“Re-Emerging” Economies

Last year, upon my return from the HRO Today Forum APAC, I wrote a piece on doing business in the East called Into the Eyes of the Befuddled Dragon. My point was about the confusion on the part of East and West in trying to understand each other in the management of global HR departments. I returned from Singapore this past weekend after the most recent HRO Today Forum APAC, and I am ready to report that the relationship is still in need of considerable improvement.
I first want to thank our sponsors for their support and thank our wonderful attendees for a lively few days of discussion, debate, and networking. Local frustration in the region is still considerable, with solution sets being foisted on them out of corporate headquarters located in the West.
A few glaring issues bothered me. First, if the top economy in the world in 1800 was China, and the second was India, and those two accounted for half of the worldwide economic output, why are these now dubbed “emerging” markets? (By the way, France was third.) It took until 1850 for Britain to move up to the top three, based on the British industrializing, capitalizing economy.
So, perhaps, we should not say they are “emerging,” but, instead, that they are capitalizing and industrializing. But this does not work either, as service economies are part of the growth in this region. In truth, they are just economies. “Emerging” sounds faintly, or not so faintly, chauvinistic in the classic sense of that term. “We are fully emerged, but you are getting good too.” Really?
In truth, much of economics occurs in cycles, and 213 years ago, population and workforce skill were major factors in economies. In the service-based world many of us live in now (no discounting of the manufacturing sector in the APAC or the rest of the world), population and labor rates are again a factor.
So, why is Asia different? Is it because it is “re-emerged”? No, the problem for most Westerners is that Asia, APAC, the Orient or the place on the right hand side of the map or, whatever you call it, does not in a real sense exist. You see, APAC is a series of distinct economies. Korea is very different from Vietnam, and each of those is different from Japan or China or India. There is no “one kimono fits all” solution. For Westerners, we all understand that you cannot sell in rural Kentucky the same way you do in New York, but we are not clinically making that distinction in APAC well. At least, when I heard complaints from the practitioner side about the failure of home office to understand their challenges or I heard from the provider side the failure of the buy side to understand the scope of their solution sets, this was one of the overarching themes. Solutions that are acceptable in Singapore do not work well in Guangzhou.
One of the other curious things I noticed is that many of the HR-side and provider-side employees (more so for providers) are expatriates recently emigrated to the East. This does not help. I think it would serve all companies to find great local talent and send them to the West where some of the HR practices in question are more highly developed and have those resources, who understand and function in the local country’s culture, return in a year or two to APAC and transplant these practices in a way that is culturally acceptable. In essence, we need a “global executive exchange program.”
Lastly, you cannot transfer market solutions in HR or HR outsourcing to APAC without recognizing that the United States and European Union are more mature markets for these solutions, so you cannot sell these developed market solutions to a market that is still feeling its way along and trying to gain a belief in their efficacy. Everyone needs to accept that companies in APAC are more likely to be skeptical and to want to pilot a solution than companies in say the U.S. or U.K.
One thing was clear, the dragon is still befuddled. And, a befuddled dragon snorts fire in every direction, and this benefits no one. We, in the West, need to accept the realities of all of the “micro business climates” in APAC, and we will succeed there. It will require continued investment and patience. This is the same evolution that occurred in the West. It will not happen overnight.
Elliot Clark is the CEO of SharedXpertise, the publishers of HRO Today.

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