As I was looking through my research notes, came across this interesting piece of research many years ago about businesses in South East Asia during the early 2000s. This is a thread.
(1) Interestingly one group made up bulk of stock market wealth. Ethnic Chinese businessmen worth in listed stock markets in SEA early 2000s was estimated between 50-80%. This was during time of great gains for market, coming at time of the industralisation & privatisation boom
(2) There was a cultural orientation to sectors / jobs, that were a function of immigrants’ history i.e. being disallowed to undertake certain businesses / industries. Hence why you see certain groups dominating certain sectors, until today.
(3) Centralised govts across SEA typically under regulate competition & over regulate market access. This was a form of protection for existing local businessmen. It was a way to say ‘free competition for those here’ but restricting entrants from coming in.
(4) Companies with patronage have been beneficiaries rather than instigators of growth over the years. Productivity lags behind that of overall economies in which they operate. This is due to monopoly and lack of competition.
(5) In Thailand for example, productivity increases past 20 years have been highest in agriculture & manufacturing, where tycoons are largely not present. The nature of the industry made it very unappealing to many to venture into those industries.
(6) Smaller scale businesses - suppliers & principals contributed more to countries’ development, in a region that has had great export success. This is similar to Malaysia where SMEs are the backbone of the economy
(7) Industralisation & import substitution policies had poor results, but export manufacturing was successful, due to (then) low wage cost. Wages remained stagnant as reliance continued on labour intensive industries rather than moving up the value chain.
(8) Value added sectors within commodities (finished products) flourished as a result of self entreprenuership rather than govt policies. However this remains below potential across the region
(9) Exports especially in manufacturing is diminishing in the region, due to increased cost & traditionally low reliance on automation. As urban development takes place, wages would need to increase, catching companies unprepared both financially & technologically (Jakarta now).
(10) In SEA, common theme was that technology & project management were often outsourced to foreigners with no effort to institutionalise this / learn the knowledge. As a result, many have riden on ‘technologyless industralisation’. Big in hardware, short on software.
(11) Of course, not all businesses are stuck this way, some have pivoted successfully. But many remain in ‘old economy’ businesses. Nevertheless an interesting corelation to how history, culture, politics & economics work in tandem.

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