The Asian century is unfolding with full speed.

Here are five trends currently unfolding that will be pivotal in shaping the years ahead:

1. The rise of Asia on the world stage

 "Chindia" is the fashionable reference for the continuing rise of two of the world's fastest growing and most populous nations. China and India comprise 40 percent of the world's population. With the standard of living in China one-fifth and India one-tenth that of high income economies, high levels of growth are expected for another 40-50 years. It's likely China will continue as the world's factory and India its office for the foreseeable future. Their political and economic systems are currently vastly different and there is some prospect for cooperation. However, some analysts also see political and economic divergence giving rise to potential conflict.   China's growth has been so rapid that Goldman Sachs a few months ago revised its projection for it overtaking the US (in real dollar terms) by 2027 (moved forward from 2035). The investment bank also projects India will be larger than the US by 2050.

Few multinational companies with operations in Asia have yet recognised the impact this massive shift will have on communications and brand strategies - including where the power over related decisions still resides geographically. The opportunities/threats which are arising have yet to be properly addressed.

2. Choice in markets, politics and brands

Asians are enjoying not only prosperity which they could only dream of in the previous century - choice and personal freedoms are on the rise. Markets will continue to be opened. The longer-term trend is for more choice in the political space too, continuing the developments of the past 30 years.

Increased prosperity will flow through societies across Asia, empowering consumers and providing them with the greatest choices in products, services and how to spend their time than ever before. Civil society will continue developing across the region. Accordingly, the rise of stakeholders will heighten pressure on companies to behave according to international norms, with greater transparency and accountability. CSR is already on the rise, with approaches currently heavily borrowed from Western best practice - expect Asian-grown solutions to emerge.

The ongoing liberalisation of markets will not only bring more multinational brands into Asians' lives, the quality and quantity of locally-produced products will increase dramatically.

Competition will be intense, consumer and media scrutiny unrelenting. 

3. Asian brands going global

The first and second waves of brands from Japan and Korea to go global have been successful in winning awareness - Sony, Panasonic, Samsung, LG and so on. Now the third wave of brands and Asian companies taking on the world is emerging from China and India - Lenovo (computers), Haier (whitegoods), Li-Ning (footwear), Ranbaxy (pharmaceuticals) and Tata (steel, cars and the owners of Tetley tea).

The strategies are currently focused on acquiring well-known Western brands but as experience, confidence - and quality - is further developed, Chinese, Indian and more Taiwanese companies will take their brands to the global markets.  For the time being, Western multinationals which have managed to build indigenous brands with strong local appeal will need to remain nimble and flexible - the key will be identifying appropriate opportunities for portraying foreign or local attributes, depending on the tastes of audiences. Conversely, Asian brands will need to develop globally by downplaying their roots. They should only retain some appeal based on origins when brand development is boosted by that association.

4. Taking the race out of the Asian space race

The much-hyped Asian space race is on, and the effects - far beyond the media sensationalism and patriotism - will be long lasting and mostly beneficial. With space as the final frontier now being conquered, the focus on the heavens truly indicates Asia's arrival. China, India and Japan are all shooting for the moon now. All three nations rely heavily on natural resources and are major exporters. Natural resources on the moon and Mars figure in their space plans. However, the spill over effects for R&D and innovation in the region will be significant.

Governments will need to communicate carefully the benefits of these programs to local audiences as well as the international community to avoid tensions or nationalism being stoked. After an initial period of focus on the competitive elements of ‘being first', the emphasis will likely move to exploring resources and space collaboratively - not exclusively, certainly not in a race - and communicated accordingly.

5. Turning green

The air over much of Asia is brown and polluted. Green zones in populated areas are disappearing. Asia has paid the price for its rapid development and as prosperity rises, the toll it takes on health and the environment will no longer be tolerated. China is showing signs of getting tough on polluters and facing up to the dilemma of development versus growing calls from the international community to cut greenhouse emissions. Japan's experience indicates the trend for the century ahead: its post-war development frenzy and rising level standards culminated in demands for tight controls on pollution and conservation of what remains of the natural environment. The rest of Asia has no choice but to turn green. [For more on H&K's Return on Environment study including impact in China, click here]

Companies in Asia will need energy strategies to deal with rising concern from regulators as well as stakeholders about climate change. Given the state of the environment in the region and signs the situation is moving to a tipping point, broader environmental strategies will also be crucial for corporate reputation.

Trends and events examined in detail

These trends are not only related to economics, politics and security, they have significant ramifications for communications and branding activities of multinational and local corporations as well as governments.

Hong Kong, November 1, 2007