The state of entrepreneurship in Asia Pacific economies

29 April 2021 Consultancy.asia 4 min. read

Entrepreneurs play a key role in Asia Pacific (APAC), with entrepreneurship the engine-room of national economies. A new report by Frost & Sullivan in collaboration with Oracle explores what motivates entrepreneurs in the region, and how they define success.

The researchers surveyed more than 500 entrepreneurs across Australia, New Zealand, China, Hong Kong, India, Japan, Philippines and Singapore – for a look behind the scenes of one of the most vibrant entrepreneurial regions worldwide.

First on the agenda is motivation: what drives people to up and start a business? Most often, it’s a response to a gap in the market, driven by a personal passion for business – termed by the researchers as ‘opportunity entrepreneurship.’ Over 40% of respondents chase an opportunity with their business – a segment dominated by China and Hong Kong.

Top motivations for entrepreneurs in APAC

Others start their enterprise out of the necessity to make money – a driving force most common in Philippines and New Zealand. The need to control one’s professional context and family obligations to take over the business also play a role in some cases – most frequently in Australia and Japan. 

Irrespective of motivation – the goal for most entrepreneurs is monetary. Cashing out with enough wealth for self and family – either by selling or listing – is a common intention, and profitability is the primary measure of success for nearly 60% of businesses. This is closely followed by customer satisfaction, which paves the way for retention and future growth.

Revenues and personal remuneration are also top indicators that an enterprise is successful, while others are happy with a high valuation, a good social impact, and a healthy headcount. All things considered, metrics of growth and lucrativeness are held in higher regard that purpose and values – at least among entrepreneurs.

Measures of business success for APAC entrepreneurs

With vast pools of investment flowing into APAC, it’s no surprise that the overwhelming majority – short of 80% – believe their businesses to be successful. The anomaly here is Hong Kong, where less than 30% of entrepreneurs claim success – with over 40% reporting uncertainty around the status of their business. 

Japan also produced a relatively modest set of responses, with less than half of businesses claiming success. All other APAC markets surveyed had a success rate of 70% or higher – with New Zealand and China hovering around the 90% mark, while India and Australia follow closely behind at around 85%. 

“The results of this study show that we can feel confident about the state of entrepreneurship in the Asia-Pacific region,” noted Frost & Sullivan director Mark Dougan, who highlighted the promise such a scenario brings in a wider economic context.

Most APAC entrepreneurs report business success

“Entrepeneurs play a key role in national economies, with the willingness of individuals to start businesses and their success in making these businesses grow, being key aspects of national economic success.” Not to ignore the elephant in the room, Dougan, highlighted the positive response to the global pandemic as well. 

“Entrepreneurship is a lifelong journey of learning, and following the uncertainties of last year, the most important lesson learned is having a flexible business model. Most entrepreneurs feel they have managed to respond well and feel confident in their own success, as well as in the growth and future success of their businesses.” 

One example is technology – rapidly emerging as a foundation for most operations. More than 65% of businesses now use software to drive success, most notably Software-as-a-Service (SaaS) –“an increasingly common way of accessing key business applications” according to Dougan.