资源描述
1 The Age of Hypercomplexity | Asia Pacific Business and Legal Macrotrends THE AGE OF HYPERCOMPLEXITYAsia Pacific Business and Legal Macrotrends2 The Age of Hypercomplexity | Asia Pacific Business and Legal Macrotrends Welcome to the Age of HypercomplexityAt the same time, there are both public and private forces in Asia Pacific, the US, Europe and elsewhere that are exploiting the clear failings and inequalities of globalization to gain and consolidate power, producing new global divisions in the process.On the regulatory front, law makers in the Asia Pacific region and globally continue to grapple with both the expected and unintended consequences of rapid globalization; the wave of new regulation that followed the financial crisis has now crashed onto the concrete seawall of enforcement. This is starkly borne out in this research, in which regulation and compliance has shot up to the top of the list of business challenges in every jurisdiction we surveyed.Meanwhile, the US and China are embroiled in an unprecedented game of macroeconomic chicken, and Brexit is clearly starting to impact long term investment decision making by the UKs key trading partners in this region.These key events, plus many more that dont necessarily command headlines, are creating a tsunami of complexity. In fact, two thirds (66%) of the 600 business leaders we surveyed in Asia Pacific see doing business becoming more or far more challenging in the current market, up from 57% two years ago. Meanwhile, only five percent of business leaders actually see these macro trends as net beneficial for their companies, down from 11% in 2017.Our world has never been more connected by technology, manufacturing, trade, supply chains, tourism and popular culture and this unprecedented globalization has created enormous benefits for much of the worlds population as a result.Key findingsIn this report, the latest in our Simplifying Business in a Complex World series, we provide a view of how these mega trends are impacting doing business in Asia Pacific, arguably the most complex region of a hypercomplex world. We look at how businesses in China, Japan, Australia, Singapore, Malaysia and India are anticipating key challenges and looking for new opportunities, and where they are set to invest as a result. The most interesting contradiction at the heart of this report is that even with this intensifying complexity, massive compliance worries and unprecedented peacetime geopolitical turbulence weighing down companies like never before, these same business leaders appear remarkably bullish about their overall investment intentions. In fact, 58% of executives across Asia Pacific plan to increase domestic investment levels by more than 10% in the next two years, while an even higher number (61%), plan to increase international investment by at least 10%. Even more are positive on their cross-border M IP protection; employment and environmental regulations; a patchwork of competition laws across the region; and the necessity to address and conform to bribery and corruption best practices. These areas have grown markedly in importance since 2017, according to commentary from executives, and are likely to continue rising in consequence well beyond 2019; something mirrored by the rising boardroom status of General Counsel, Chief Risk Officers and Heads of Compliance. Complying with international laws is a top challenge. Some governments in key markets have been building stronger operational frameworks to favour their domestic businesses, which makes it difficult for us to penetrate these markets, even in just establishing partnerships with local organizations.Director of Strategy and Marketing at a Malaysia-based telecom companyGiven the increase in and convergence of these issues, respondents also highlighted the financial impact of this area on their organizations. Indeed, spending on compliance and regulatory matters is now far and away the greatest cost concern for Asia Pacific-based execs, with a full 73% of respondents singling it out as the number one driver of cost increases in their businesspliance and Regulation: Under the Microscope5Even in the midst of the US-China trade war and the impact a protracted dispute creates for regional trade partners, trade disputes and uncertainty ranked in the lower half of immediate concerns and complexities. This could be because respondents feel the US-China trade spat will fizzle out rather than continue to escalate. However, as the previous two years have shown, the level of unpredictability in geopolitics, particularly those emanating from the US, has meant companies must maintain a much higher degree of vigilance in how they operate and with whom they trade and conduct business than in previous years. Indeed, the majority of respondents (82%) across the Asia Pacific region are in some way making changes to their existing operations in response to the trade war. Of this, 49% say these changes will be major and a further 12% say it will result in a complete transformation of production and supply chains. That alone equates to enormous changes for businesses in this region. Unsurprisingly, respondents based in Hong Kong and China will make the most deep-rooted changes. In China, a full 93% of executives are making changes to their business, including 18% now focused on a complete transformation of their production and supply chains. What is surprising is how much Japan is being caught in the middle of the trade conflict. Japanese respondents are feeling the pain in equal measure to their Hong Kong/China-based counterparts. In total, 94% are reconsidering their existing production and supply chains. Shedding light on these sentiments, the Chief Risk and Compliance Officer at a Japanese consumer goods company says, the “trade war is causing delays in our supply chain that is affecting the quality of our products, and we are incurring additional losses in our logistics.” Others noted that in order to remain neutral in the feud, they are exploring alternative, emerging markets for their goods and services. Enter South East Asia.Please rank the biggest macroeconomic challenges in terms of your business?Which areas will provide the greatest cost increases in your industry over the next two years (select up to three):Inadequate infrastructurePolitical risksCybersecurityEnvironmental threats/pressuresTrade disputes and trade deal uncertaintyThe need to innovate via new tech/AI/big data (internally driven)Disruption via technology (externally driven)Cost pressure/shrinking marginsEconomic uncertaintyCompliance/regulatory scrutiny6.86.76.26.06.05.75.64.44.13.6Wages and HR costsEmployment issuesEthical complianceRestructuring costsCyber security and data protectionTax burdenEnergy and utilities Materials and manufacturing completion of thorough due diligence to reduce the risk of unpleasant surprises down the track; and the ability to extend head office controls and methodology to the foreign target business.Baker McKenzie Insight - Ben McLaughlin, Sydney10 The Age of Hypercomplexity | Asia Pacific Business and Legal Macrotrends making. Gaining market share (20%) would be the main reason behind cross-border M&A, as companies become more established in the markets where they already have a foothold. Another 19% said accessing new markets would drive deal making, followed by 17% who mentioned acquiring new technology and expertise as they buy rather than build (via R&D) innovation to maintain a competitive edge.In line with intentions to increase international spending, 88% of respondents are also showing interest in cross-border M&A. Globally, M&A has been on an uptrend in recent years, with various Asian buyer groups led by Japan, China and increasingly India contributing to deal volumes as they explore opportunities beyond their own borders. As Asian businesses continue to go global, respondents highlight several drivers for this deal FIGURE 8. Compared with the previous two years, how interested will your organisation be in cross-border investments/listings/acquisitions in the next two years?Decreased interestThe same levels of interestSomewhat more interestedFar more interestedAsia PacificSingaporeMalaysiaJapanIndiaHong KongChinaAustralia39% 34% 27%50% 40% 10%52% 32% 14% 2%57% 32% 10% 1%88% 8% 4%46% 44% 10%56% 40% 4%53% 35% 12%What would be your number one reason for making acquisitions?DiversifyReduce production/labor costsAccess to raw materials or natural resourcesAcquire intellectual propertyAcquire new technology and expertiseAccess new marketsGain market share20%19%17%13%12%7%4%Compared with the previous two years, how interested will your organization be in cross-border investments/listings/acquisitions in the next two years?However, a word of caution. In the recent Global Transaction Forecast report by Baker McKenzie and Oxford Economics, 2019 is predicted to be the peak of the deal making cycle in Asia Pacific, with the second half of the year seeing a drop off, and a more pronounced slowdown in 2020.Cross-Border M&A
展开阅读全文