Entrepreneurial Challenges and Opportunities in Asia
The Asian Juggernaut
Aspiring entrepreneurs around the world have several opportunities both within their countries as well as in overseas destinations. With the opening up of many Asian economies, western entrepreneurs can now invest in countries such as China and India along with Indonesia and Thailand in addition to the latest entrants Vietnam and Cambodia.
Indeed, all these economies have been growing at a faster rate than the ones in Latin America and Eastern Europe. Having said that, it must be noted that despite the governments in these countries being business friendly and open to foreign investment, the ground realities are such that entrepreneurs might find the going tough due to a number of reasons.
Challenges for Doing Business
- First, the red tape and the bureaucracy in these countries means that unless the entrepreneur is well connected locally, he or she would be facing hurdles in land acquisition, licenses, and other approvals. In addition, the legal system in many of these countries is slow moving and archaic meaning that honoring of contracts and arbitration in case of legal disputes would take a long time and more importantly, would be subject to age old laws and regulations.
- Second, despite the enthusiasm at the national level, entrepreneurs would have to deal with the state and provincial governments in these countries which have their own set of policies governing business and regulating commerce.
- Third, the infrastructure in these countries is sometimes not up to global and western standards meaning that bad roads, erratic and poor power supply, irregular water, and urban congestion mean that the entrepreneurs have to deal with these challenges as well. Fourth, social stability and unrest are big risk factors as is the aspect of safety of women which means that unless the entrepreneur is planning to have a setup with minimal staff, he or she would have to contend with all these issues as well.
Opportunities for Growth
However, the picture is not as gloomy as it sounds since there are still some bright spots in these countries that offer entrepreneurs the chance to actualize their dreams. For one, the emerging middle classes in these countries are a source of rich workforce which means that there is a readily available base for the entrepreneurs to hire. Second, the wages are low by western standards and this means that any venture in these countries can be carried out at substantially low costs than in the west. Third, the purchasing power of the people in these countries is growing meaning that there is a ready and untapped market for consumer goods and durables.
Finding the Balance
Therefore, it is evident that while there are challenges there are opportunities as well and vice versa and hence, finding balance is up to the entrepreneurs so that their businesses or ventures can succeed. There are a number of ways in which the entrepreneurs can ensure success of their ventures and this is in finding creative and innovative solutions to the problems. For instance, both Shanghai in China and Bangalore in India have emerged as innovation hotspots where new startups and ventures are succeeding. In addition, Ho Chi Minh City in Vietnam and Laos in Cambodia have emerged as viable contenders to these countries though they are still far behind.
Some Booming Sectors
The point that we are trying to make is that these countries offer the much needed worker and purchasing power capabilities in addition to having oases of business incubators amidst the chaos. Indeed, if one looks at the number of tech startups in Bangalore in the last two years and the number of biotech and alternative energy ventures in Shanghai, there is a distinct feeling that the entrepreneurial energy is being unleashed after a lull following the 2008 global economic crisis.
The success of the eCommerce ventures in China and India wherein companies such as Alibaba and Flipkart have been growing exponentially means that there are enough opportunities for growth in these countries. This is the reason why many venture capitalists and angel investors have been pouring money into these sectors in addition to global giants such as Amazon setting up their regional bases.
Growth is not a Luxury but a Necessity
Finally, all these countries are making efforts to harness the power of the entrepreneurs since the governments as well as the people have realized that unless they grow and continue to grow, ensuring that the young get jobs and actualizing stability for the people would be difficult leading to chaos and unrest. Therefore, it is the case that these countries do not have the luxury of waiting for growth to happen and instead, they have to make it happen and this is something that entrepreneurs can take heart from.
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The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
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