A new study by the Economist Intelligence Unit (EIU) highlights six industry sectors poised for significant growth in Asia: engineering services, environmental technology, food processing, healthcare, oil & gas, and wholesale & retail. Commissioned by InvestKL, Kuala Lumpur’s investment agency, the “industry dynamism” barometer suggests sustained corporate investment in Asia will drive long-term economic expansion.

Engineering Services

Asia’s need for new infrastructure is fueling rapid growth in engineering services. An estimated US$8 to US$9 trillion will be invested in infrastructure between 2010 and 2020. Consequently, engineering firms in Asia are experiencing remarkable growth, with publicly listed companies seeing annual revenue increases of 20% between 2005 and 2011. This growth is driven by Asia’s increasing share of global GDP, solidifying its position as a leading market for engineering services.

Environmental Technology

While Europe’s support for renewable energy has waned, Asia is demonstrating strong policy support and record-breaking investment in clean technologies. The value of fixed assets per company in the clean technology sector grew by an average of 9% annually throughout the study period. This trend is attributed to rapid urbanization in Asia and the increasing need for sustainable urban environments and infrastructure. The region’s carbon footprint, already larger than the US, EU, and Russia combined, further underscores the demand for environmental solutions.

Food Processing

Changes in food consumption driven by rapid urbanization are creating opportunities for food processing companies in Asia. Efficient distribution networks, including those connecting urban centers with rural suppliers, are becoming increasingly important. Publicly listed food companies in Asia experienced an average annual revenue growth of 23% between 2005 and 2011. Adapting to local tastes and preferences is crucial for success, requiring global brands to localize products and creating a demand for innovative, homegrown food concepts. The projected doubling of food spending in Asia by 2050, representing three-quarters of the global increase, further highlights the sector’s potential.

Healthcare

Asia’s healthcare sector presents significant opportunities due to a growing and aging population. The region requires 180 million new hospital beds over the next decade, and the pharmaceutical market is expected to expand by over 13% annually, reaching US$386 billion by 2016. Asia’s share of global biomedical research has increased significantly, reflecting the sector’s growth. Publicly listed healthcare companies in Asia saw revenue rise by almost 23% per year between 2005 and 2011, with profits growing even faster at 31%. However, challenges such as increased competition, rising costs, and stricter regulations will need to be addressed.

Oil & Gas

Asia’s increasing energy demands are driving growth in the oil and gas sector. Meeting this demand presents both challenges and opportunities, particularly as most countries in the region are net importers. While the demand for gas is expected to increase due to its environmental benefits, opportunities exist for upstream development, especially in new gas fields. To extract resources from complex fields, regional companies are increasing investment in new technologies. Despite strong revenue growth, the industry faces challenges such as heightened competition, rising costs, and a shortage of skilled labor.

Wholesale and Retail

With Asia’s population projected to reach 4.6 billion by 2040 and average consumer wealth increasing, the wholesale and retail sector holds immense potential. The region’s share of global GDP has risen significantly, driven by urbanization and the growth of modern retail formats. Retail sales in Asia-Pacific are predicted to increase by 10.2% annually between 2013 and 2018, outpacing the global growth rate of 6.9%. Online retail, in particular, is expected to experience remarkable growth. However, a shortage of skilled labor and rising wages present challenges for profit growth.

The EIU report emphasizes the eastward shift of economic power, with emerging market cities, many located in Asia, driving global GDP growth. Southeast Asia, experiencing rapid urbanization and income growth, is expected to be a significant economic engine. The report concludes that cities will be the “dynamos of the future” due to their population growth and productivity increases.