The State of Entrepreneurship in Asia-Pacific Economies
Entrepreneurs play a key role in Asia Pacific (APAC), with entrepreneurship being the engine room of national economies. A new report from Frost & Sullivan in collaboration with Oracle explores what drives entrepreneurs in the region and how they define success.
Researchers interviewed more than 500 entrepreneurs in Australia, New Zealand, China, Hong Kong, India, Japan, the Philippines and Singapore – to get a behind-the-scenes look at one of the most dynamic entrepreneurial regions in the world. world.
The first on the agenda is motivation: what drives people to create and start a business? More often than not, this is a response to a market gap, driven by a personal passion for business – referred to by researchers as “entrepreneurship of opportunity”. Over 40% of respondents are looking for an opportunity with their business – a segment dominated by China and Hong Kong.
Others start their businesses out of the need to earn money – a prevalent driving force in the Philippines and New Zealand. The need to master one’s professional background and family obligations to take over the business also play a role in some cases – most often in Australia and Japan.
Regardless of motivation, the goal of most entrepreneurs is monetary. Cashing in enough wealth for yourself and your family – either by selling or listing – is a common intention, and profitability is the primary measure of success for nearly 60% of businesses. This is closely followed by customer satisfaction, which sets the stage for retention and future growth.
Income and personal compensation are also the main indicators of a company’s success, while others are satisfied with high valuation, good social impact and a healthy workforce. All things considered, indicators of growth and profitability are considered more than the goal and values - at least among entrepreneurs.
With large pools of investment flowing into the APAC region, it’s no surprise that the overwhelming majority – less than 80% – believe their businesses are successful. The anomaly here is Hong Kong, where less than 30% of entrepreneurs claim to be successful – with over 40% reporting uncertainty about the status of their business.
Japan also produced a relatively modest response set, with less than half of companies claiming to be successful. All of the other APAC markets studied had a success rate of 70% or more – New Zealand and China hovering around 90%, while India and Australia follow closely behind at around 85%.
“The results of this study show that we can be confident about the state of entrepreneurship in the Asia-Pacific region,” noted Frost & Sullivan director Mark Dougan, who underscored the promise that such scenario brings in a broader economic context.
“Entrepreneurs play a key role in national economies, with individuals’ willingness to start businesses and their success in growing those businesses being key aspects of national economic success.” Not to ignore the elephant in the room, Dougan also highlighted the positive response to the global pandemic.
“Entrepreneurship is a lifelong learning journey, and after the uncertainties of the past year, the most important lesson learned is to have a flexible business model. Most entrepreneurs feel that they have reacted well and feel confident in their own success, as well as in the growth and future success of their businesses.
One example is technology – which is quickly becoming the foundation of most operations. More than 65% of companies now use software to be successful, including Software as a Service (SaaS) – “an increasingly common way to access key business applications,” according to Dougan.