In a survey of 1,200 leaders of small- and mid-sized business enterprises (SME) in Asia conducted for an annual study of the Asian markets by UPS (Atlanta), more than half (57%) expect the U.S. and Chinese market to reach parity within 10 years. The Asian business executives were interviewed for the UPS Asia Business Monitor, an annual survey designed to gauge the competitiveness of small- and mid-sized enterprises in Asia.
Survey respondents ranked China as the country with the greatest prospects for economic growth, followed by India and Hong Kong. But there was ambivalence about China's growing economic power. Asian business leaders were divided between those viewing China's continued dominance as a boost (34%) and those who perceive it as both a boost and a threat (34%). Many feel they are unable to compete with Chinese companies in terms of low labor and production costs (38%), and there is a growing concern about increased price competition (25%).
"Small business leaders on the ground in many Asian economies say that China's consumer market is growing faster than some leading researchers project," said Alan Gershenhorn, president of UPS International. "American businesses must understand that their future customers are just as likely to hail from Beijing as from Boston."
Business leaders across Asia expressed a desire to capitalize on India's rapid growth by leveraging its continued rise as a manufacturing base (30%) and outsourcing there (25%). Eighty-five percent of respondents said that India is or has the potential to be a regional economic leader, and 81% said that India's economy is certain to grow in 2007. Small business leaders in India were the most optimistic in the region, with 89% of respondents expecting greater economic prospects for their businesses in the year ahead.
Although bullish on the region's growth prospects, survey respondents also warned about threats to the region's competitiveness such as a lack of innovation, low availability of a qualified workforce and access to funding and working capital. The top three business concerns that keep small business leaders up at night in Asia should be familiar to business leaders around the globe. They are the quality of their services (50%), customer loyalty (48%) and the retention of quality employees (47%).