Companies are very confident about their future prospects in Southeast Asia as economic integration looms.
The ASEAN (the Association of Southeast Asian Nations) Economic Community would create the conditions for the free movement of goods, services, investment and skilled labor.
While it is undoubtedly an ambitious project, the benefits of the scheme will be considerable to both the countries and businesses looking to trade in these nations.
AEC offers businesses chance to grow
It is expected to come into force by the end of 2015 and a study by the Boston Consulting Group has found 80 per cent of organizations view the ASEAN Economic Community (AEC) as a real business opportunity.
Moreover, around half think they will have a strong presence in at least five ASEAN nations in five years' time, compared to only one-quarter of firms now, underlining just how much progress they are expecting to make in this part of the world.
Indeed, the research shows that both businesses already established in the area and those who are new to Asia are preparing to capture the opportunities that will be coming their way thanks to the acceleration in growth in their industries.
"Companies are not waiting for further action from governments, which have already implemented most of the measures needed to promote integration," said Vincent Chin, a BCG senior partner and the head of the firm's Southeast Asian operations.
"Through investments and business activities, the private sector is already working to bind the region together."
The rise of ASEAN
ASEAN is becoming an increasingly important player on the world stage. Since the original six members – Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand – formed a trading bloc in 1992, the focus has always been on boosting interregional trade and investment.
The group now consists of ten nations – Laos, Vietnam, Cambodia and Myanmar (Burma) have since joined – and if their economies were combined into one, it would rank as the seventh largest in the world. It is also projected to pass Germany as the fifth largest by 2020.
As a result of the increased interest in the area, companies are expecting competition to become more fierce. For example, 67 per cent of respondents believe that integration will attract more companies from outside Southeast Asia, while 80 per cent expect tougher competition in their industries as a result of integration.
A direct result of this is that organizations will need to be at the top of their game if they want to continue to attract trade. An essential part of this will be top-quality localization services, as brands need to be able to connect with customers in all ten countries.
While English may well be the international language of business, consumers will favor companies that speak to them in their own tongue. Whether it is marketing material, sales collateral or technical documents, the simple fact is these companies are not going to be successful unless they enlist the help of translation experts.
Luckily for us – and all of the ambitious businesses out there – that's exactly what we are!
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