The overriding investment mega-trend – likely to be worth tens of trillions of dollars – of this decade will be technology. This is good news for Asia.
The Covid-19 pandemic has accelerated innovation and disruption and has shifted and increased expectations. The future has happened faster.
The digital revolution is shaping how we live, work and do business like never before in history. The rapid advancement of technologies, including artificial intelligence, machine learning, and fintech apps, has already fundamentally changed business models, institutions and society as a whole – and it will continue to do so at an increasing pace.
The enormous growth and opportunities will be hugely attractive to both retail and institutional investors who will bring their capital, resources and expertise to those regions of major tech influence – including Asia.
Clearly, there is not one Asia. There are significant differences among Japan, South Korea, China, Indonesia and India, for example.
However, in general terms, it is the most dynamic region in the world for e-commerce, search, social networking, gaming, and use of apps, among other tech sectors and has its own bona fide tech giants such as China’s Tencent, Alibaba and Baidu, and Japan’s Rakuten.
The impressive reputation of the region in this regard has come about thanks to three key drivers.
First is innovation, and much of it is happening – and quicker – in emerging economies like China, India and Indonesia, not only in developed ones such as Japan.
A myth that needs to be busted is that Asian tech firms simply copycat Silicon Valley. While they clearly look at what the Americans do, Asian tech giants do more than copy, they really do innovate.
Second is leapfrogging. Most countries in Asia have a high level of social-network and digital penetration, but some developing markets have a poor and lingering legacy in, say, traditional banking, telecommunications and retail. Tech is a great opportunity to leapfrog these and to take advantage of the new opportunities created by digital.
Third, Asian populations are typically open to new technologies, making it easier for firms and institutions to enter the different markets.
These are three cornerstones of Asia’s tech success and they will serve the region well as the digital revolution really takes hold in the 2020s.
People like to discuss so-called “unicorns,” which are defined as companies with valuations of US$1 billion or more. Currently more than half of all unicorns are based in the US.
But I believe that this will change as Asia becomes the undeniable backbone of the major global investment mega-trend – technology – this decade.
Nigel Green founded deVere Group in 2002 from a single office in Hong Kong after discovering a niche market for expatriates in the financial services sector. Since then, it has grown to become one of the largest independent financial advisory organizations in the world with offices and clients across the globe.