by Michael Enright, Northeastern University, Founder and Member Board of Advisors, TCI Network

1. Professor Michael J. Enright
Enright, Scott & Associates
michaelenright@enrightscott.com
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 1
Decoding the new dynamics
of competitiveness in Asia

2. Differences between Asia and the Rest of the World
• Overall
– Size and distances
– Populations, Urban scale
– Range of cultures
– Range of development levels
– Range of institutional capacity
– Range of infrastructure levels, digital and
otherwise
– Range of government approaches towards
the economy
– Generally more collectivist than other parts
of the world, but this does not necessarily
mean more “democratic”
• Clusters
– Horizontal as well as vertical and complex
clusters
– Disintegrated supply chains across
economies
– Cluster initiatives are often used as a top-
down development tool by government
– Some identification and acceleration of
existing clusters
– Critical role of foreign investment in clusters
in many Asian countries
– Critical roles of trading companies and
sourcing operations to coordinate across
economies
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 2

3. Similarities Between Asia and the Rest of the World
Successful Cluster Initiatives (according to MJE)
• Address one of four specific market failures
– Impacted information
– Managerial myopia
– Underprovision of public goods and overprovision of public “bads”
– Coordination gaps
• Address issues that are
– Key stumbling blocks or obstacles to increased economic activity
– Considered important to solve by the major economic actors
– Amenable to collective solutions
• Use approaches that
– Are consistent with local power structures and interactions
– Are realistic given the current state of the local economy
– Are consistent with the specific clusters addressed
– Provide sufficient information / knowledge sharing
– Tailored to local circumstances
– Combine local knowledge with local or external help or support can
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 3

4. GNI per capita, USD, 2019
0
10.000
20.000
30.000
40.000
50.000
60.000
Singapore
Hong
Kong
Japan
Korea,
Rep.
Brunei
World
Malaysia
China
Turkey
Maldives
Kazakhstan
Thailand
Iraq
Armenia
Azerbaijan
Indonesia
Sri
Lanka
Philippines
Mongolia
Bhutan
Papua
NG
Vietnam
India
Timor-Leste
Bangladesh
Uzbekistan
Cambodia
Pakistan
Myanmar
Kyrgyz
Rep
Nepal
Tajikistan
Afghanistan
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 4

5. Digital Readiness Overall Score, 2019
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 5
0
5
10
15
20
25
Singapore
South
Korea
Japan
Malaysia
Georgia
Kazakhstan
China
Thailand
Turkey
Azerbaijan
Armenia
Vietnam
Indonesia
Moldova
Uzbekistan
Philippines
Iran
Kyrgyzstan
Mongolia
Sri
Lanka
India
Cambodia
Nepal
Tajikistan
Laos
Bangladesh
Myanmar
Iraq
Pakistan
Timor-Leste
Afghanistan
Asia has everything from install initial digital infrastructure to
world-class digital, smart city, and related programs

6. CO2, kg per USD of GDP
0
0,5
1
1,5
2
2,5 Mongolia
Turkmenistan
Laos
Kyrgyz
Rep
Kazakhstan
Uzbekistan
Iran
Vietnam
China
India
Pakistan
Iraq
Malaysia
Azerbaijan
Tajikistan
Moldova
Cambodia
Brunei
Indonesia
Bangladesh
Nepal
Korea,
Rep.
Armenia
Timor-Leste
Afghanistan
Philippines
Maldives
Papua
NG
Myanmar
Turkey
Sri
Lanka
Barbados
Japan
Hong
Kong
Singapore
Macao
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 6

7. Changes Requiring Dynamic Responses
• Covid
• China’s rise and initiatives
• International trade / economic tensions
• RCEP and inter-regional trade
• Digitalization
• The green agenda
• Increasing levels of development in several countries
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 7

8. Covid
• The disease
– Human toll
– Potential reservoirs
– Economic disruption
– Strategies to fight Covid
• Economic / business impact
– Importance of travel
– Facilities open or closed
– Impact of disease-fighting strategies
– Revitalization potential / plans
• Role of clusters or cluster organizations
– Approaches more industry-based
– Limited reliance on a cluster approach to the pandemic
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 8

9. Covid Update, Selected Asian Countries
Ave daily new cases
Policy Stringency
(0-100)
Vaccination 25-Jun
(%)
May
Week ending
11-Jun 18-Jun 25-Jun May 25-Jun 1 shot Fully
Japan 4,965 2,000 1,512 1,472 49.1 49.1 20.2 9.2
China 15 25 24 22 68.6 78.2 43.2 15.5
Hong Kong 2 3 1 4 71.3 71.3 27.9 18.1
Taiwan 238 293 182 99 48.0 68.5 7.9 0.2
South Korea 586 547 471 534 50.8 50.0 29.7 8.8
Indonesia 4,946 7,202 9,892 15,657 69.0 69.0 9.3 4.7
Malaysia 5,279 6,184 5,542 5,351 75.1 64.8 15.7 6.1
Philippines 6,221 6,430 6,561 5,540 68.8 71.8 6.1 2.1
Singapore 29 12 20 19 54.9 58.3 50.8 35.2
Thailand 3,053 2,550 2,993 3,644 59.3 53.7 9.2 3.7
Vietnam 145 241 351 290 73.7 77.3 3.0 0.2
India 290,648 94,897 66,342 51,371 79.5 81.9 18.4 3.9
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 9

10. China’s Rise and Initiatives
• Dependence
– On Chinese markets
– On Chinese sources of supply
– On Chinese investment
• Belt and Road Initiative
– 140 countries have signed BRI MOUs
– Creation of new funding mechanisms
• Made in China 2025
– Focuses on 10 key technologies
– China to limit foreign share in domestic mkt, then in international market
• Digital Silk Road
– Connect BRI countries
– Use Chinese hardware and software
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 10

11. Trade Dependence on China, Selected Countries
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mongolia
Hong…
Myanmar
Korea
Laos
Japan
Uzbekis…
Viet
Nam
Macao
Indonesia
Malaysia
Grand…
Philippi…
Singapore
Thailand
Kazakh…
Iran
Pakistan
Cambodia
India
Armenia
Brunei
Kyrgyzs…
Afghani…
Turkey
Azerbaij…
Maldives
Exports Imports
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 11

12. Belt and Road Initiative, Corridors and Participation
1. New Eurasia Land Bridge
2. China-Mongolia-Russia
3. China-Central Asia-West Asia
4. China-Indochina Peninsula
5. China-Pakistan
6. Bangladesh-China-India-Myanmar
7. North Sea Route
40
34
25
17
18
6
140 Countries with BRI MOUs,
January 2021
Sub-Saharan Africa Europe, Central Asia
East Asia, Pacific Middle East, North Africa
Latin America, Caribbean Southeast Asia
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 12

13. Trade Dependence on US, Selected Countries
0%
5%
10%
15%
20%
25%
30%
Cambodia
Viet
Nam
Japan
Pakistan
India
Philippi…
Grand…
Korea
Thailand
Indonesia
Malaysia
Maldives
Hong…
Singapore
Turkey
Myanmar
Armenia
Azerbaij…
Kazakh…
Brunei
Laos
Macao
Afghani…
Mongolia
Kyrgyzs…
Iran
Uzbekis…
Exports Imports
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 13

14. RCEP
• Regional Comprehensive Economic Partnership (free trade agreement)
• Signatories: Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos,
Malaysia, Myanmar, New Zealand, Philippines, Singapore, Thailand, Vietnam
• Ratifiers: China, Japan, Singapore, Thailand
• 15 signatories: 30% of the world's population (2.2 billion people), 30% of global GDP ($26.2
trillion) as of 2020, largest trade bloc in the world
• To take effect 60 days after it has been ratified by at least six ASEAN and three non-ASEAN
signatories
• ADB estimates Japan and Korea would accrue gains amounting to 1% of their GDP by 2030;
China 0.7%; Malaysia, Thailand, Vietnam and Brunei 0.5% of GDP or higher
• Potentially particularly useful for international supply chains
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 14

15. New Dynamics of Competitiveness in Asia
• Covid
– Getting the disease under control
– Preventing fall into abject poverty
– Economic re-opening / recovery strategy
• Reconfiguring supply chains
– Cost pressures in China
– Focus on resilience
– Belt and Road
– Trade tensions
– RCEP
– China +1, +2
• Two-edges of China’s initiatives
– Low-cost finance for infrastructure
– Build trade with China
– Dependent on Chinese sourcing
– Subject to pressure
• Be friendly with China and West?
– Have to try
– Different economies depend on China / the West
– Need for FDI with accompanying expertise, markets
– What combination of political, economic, other
forces to prioritize
• Digital divide / transformation
– Basic infrastructure, or advanced transformation
– Maintenance and continuity
• Green agenda
– Natural resource industries
– Green infrastructure
– Demand side not so much a concern locally with a
few exceptions
– Local responses to local issues
– Local responses to global issues and external
pressures
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 15

16. Thank you
michaelenright@enrightscott.com
TCI-2021-07-02 © Copyright Michael J Enright, ESA, 2021. 16