Asia drives 60% of global growth, but the region’s CEOs can’t escape geopolitics. Here’s how they can stay competitive

Between tariffs, trade disputes, and the closure and reopening of the Strait of Hormuz, “disruption” has moved from being a buzzword to a permanent fixture in the CEO lexicon.

Asia is one of the world’s most dynamic regions in the world. Its demographic scale, industrial depth, and technological capabilities puts it at the centre of future growth. According to the IMF, it drives 60% of global growth.

But even as trade continues to flourish, CEOs can’t escape geopolitics. Asian businesses are navigating the simultaneous effects of fuel price shocks, power shortages, and grid instability. Fragmentation in the form of armed conflicts, tariff disputes and the dissolution of trade blocs is at an all-time high. Geopolitical competition is reshaping trade and investment decisions, as governments try to control key inputs and technologies.

Therefore, CEOs can’t avoid disruption either. Instead, they need to figure out how to excel within it. Corporate executives need to assume that volatility will persist, rather than fade away—and use it to redesign their organizations.

So, how should APAC CEOs stay competitive in a fragmented world?

Specialize in more than one market

Asia is the world’s manufacturing backbone, thanks to dense supplier ecosystems, cost advantages, and deep networks of talent. Asian firms can iterate products, respond to signals, and scale production at a pace unmatched by Western firms.

But many companies in the region are optimized to just one market, because historically this is how they have succeeded: Operations finely tuned to local regulations, supply chains and customer bases have given many an edge. That same efficient localization impacts flexibility, however, and becomes costly when exogenous shocks hit businesses.

To sustain........

© Fortune