Creating a Generation of Asian Business Leaders

The center of gravity in the global economy is rapidly shifting to Asia. The region, led by emerging market powerhouses India and China, is first out of the gate in the global recovery and building on its lead. This is more than a simple economic resurgence. A new, 21st century model for success that has the potential to endure for decades is taking shape.

With all of Asia’s promise, the market also presents considerable risk. Success will come down to the quality of leadership talent, particularly local talent, in place. This talent will be different than any previously sought in Asian markets. Leaders must be more participative and less directive, more strategic and less operational.

Research data from executive recruiting firm Korn/Ferry suggests the leadership style required to meet this need is in short supply. To understand the emerging leadership and development needs in the region, the forces propelling the Asian economy forward at such a rapid pace must be examined first. There are three fundamental shifts at work:

The consumer shift: This is the most critical shift under way. Asia’s middle class is growing at a frenetic pace. During the next two decades, the ranks of the middle class in Asia will swell exponentially. The Brookings Institution estimates that nearly two-thirds of the world’s middle class will reside in Asia in 2030, more than double today’s figures. As the new middle class emerges, so will new attitudes toward consumption. A recent Credit Suisse survey of emerging consumers also indicates an increase in discretionary spending in India and China.

The innovation shift: Companies such as GE and Tata recognize the need to adapt their products and services to the burgeoning middle class. This has unleashed a wave of innovation. According to its Ministry of Commerce, China is now home to more than 1,200 foreign-invested research and development centers.

The workforce shift: If companies are going to succeed by creating new types of products and services for a new type of consumer, they will need a new type of employee. Asian managers have historically focused on building a low-cost, high-productivity workforce. The emphasis is now shifting to developing a creative pool of talent that can generate and implement breakthrough ideas. Singapore is noteworthy for increasing research and development spending more than 20 percent in an effort to further transition from manufacturing to a knowledge-based economy.