For the first time, there’s a new world economy big enough to be comparable to that of the United States: Asia. But to capitalize on that market, U.S. businesses have to treat Asian branches of their companies less like outposts and more like local headquarters.
Asia, said University Distinguished Professor of international business and strategy Ravi Ramamurti, currently represents about one-third of the world’s market by gross domestic product. China by itself represents about 15 percent of the world GDP, he said, meaning that it’s ripe for investment opportunity.
How, exactly, U.S. companies are taking advantage of that opportunity was the focus of the eighth annual symposium hosted by Northeastern’s Center for Emerging Markets on Tuesday.
“The future is bright,” said Dunton Family Dean Raj Echambadi, dean of the D’Amore-McKim School of Business. “Asia is an attractive destination for businesses looking to compete.”
Jimmy Weng, a 2007 graduate of Northeastern’s business school and the current head of offshore investment strategies at ICBC-Credit Suisse Asset Management, said that Asia’s economy is entering a “supercycle” of market boom. Weng joined the symposium via video call from Hong Kong.
The challenge is that U.S. businesses are about as geographically and politically distant from Asia as possible, said Ramamurti, who is also the director of the Center for Emerging Markets.
The secret, then, as several company executives told an audience of business leaders, faculty, and students at Northeastern, is that U.S. companies need to treat Asian branches of their businesses less like outposts and more like local headquarters.
Syed Jafry, president of regions at Thermo Fisher Scientific, was responsible for expanding the multinational biotechnology company into emerging markets in India, China, and Latin America, among others. He also serves on the board of the Center for Emerging Markets.
“In the last 10 years we focused on building infrastructure in those regions,” he said. Once they were established, Thermo Fisher emphasized a local presence. The presidents of those now-robust Indian, Chinese, Brazilian, and Mexican arms of Thermo Fisher are Indian, Chinese, Brazilian, and Mexican business leaders, respectively.
“In my view, it’s becoming a requirement that if you want to be successful, you have to have leadership that’s diverse, global, and has an understanding of how to operate in the world,” Jafry said.
Similarly, Suran Magesvaran, president of Procter & Gamble’s Asia-Pacific and India, Middle East, and Africa divisions, said the consumer goods giant has made successful global investments by recruiting “the best talent in the region.”
Magesvaran, who joined the conference via video call from Singapore, emphasized that the region-specific decisions P&G has made have been crucial to its success outside the United States.
Ramamurti summarized: “China is leading the way to a new era in globalization. The headroom for growth in Asia is very significant.”