Technology is a value driver in Asia Pacific

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Technology is a value driver in Asia Pacific

February 2, 2024 / By Myles Huang

The Asia Pacific region is expected to contribute roughly 60% of global GDP growth over the next decade, and widespread tech adoption will be a major growth driver. The burgeoning middle class in Asia Pacific has shown great propensity to embrace new technology, and this is helping power the region’s innovation economy.

Across the region, investments in research and development continue to encourage technological advancements. This transformation not only drives broader economic growth and productivity gains, but also leads to exciting developments on the real estate front from smart cities to clean tech.

As governments in the region increasingly recognise the importance that technology can play in shaping their future economies, demand for future-proofed real estate will reach new heights, and nice to have features like advanced technologies, smart concepts and sustainability measures, will become necessities. Developers and investors who embrace this trend can reap the benefits of a technology-driven economy.[1]

Now, let’s explore some compelling themes that are poised to drive remarkable economic growth in the APAC region.

Innovation: APAC has become a hub for innovation-driven industries, creating new markets and new demand drivers. Some of the world’s most important science & technology clusters are in the region, and the list will only grow given the strong focus on intellectual property already taking hold. China alone accounted for 47% of all patent filings worldwide in 2022, while Japan, South Korea, India and Australia in total accounted for another 18%[2].

Improved connectivity: Improved telecommunication infrastructure will facilitate greater integration within supply chains, thus leading to increased production and trade. 5G is a game-changer for consumers and businesses, with widespread application for supporting IoT to hybrid work. APAC markets have taken the lead on 5G rollout, and it is expected that there will be 3 billion 5G users in the region by 2030, more than the 1 billion users combined in North America and Europe.

Software and IT services: Advancements in software and IT services will play a vital role in driving economic and employment growth in the region. China is already a global leader in e-commerce and digital payments, and it has made breakthroughs in areas like cloud computing. While India has emerged as a global IT and software services powerhouse, with tech related services and development contributing over seven percent of the country’s GDP.

IT hardware & automation: Technological developments in automation, AI and semiconductors will lead to more efficient business processes and significantly enhance productivity. North Asia is already an important base for advanced manufacturing, and this solid foundation sets it up to succeed at its ambitions of becoming an AI powered hub. Japan is a world leader in robotics while South Korea accounted for 61% of the global memory chip market by recent estimates. Taiwan alone accounts for 18% of the global semiconductor market and dominates high-end chip production.

Start-ups: Tech innovations and diffusion have helped spur a vibrant start-up scene in APAC. Not only do start-up ecosystems have a transformative impact on the economy, but they also create employment opportunities for the region’s young, tech-savvy workforce, and become magnets for professionals, entrepreneurs and innovators alike. According to the Global Unicorn Index 2023, APAC counted over 400 unicorn companies or one-third of the world’s total in 2022.

Figure 1: Countries ranked by no. of unicorn companies as of 2022

Source: Hurun Global Unicorn index 2023, Hurun Research Institute