East Asia is increasing
as a powerhouse of manufacturing but is also becoming a consumer of finished
worldwide products. According to research by Ando (2011), the region was able
to recover quickly from the financial difficulties of the recession due to its
interconnected business activity. As wealth increases in the area, so will the
consumption and needs of the local population.
Companies would be wise to target the growing wealth of the area to sell
products and services.
Direct foreign
investment has increased the distinct East Asian industries of general machinery, electric
machinery, transport equipment, and precision machinery. These well developed
countries that dominated the machinery trade have now been replaced by the
growing machinery trades of East Asia. Its dominance is tied to its
exportability of products and interconnected manufacturers.
The
advantages of this region rely on interconnected blocks of manufacturing
ability that allow interconnectivity, communication, coordination, and effort
in production. The costs that would eat up profits in disconnected blocks are
lessened when regional hubs are developed. Each industry grows and develops off
the others thereby creating synergy in regional effort.
The U.S.
and Europe are important trading partners for East Asia products but their
significance is declining as Asian countries increase their consumption of
imported products. This means that as a global international trade network Asia
countries are coming into a mature market and are beginning to be significant trade
sources of their own. Less reliance on European and U.S. market exportation
means more varying influence on product customers and final design.
After the recession,
this area of the world has largely recovered while many other still lag behind.
The recovery was based on dense industry similarities in the area with global
network distribution. This should act as
a lesson for regions and leaders that desire to develop their own industries
that can recover quickly from economic fluctuations. At present these Asian
countries are focused on infrastructure to foster the growth of future
industries.
Development Tips:
-Develop
economic hubs of similar industries that create transactional savings in their
economic vines.
-Encourage
foreign trade and network lines that span to multiple areas where wealth is
increasing.
-Develop
economic hubs that foster innovation and development of products.
-Encourage
human capital development in the region and culture that sustains progressive
values.
-Maintain
and develop infrastructural improvements that cultivate further growth and
distribution.
Ando, M. (2010).
Machinery trade in east asia and global financial crisis. Journal of Korean Economy, 11 (2).
