Can Asia Become the New Centre for Graphic Design? It’s Up to Us

The world came very close to its worst recession this century but thanks to largely vibrant and strong Asian economies, it narrowly averted that fate. What a change from a decade ago when the IMF had to bail out some of the Asian tigers and China and India were still emerging economies then. But unlike before, the Asian governments got their act together and moved as one responsible region. Before the ripples of crisis could reach our shores, governments from China to Singapore unleashed bold stimulus packages. The newly minted wealthy middle-class from Mumbai to Shanghai is also fueling some of the fastest growing demand for high-end luxury goods. No wonder the IMF is now being asked to recognise this reality by admitting China and India into its board. The winds of change have also hit the elite G8 club. President Hu’s sudden departure from the recent summit in Italy nearly paralyzed it. We are now finally witnessing what others have already predicted, the dawn of the Asian Century. But while economic strength or hard power has clearly shifted east, soft power which encompasses ideas, culture and design has remained firmly entrenched in the West. While it’s true that Asians are rising in wealth, they have continued to buy into Western concepts and way of living. Western brands of almost all categories except low-end or value-based continue to be preferred by Asians. And our consumers are not to be blamed because while our region has raced ahead in terms of purchasing power, our attraction power has remained untapped. Graphic design which is a strong visual representation of the presence of soft power is still very much undervalued in this part of the world. So what will it take to shift Asia from being the world’s producer to its centre of creative thinking?

For a long time, Asia’s economic rise has been largely linked to supporting the Western economic model and Western consumption. Therefore graphic design as an industry is not considered high priority in many Asian countries since many major brands still conceptualize their graphical direction in the US or Europe. With the exception of Japan, Korea and perhaps Hong Kong, graphic design is still seen as a commodity and not in terms of value-add. Because of this mindset, many designers take on non-creative work so as to put food on the table. As graphic design is virtually a low-entry barrier discipline, many designers start their own graphic design studios. But as competition increases, given the scarcity of good jobs, many designers resort to lower pricing and free-pitching. The luckier few who manage to serve those who understand the value of design are able to avoid this fate.

If this mindset persists then even if Asia were to race ahead, it will not be served by an equally creative industry that is confident enough to do the work which reflects the vibrant Asian identity. And given the fact that few clients appreciate the purpose of meaningful and good work, many design companies believe that this is almost utopian. So as an industry we are producing a generation of graphic designers who are still conditioned by Western benchmarks and constrained by resources to produce Asian-inspired work.

In another 10 to 15 years time, we will have a rich and large critical mass of affluent middle-class. The world is also increasingly looking towards Asia for ideas. The dazzling Olympic opening in Beijing last year and the fascination with Slumdog Millionaire shows there is a viable market for Asian creativity. But to fill up this vacuum, we need content, creative stars in order to influence the market and see the value of Asian graphic design.

So we need good work to show this and this is why I applaud the efforts of the team who put this book together. Many works featured within this Asia Pacific Design shows what the world can expect from a confident Asia. I am optimistic despite the challenges; pockets of designers are doing their part to inspire the world. The works featured here also show an encouraging trend that clients are beginning to embrace the notion of an Asian identity. But more can be done.

Perhaps it’s time to start a pan Asian graphic design fraternity. Currently design associations are nation-based, maybe it’s time for an Asian body to promote graphic design. Publications like Asia Pacific are extremely important because it helps us discover the richness of ideas that exist among us. If we choose to work together, much more can be achieved. Perhaps this fraternity could be a partnership between design firms and publishers. In this way we have a guaranteed channel to promote good design. We should also have a pan-Asian graphic design index to track the progress of the industry across the continent. If we want others to believe in our work then we have to start now. We need to change mindsets and help shape a more confident Asia. Because that is ultimately the mission of designers, it is a profession in which its work is able to influence societal norms. As many young designers enter the market, hopefully They will find more peers proud of their Asian heritage and 10 years from now, hopefully our vision for graphic design will match up to our economic ambitions. This is a good start and now it’s up to us to continue its inspiration.

Developing New Overseas Channels For Your Export Business? – A Project Based Approach!

Has your business revenue and growth rate reached a plateau in the USA and/or Europe? Is organic growth simply not going to take your company to the size that your investors need it to be? Many companies face this challenge but do not have the financial wherewithal to grow by merger and acquisition. The challenge is to move into new and relatively untapped markets, these are very often found outside the boundaries of the home market and the need to look overseas is glaringly obvious. Yet it is not so simple as it may first sound! You might know which of your products you want to export but do you know which country to start with, is it Japan or Korea or China or India or even smaller countries such as Singapore or Taiwan or Australia and it simply is not practical to cover them all. This is without even asking questions such as what mods will need to be done to the product and packaging, what export terms do we use, how will we get paid, what taxes are imposed, what transfer pricing will be required, what warranties will be obligatory, will we need local staff etc. etc. etc.

Then there is the question “who can we get to handle this?” Joe always takes his vacation in someplace like Bangkok or Beijing so he is probably a good candidate! The bottom line is would you take Joe, a Detroit automotive sales manager and ask him to go and close business in Korea or take Pete, a London IT sales manager and send him to set up distributors in China? Of course you wouldn’t but the reality is that this is exactly what companies are doing – they are expecting their good people to manage setting up overseas business in the same manner as if it were their home based business. Believe me it is a world apart and I don’t just mean geographically – it’s culturally and business practice wise so varied from country to country and that doesn’t even touch on the language issues.

So many companies have failed miserably when trying to set up their international business channels. A company would never think twice about creating a new production line without a project manager and a well structured project plan, even firms fitting new kitchens these days offer a project manager so why would you approach such a critical process of growing your global business on an ad-hoc basis? Would you appoint an IT project manager to manage the build of a water treatment plant or a project manager of a washing machine plant to build aerospace engines – No!  So why do so many companies believe they can succeed in international markets by using an American or European centric resource? This is an international sales and marketing task where the markets are very different than that of the American or European so doesn’t it make sense to use an appropriate resource? Think of this venture like a project and think of your International manager like you would a project manager – they have a difficult task to accomplish and need to approach it professionally, you need a lead person who has the skills and experience of not just managing overseas agents but a hunter that has worked the territories before, knows the trail and can sniff out the right targets. He needs to understand how overseas channel partners think, what drives them and turns them on and to be able to empathize with them.

I remember when I worked for a data communications company, we were doing quite well throughout the APAC region via our existing agents and distribution channels but we needed an order of magnitude increase to grow the company to the next level. I approached the International VP and told him that I needed to remove myself from the international channel management role and focus on a new growth strategy. I planned, managed and focused my effort and channeled all my energies into striking up an OEM deal with one of Japan’s largest companies. Because of the strategic and planned approach and with good tactical positioning I was able to secure the deal which yielded an enormous increase to our Far East revenues and ultimately had a huge impact on the share price of the company as a whole. Of course it left me with another problem and that was I had to source manufacturing for this scale of volume in Asia and to negotiate with the Taiwanese to get this up to speed asap, but it was a nice problem to have. The message here is that I managed the task like a project, I had the connections in Japan, knew how to deal with the Japanese from my past channel role and did not try to shoehorn it in with my day to day job of managing the existing partners.

Yet it is not only the key individual that makes it a success. Like all successful projects they start with capturing the requirements and creating a requirements specification, defining a solution, building a solution, trials and tests and rollout. It  has a timeline, budget and cash flow. The foregoing tasks can be translated into Discovery – in brief the establishing of the products or services that can be effectively and profitably introduced to the overseas market, a readiness to export survey, reviewing agreements and having a market plan, what costs will be required, will technical support be needed out in territory and how much and for how long etc. Research – What channel structure is best suited to your portfolio, which locations are lucrative and compatible, market size and acceptability, how do your competitors operate, attending trade fairs and exhibitions to glean local knowledge and so on. Engage – striking up discussions, working contacts, meeting players, evaluating strengths and weaknesses, what investment they will make, selecting the right channel, have them test trial your products, come up with a local rollout marketing plan etc. Administer – monitor the whole process with cross checks to the original requirement and refinements. Manage – ensure the process is running to time and budget, communicate with other internal stakeholders, make sure the introduction of your product to the local market is going as planned. Only then will you Succeed. Think of this as your international DREAMS model approach and conduct it like you would any other project.

You might have read all this and be thinking yeah it all makes sense but our organization simply doesn’t have the manpower to spare to focus in this depth and detail, we will just have to use our existing resource that manages the region. Well that’s your decision but you might want to look at external resources that specialize in this sort of business, have done it successfully many times before and can work alongside your existing team without you losing control. There are pros out there that will act as an extension of yours, even carry your business cards and act on your behalf and when the job is done they will hand off to your existing management team. You are now thinking OK but that will cost me lots of extra money over and above my current budget, well there may be a small extra charge but there are those that will take the bulk of their reward out of the initial sales that are delivered from the new channels and this makes it a win / win business proposition. If you do look externally make sure you look at those that can provide you with an end to end service and approach it in a methodical and structured manner. Look at Expand Internationally as a starter.

The Switzerland of Asia Shines

In many respects, Singapore is the Switzerland of Asia.

Begun in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister’s father, Mr. Lee Kuan Yew. While it is only 1/5 the size of Rhode Island and three times the size of Washington D.C., it is perhaps the most strategically important global trading, finance and service nexus in Asia.

Here is why you should consider investing in Singapore.

While Hong Kong and Shanghai will argue, Singapore is the busiest port in Asia situated next to the vital trading channel, the Straits of Malacca.

Unlike South Korea and Taiwan, which are heavily dependent on the cyclical electronics industry, Singapore has a well-diversified economy. 70% of its GDP is attributable to finance and services.

Singapore’s accounting rules and regulations are amongst the most conservative in the world. For example, its rules on inventory accounting and the expensing of stock options are more conservative than those in the United States.

Trade Surplus

Despite only 1.6% of its land being suitable for agricultural activities and having to import almost everything including water, Singapore manages to have a trade surplus.

Singapore has a balanced budget, a stable currency and still manages to allocate 5% of GDP for defense.

It represents a multi-ethnic society with 77% Chinese, 14% Malay and 8% Indian.

Singapore has a parliamentary form of government, an English common law judiciary system and is corruption and drug free. Slowly but surely, a freer political climate is developing with a Speaker’s Corner instituted in 2000 and the ability to express one’s views freely anywhere with the exception of the sensitive topics of race and religion

Singapore’s educational performance is legendary. The fact that it has twice as many Internet users as television sets is telling.

Singapore’s New Resorts

Singapore is also changing with the times. To generate more investment, tax revenue, and add a bit of sparkle, Singapore recently approved the development of two large casino resorts. It is part of a strategy to reduce the country’s dependence on manufacturing and to position itself as a livelier tourism destination. Of course, there will be restrictions. Singaporeans will have to pay a $60 entry fee and the gambling areas will be restricted to just 5% of the resort. According to projections, the resorts will lead to $4 billion in investments, $3.5 billion in annual revenues, 35,000 jobs and $350 million per year in taxes and fees.

Singapore has also made great strides in patching up misunderstandings with its neighbor to the north, Malaysia, from whom it split in 1965. Tax issues, water supply agreements and transportation arrangements are all moving much more smoothly.

Singapore is adept at holding on to its manufacturing base even as several large semiconductor manufacturers such as National Semiconductor announced plans to move plants to China and Malaysia. For thirty years, Singapore has relied on electronics as the backbone of its manufacturing sector but is making the transition to a more service and R&D economy. Electronics is about 40% of manufacturing output but accounts for only 5% of employment. Surprisingly, some firms are moving manufacturing centers from China to Singapore due to its infrastructure, logistics and laws protecting intellectual property. Exxon Mobil, Shell and Sumitomo are expanding petrochemical facilities and Singapore added 27,000 manufacturing jobs last year by moving up the food chain.

After 8.4% GDP growth in 2004 and a weak start early this year, Singapore’s economy posted 12% plus growth in the second quarter and should be a solid performer over the next few years. Continued strong global demand for transportation, communications and logistics services, increasing IT spending, rising consumer spending and property prices and expanded tourism all point to continued growth.

An easy and smart way to invest in Singapore is through the Singapore iShare (EWS) which tracks the Singapore Straits index. It is up 26% over the past year and up 9.4% year to date. Its largest positions are in Singapore Telecom, United Overseas Bank and DBS Bank. Even better, it is tax efficient and has an annual expense ratio of only 0.59%. Trading at 14 times projected earnings, the Singapore market is still attractive. By comparison, the Switzerland market and iShare (EWL) is trading at 18 times earnings.

The epitome of quality and increasingly creative, Singapore is a great core holding for any global portfolio.

Carl Delfeld is head of the global advisory firm Chartwell Partners and editor of the Chartwell Advisor and the Asia Investor Intelligence newsletters. He served on the executive board of the Asian Development Bank and is the author of The New Global Investor (iUniverse:2005). For more information go to http://www.chartwelladvisor.com or call 877-221-1496