South East Asia, with an overall aging population, growing intra-Asian trade and increased emphasis on education is perfectly positioned for growth in the scientific and analytical instrumentation industry.
Yet, the region which has a larger population than both the European Union and North America respectively, is often overlooked by many industry players within the scientific instrumentation industry despite its 620 million inhabitants and huge market potential.
The establishment of the ASEAN Economic Community has transformed South East Asia into a region with free movement of goods, services, investment, skilled labor, and freer flow of capital. ASEAN, as a single market and production base is making this region more dynamic and competitive, accelerating regional integration, facilitating movement of skilled labor and talents and strengthening their international position.
Here are the three key trends taking shape in South East Asia that manufacturers and suppliers of scientific instrumentation products and services should know:
The overall growth in Asia is double that of the global growth rate, particularly the frontier markets in South East Asia like the Indochina region and Indonesia. More important, the region is home to a rapidly growing middle class and an aging population.
Deloitte projects that those in Asia aged over 65 will exceed 520 million in 2027. While this creates emerging challenges for these nations, aging populations will also generate a growth cluster of new business opportunities.
The money being spent by and on aging populations will grow even faster as Asia Pacific’s healthcare expenditure is projected to rise more than 150 percent by 2020, the result of longer life spans and improved healthcare. This will drive the need for an increasing range of new, cost-effective health care and agricultural products for decades to come.
New types of industries and products are expected to be developed, such as:
The growth in the life sciences industries alongside increasing investment for infrastructure, research and development (R&D) presents vast opportunities for the scientific and analytical instruments industry.
Intra-Asian trade will grow exponentially over the next decade as China and Japan continue to invest aggressively in ASEAN’s infrastructure. The total number of free trade agreements (FTA) in Asia was 132 as of 2010 with about 50 FTAs already in place in South East Asia alone; around 80 more are in negotiation/preparation within the region.
Traditionally, countries with high R&D spending such as Japan, China and Korea, have the highest demand for scientific equipment. But we are seeing increasing demand from countries within South East Asia. On this trend, we should be witnessing more local manufacturers taking steps to enhance their output quality and efficiency to stay competitive.
This would mean a higher demand for precision analytical equipment to meet international standards and regulations. For example, Thailand’s government which recently introduced the Industry 4.0 initiative, has committed substantial investments into high-value manufacturing and R&D into different industry sectors including bio-technology and food.
As for DKSH, we have and continue to work with businesses in Cambodia, Vietnam, Myanmar and the Philippines to set up testing laboratories that comply with international standards as well certification requirements.
The Philippines has established the country’s first halal testing laboratories in four regions to cater to the rising consumer demand and growing halal population in the country. The government is also using these lab facilities, which helps implement stringent halal standards and certification systems, to support the surge in its exports of halal products to the global marketplace.
Another example is Cambodia where they recently rolled out the country’s first mobile laboratory to help safeguard food safety for its people across the country.
Across Asia, governments and the private sector continue to introduce national programs focusing on the importance of education to create knowledgeable workforces to boost their respective economies.
As a result, local businesses have directly benefited from a growing talented workforce with the necessary skill sets to develop and apply cutting-edge high technology projects, resulting in more R&D and the creation of more innovative products.
There is clearly an increasing demand for scientific analytical equipment not only within the private sector but also from the academic sector and institutions of higher learnings. The establishment of the Center of Excellence at Bangkok’s Mahidol University last year is a good example. The facility aims to foster stronger collaboration between academia and industry as well as to increase output of R&D activities.
Gabriela is based in Zurich and has been with DKSH for seven years helping the company to expand their business in Asia. She has previously worked with several international brands in the life sciences sector and has vast experience developing strong relationships with customers and business partners worldwide.