Bracing for the ASEAN economic integration

Map Insights
Niceto S. Poblador

Posted on September 24, 2013

MANY Filipino business leaders and corporate managers seem to be visibly on edge about the impending implementation of the economic integration of ASEAN. No matter how one looks at it, the launch of the ASEAN Economic Community in 2015 will truly be an event of historical significance, one which will drastically alter the way we do business and manage our economic and corporate affairs.

What many businessmen fear most of all is that the crumbling of protective and regulatory walls that used to insulate them from their rivals elsewhere in the region will, in one fell swoop, expose them to unfettered competition which they fear they are ill-prepared to deal with.

The forthcoming integration of the economies in the region into the ASEAN Economic Community (AEC) was the subject of the recently concluded 11th MAP International CEO Conference. While the six speakers at this forum touched on wide-ranging topics, there was one dominant message that was common to all the presentations: While the formal creation of the AEC poses great challenges and difficulties and create new uncertainties for business organizations and countries in the region, it also opens up great opportunities for accelerated and sustained growth and profitability for all. AEC seeks to achieve the goal of economic prosperity for the region by creating a single market and production base, by enhancing the region’s competitive stance vis-a-vis the rest of the world, and by promoting equitable economic growth within the region.

On balance, we believe that the potential benefits from AEC far outweigh the perceived problems and difficulties associated with it. In responding to the situation, business organizations should therefore focus their attention and devote their energies on the advantages that integration offers, rather than sulk over the problems and uncertainties that lie ahead.

In doing business with our counterparts in the other countries in the region and beyond, our main concern should be how to develop creative and innovative products and services to cater to the increasingly demanding needs of today’s consumers. Textbooks on strategic management tell us that to establish our competitive edge, we must develop the resources that enable us to produce those glitzy products, and the competencies to advantageously position ourselves in the market to gain customer loyalty.

In today’s complex and fast-paced knowledge-driven world, value creation is the major aspect of strategy, and gaining market share is only of secondary importance. (Come up with a good product, and the customer will come to you -- it’s as simple as that!) Moreover, value creation through product innovation and development no longer takes place within the narrow confines of a business enterprise but through extensive collaboration with other organizations, including those with whom we are potentially in competition. This goes to show that in today’s world of business, collaboration is the name of the game! (The term popularly used to describe this strategy is “coopetition,” short for “cooperative competition.”)

In today’s economy, knowledge has become the most important economic resource, one moreover which is most easily transferable across corporate and national boundaries. It is the great equalizer of business opportunities, one that evens out the playing field. It is also resource that figures most prominently in collaborative strategies.

It is our belief that thriving in the emerging regional economic community requires business strategies intended to develop the firm’s human capital, which includes not only knowledge and human skills, but also an organizational culture that nourishes mutual trust and collaboration -- intangible assets that are the main drivers of business success in the global economy.

(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is a former Professor of Management in UP Mindanao. Feedback at map@globelines.com.ph and nspoblador@yahoo.com. For previous articles, visit map.org.ph.)