporating sustainable practices, and understanding the economic backdrop, multinationals position themselves to seize the abundant opportunities that Asia presents.