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Sunday, August 18, 2013

Economic Hubs in Asia Foster Economic Development




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 These well developed countries that dominated the machinery trade have now been replaced by the growing machinery trades of East Asia.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).
 

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