Two weeks ago, we started to explore why Asia —and other parts of the world— is likely to see a shift from a managerial to an entrepreneurial society in the coming two decades. We arrived at this insight using a futures forecasting technique named Causal Layered Analysis (CLA) that was created by the futurist Sohail Inayatullah.

In the first part of this article, we investigated this forecasted future change by taking stock of Asian business as it is today. Thereby, we used the four layers of a Causal Layered Analysis that resemble an iceberg:

• On the first level, the litany (or tip of the iceberg) noted that in 2015, Asian business is dominated by multinational and large Asian Corporations (the “big fish”).
• The systemic factors on the second level (the part of the iceberg right below the waterline) explain this domination: Today, Asia is still mostly driven by asset-based, “old economy” industries that require high capital investments, thus favoring big corporations with economies of scale and political influence.
• On the third level, we looked at the worldviews of different stakeholders, such as: the “big fish” (“We’re no. 1, but things are getting more difficult”), Asian entrepreneurs (“We can’t compete with the “big fish”, as it’s not a level playing field”), Asian consumers (“I am loyal to well-known brands”), Asian governments (“We favor large corps with our economic policies”) and the Asian financial system (“We lend to large corps, not to risky entrepreneurial ventures or small- and medium-sized enterprises (SME)”).
• On the fourth and final layer (“the bottom of the iceberg”), we used a metaphor to sum up the situation in a visual, intuitive narrative (“The big fish rule the sea, but they start feeling a tidal wave coming”).

How do the litany, the systemic factors, the worldviews and the metaphor change in a comparative second Causal Layered Analysis that aims to forecast the future of Asian business in 2035?

Asian Business 2035: A Causal Layered Analysis on the new entrepreneurial society

In 2035, Asian economies are rejuvenated by an entrepreneurial network of millions of new ventures that we may call “Asian Business Me” that have risen alongside traditional large Asian corporations (“Asian Business Inc.”):

• The new litany: Economic growth in Asia is powered by a huge number of entrepreneurial ventures and creative SME, while many of the large corporations stagnate or are even in decline.
• The new systemic factors: In 2035, the “new Asian economies” are largely driven by asset-extensive industries with comparatively low capital needs that ride on mega-trends such as globalization, digitalization and virtualization of business. These drivers as well as new technologies (such as 3D printing or virtual reality) have encouraged the rise of networks as preferred, more cost-effective organizational method, replacing the traditional organizational hierarchy of the industrial age. Like other parts of the world, Asian businesses will see a shift from a managerial to an entrepreneurial society comprising millions of new ventures and SME. Asian Governments have shifted to more SME-friendly policies and support mechanisms that encourage the foundation of new ventures. This is because these ventures create new employment opportunities that are needed to mitigate the negative social effects of massive job cuts by —and partial extinction of— the “big fish” (caused by automation and robotization of knowledge work). Millennials and disillusioned GenY won’t be satisfied with working in a job only for money, but prefer to work on business projects and social causes that they regard as challenging, meaningful and rewarding.
• The new worldviews: How may the worldviews of key stakeholders have changed in 2035?
• The big fish may think along these lines: “We need to renovate our business and find new market spaces to stop our declining revenues and profits. The most creative, agile new ventures and top SME have grown into serious competitors who can beat any of our business units that isn’t able to cope with disruptive change. One way to ensure our survival is to acquire successful start-ups that threaten one of our sluggish, traditional business units. This rids us of a serious competitor and gives us a creative fresh blood infusion.”
• New ventures and SME may maintain the following worldviews: “Government policies don’t only favor the big fish anymore, but create more of a level playing field. Nowadays, we have a chance to outcompete an incumbent “big fish” in our chosen business niche provided we are faster, more creative and agile, and if we use more modern, cooperative business models. We have a purpose and not only make money, but make meaning. This allows us to attract top talent — and we’re able to pay competitive salaries thanks to new investment vehicles that make it easier for new ventures to get funded.”
• Asian government agencies may have reversed their worldviews: “Entrepreneurs and SMEs are good. They create new jobs, thus contributing to social harmony. We promote the set-up of new ventures. We have modern immigration and business regulations that attract the world’s top talents to the vibrant start-up ecosystem of our country. We promote free and open markets for everyone, but we still want to remain in charge of running the country.”
• Asian consumers may think along these lines in 2035: “I buy from everyone who gives me what I want. Brand loyalty? Sounds like my grandparents… New brands and ventures are cool — I support them provided they give me good value with a good cause.”
• How may the views of the Financial System have evolved? New ventures and SME now have more opportunities to get funded: The “new banks” (think of former tech start-ups like Apple, Google, Amazon, etc.) favor funding entrepreneurial ventures; traditional banks increasingly regard loans to the old-fashioned “big fish” as risky; finally, a network of affluent Asian millionaires is ready to invest in promising new start-ups as business angels.
• The new metaphor: “The Asian entrepreneurial coral reef” is a diverse ecosystem that favors small, agile and cooperative fish that are organized in self-supporting networks and —through a vast, interconnected network of diverse business niches— offer protection from the tidal waves of change that have already killed —and threatens the survival of— many of the “big fish”.

Conclusion: For some of you, the forecasted scenario may seem farfetched and unrealistic. But haven’t the first signs of the giant tidal waves of change already arrived? In 2015, who is the world’s largest accommodation provider? AirBnB offers 1.5 million listings in 34,000 cities in 190 countries worldwide with just 1,600 staff and without owning a single hotel room. Who is the world’s largest taxi company today? Uber provides its taxi services in over 300 cities in 58 countries with just 550 full-time employees and without owning any cars. In just 7 years after its foundation in 2008, AirBnB has risen to a market valuation of USD 28 bn, while Uber is even worth over USD 50 bn six years after its incorporation. Both companies achieved these quick successes thanks to the dynamic and disruptive power of the internet, real and virtual networks of the “sharing economy”, and of course their creative and disruptive business ideas and business models. With more disruptive technologies looming on the horizon, I am confident that by 2035, we will have witnessed a shift from a managerial to an entrepreneurial society — in Asia as much as in other parts of the world. So get ready for “Asian Business Me”.

© Dr. Detlef Reis 2015. This article was published in parallel in the Bangkok Post under the same title on 15 October 2015.