The shift of PR wealth to Asia
Here’s my latest column as the current Asia-Pacific contributor to The Holmes Report’s ThinkTank section:
Travelling in Europe the past few days, this Reuters headline caught my eye: “Asia surpasses Europe in millionaires and wealth” (based on a study published by client Merrill-Lynch).
It seems an apt milestone given that I have been delivering speeches on the theme of “the rise of Asia in the world of PR” and what European companies need to know about communicating in the region.
I think most people realize that the global economic order is shifting and that one day China will become the world’s largest economy. What’s less understood is how fast this is happening and the sheer scale that Asia is forecast to achieve during our lifetimes.
Citigroup recently projected that the Chinese economy will be bigger than each of America’s and the EU’s during the 2020s. By 2050, it will be much bigger than those combined, with about half (49%) of the world’s economy in Asia, up from 29% today. By then India will have the second largest GDP, the US in third place, followed by Indonesia and Brazil with individual European economies trailing far behind.
The PR industry will reflect this new economic order, with Asia commanding a much greater share of investment in communications services than ever before. By some estimates, the entire global PR consulting sector is worth $10 billion, but currently no PR firm bills even $100 million in Asia.
Two trends will change that soon enough:
First, the well known Western multinationals will boost their PR spending in Asia.
Today many of these are chronically under-investing in the region, with budgets flat and overly weighted towards mature Western markets. Many suffer from dated thinking about the fair market value of PR in the East as well as from chauvinisms concerning service quality rooted the stereotypes of another era. Still, for these companies, thriving in the future means more PR investment in Asia, the region that offers far greater growth potential than developed countries drowning in debt.
Second, the now one third (34% according to Forbes) of the world’s largest 2000 companies now based in Asia.
We’ve never heard of most of these emerging multinationals, and now they are starting to invest real money in global communications from an Asian platform.
That’s an important point, because PR campaigns in Asia have often been ‘hub and spoke’ efforts where decisions are made in Western capitals with regional headquarters city hubs administering implementation. Domestic PR efforts have tended towards localisation of globally supplied template approaches to PR.
Nowadays, with the face-to-face agency-client relationship based at the Asian headquarters, PR people in the East are gaining more opportunities than ever to devise and manage global PR campaigns. This is proving quite an adjustment for some in Western agency networks unaccustomed to following leadership direction from Beijing, Delhi, Seoul and indeed Tokyo. It’s also daunting for some people in senior positions who may have never run an international campaign from Asia before and who I’ve noticed may therefore suffer from a lack of confidence in leading their global charge from the East.
There is a long tradition of complaining about Western-centrism in Asia, with many derisive of those with ‘global’ titles who are thought to lack understanding of the Asian context. Sometimes these complaints seem valid but what we’re going to find now with this shift of global PR power is that it’s easy to criticise but a lot harder to paint on the bigger global communications canvases were seeing on our side of the Pacific for the first time.