You’re probably well aware of the effects on ASEAN’s economy amid the COVID-19 pandemic, but how do you look past the horizon?
For any startup, forging and adapting your long-term vision is imperative to drive success. Even for investors and corporates, understanding how this pandemic’s long-term impact is crucial to making their respective managerial and investment decisions.
As part of our three-day Vietnam Venture Summit, we gathered industry veterans and policy influencers to get their take on what’s ahead. The summit’s first panel (video) was moderated by Bruce Delteil, Partner at McKinsey in Vietnam with over two decades of international experience.
Panelists included: Dong Jun Im (CEO of Hanwha Life Vietnam), Bernard Thiam Hee Ng (Senior Economist at Asian Development Bank), Steve Okun (CEO of APAC Advisors and ASEAN Rep. to EMPEA), Nam Thieu (General Director of Qualcomm Vietnam), and Jeffrey Joe (Founding Partner Alpha of JWC Ventures).
Disruptions, solutions, and revolutions
Every region was disrupted by the COVID-19 outbreak. But while the virus has affected every nation, its timing, degree of shock, and countries’ responses have varied significantly.
Here are a few key takeaways: Firstly, the pandemic’s economic hysteresis may spur ASEAN’s investment in sustainable infrastructure. Steven Okun had particularly astute observations in this area: fintech wave is moving trends in sustainable initiatives that have been a long time coming in financial inclusion, renewable energy and agritech.
On the same note, Bernard Thiam called for ASEAN to shift policy focus from financial support to transforming the economy with investments in basic, sustainable infrastructure. This yields a smoother transition to near-term job creation and future sustainable growth.
For instance, although ASEAN’s internet penetration is rising, Indonesia’s 38 per cent of people still don’t have access – that’s over 100 million Indonesians. In a post-pandemic world, we’ll witness accelerated internet penetration as a result of considerable government investments in such areas.
With regards to the green energy facet, the market is largely untapped because ASEAN economies’ renewable power capacity is on average ten per cent lower than that of the Asian average of 34 per cent (Garrett-Peltier, 2017).
Economies in the ASEAN could invest in such infrastructure to support startups and corporations’ ethics-driven business models alike.
Next, a post-COVID world will invariably demand the continuous shift towards digital technologies as a cornerstone of business strategy – no longer making technology a strategic move, but an essential element to growth.
Also read: COMEUP 2020: Ushering the post-pandemic future with startups at the helm
Not only is the success underlined in the e-commerce channels, but also the accommodation of remote workers. In the long term, consumers and businesses will be unprecedentedly reliant on technology for expenditure and day-to-day operations, respectively.
Thirdly, emerging ASEAN countries may become an epicentre of labour-intensive manufacturing work. Even before the COVID-19 outbreak during this past March, trade was already regionalising in ASEAN.
Given the increasing geopolitical tensions between today’s gigantic manufacturing hubs and developed economies’ businesses, Nam Thieu can attest to global firms inclined to diversify their sourcing to ASEAN countries– a main motivator for Qualcomm’s recent talent initiatives in the region.
This enticement could be the ASEAN countries’ impetus to the development of labor-intensive manufacturing plants. Case in point, Vietnam has famously become a key manufacturer for Google’s and LG’s globally shipped smartphones.
Penultimately, the post-COVID age presents a paradigm shift around its digital transformation and political tension between trade and protectionism. Akin to the G10 economies, ASEAN countries will experience increased demand for skilled workers in information technology fields. Vietnam is perfectly placed with its strong pipeline of tech talent, fostered by years of education and retraining by the government.
Jefrey Joe and Steven Okun also commented on the often contradictory factions within the region’s ruling parties: rising nationalist tendencies coexisting with the interest in opening up to trade deals and international competition.
The catalyst for organisational change
As a startup founder, it’s imperative to reflect on the panelist’s insights within the meaning of your business: the context of your customer’s evolved needs and wants, your startup’s value proposition, and its overall resource-constrained capabilities.
Will your customer’s spending patterns change after the pandemic? Do new delivery channels need to be considered (e.g., switching from physical retail to e-commerce)? Do you need to take safety precautions even after the pandemic, particularly if you offer services that must be performed face-to-face?
In a future of a technologically adept workforce, it’s important to strategise how you differentiate your product(s) digitally, notably in the light of the user experience and user interface. Supply chain and production capacities will be at the forefront of your mind – especially for resource-intensive startups – since cross-border supply chains will have been disrupted.
Ultimately, it’s crucial to assess where your startup’s business model lies within the aforementioned considerations upon hearing the panelist’s insights on the macroeconomic status of the ASEAN economy.
The learning doesn’t end here
The Vietnam Venture Summit is the (semi-virtual) place to be if you’re yearning for answers about how to navigate your startup beyond these turbulent times. You’ll have the opportunity to hear from ASEAN’s top CEOs, investors, and Vietnam’s Deputy Prime Minister.
With contributions from Timo Fukar
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