Up until recently, Western countries like the US, Germany or the Scandinavian nations were widely considered the bedrock of tech innovation. But as new players enter the game, this has already begun to change. What could this mean for Southeast Asia?
The strength and vitality of the western economies have often been documented in the paychecks of some of the world’s leaders. The Prime Minister of Australia currently brings in around a whopping $500,000 per year, while the US President ranks third at approximately $385,000 and German Chancellor Angela Merkel takes home roughly $355,000.
The arrival of new strong contenders that represent the broader Asian markets could gradually tip the balance in favor of leaders of Asian countries. It might also provide a much-needed impetus to secondary markets, like the forex market that is very sensitive to the reallocation of wealth between established and emerging economies. In recent years, the forex market has been booming, as forex DMA — short for direct market access — has allowed individual traders access to the physical market without the need for an intermediary, resulting in the possibility of a quick profit from these financial shifts.
As countries in Southeast Asia continue to rise on the international financial and tech plane, we could see a boost in trading in Singapore dollars or Philippine pesos, up there with the traditionally strong players like the Japanese yen or the Chinese yuan. Yet it is not only the robustness of the economy that reflects this new Spring that Asian markets are experiencing – it is also the fact that investment flocks to Asian countries, albeit perhaps to some more than others.
Companies like Alibaba or Tencent have managed to shift the focus of international markets in the past decade or so by showcasing the potential of investing in the Asian region. Just in Q4 2019 alone, Alibaba saw a 51% year-on-year growth that translated into $13.9 billion in revenue. These tech giants were founded in China in the past 20 years and have slowly yet steadily managed not only to establish their domination in the region, but also to expand their activities abroad.
But the new wave of financial and technological growth seems to be coming in from abroad, as Southeast Asian countries bring in foreign tech giants. Singapore has become a vibrant tech innovation hub thanks to its free trade agreements, human capital, and openness to digital trade and data flow, attracting top names like Amazon, Google, and Facebook. As one of the top priorities for these tech giants is to establish a regional springboard in the area that could give them access to other markets, too, this could mean that some of them will be looking to expand towards the east — where the Philippines emerges as the natural contender to base a company’s regional headquarters.
One of the biggest advantages of the Philippines is its central location and the easier access it provides to strong markets like China, Japan and South Korea. With its startup-friendly business landscape, its investment in digital infrastructure, and a multicultural environment that makes expats feel at home, the Philippines are currently attracting and investing in international talent that could make tech conglomerates flock to the country over the next few years.
However, it remains to be seen whether these strategic advantages it offers will allow the Philippines to rival Singapore as the broader region’s innovation center.