However, not all the Asia Pacific economies demonstrate robust health. Labor Productivity, the key to a country’s standard of living, would probably form the major indicator to judge economic health and effective, management practices. A study conducted by the Organization for Economic Co-operation and Development (OECD), detailed in Table 1, estimated productivity levels in major, OECD member countries' manufacturing and service sectors. Although many countries made great progress, the USA emerged as the undisputed leader among the rich countries: In 1995, productivity in manufacturing (as measured by value-added per hour worked) appeared 20-30 percent lower in most-other, rich, industrialized countries. Table 1 includes the UK as a Western comparison point; additionally, it clearly displays Japan’s extraordinary advances in productivity. However, the OECD data also reveal that Australia, another Asia Pacific country, showed at the bottom of the league, and slipped in relative productivity over the last decade: Australian manufacturing workers produced barely half as much as their US counterparts in each hour worked.

The International Institute for Management Development (IMD) also conducts annual rankings of World Competitiveness: to rank countries, the IMD reports utilize 244 variables including some measures of productivity. In 1997, for the fifth year in a row, the USA emerged as the world’s most-competitive country; Singapore captured second-place for the fourth-year in a row. The rankings for major Asia Pacific countries, and for the UK as a Western reference point, follow: USA (1), Singapore (2), Hong Kong (3), Japan (9), UK (11), New Zealand (13), Malaysia (17), Australia (18), Taiwan (23), China (27), Thailand (29), South Korea (30), Philippines (31), Indonesia (39), and India (41).

The dominant Asian economies, though much-more dynamic than the Australian, have started showing signs of slowing down. Export growth in East Asia approximated only five percent in 1996 -- feeble compared with the roughly 20 percent growth achieved in 1994 and 1995. Malaysia, South Korea and Thailand are running current-account deficits of between five and eight percent of GDP; labor strikes have disrupted South Korea; stockmarkets in Bangkok and Seoul have plunged; financial systems through the region look shaky. Singapore’s GDP growth rate fell to 5.8 percent in the fourth quarter of 1996, down from an average of 9.5 percent in 1994 and 1995. Average GDP growth in the region slowed from almost nine percent in 1995 to seven percent in 1996 -- a rate that the US or European countries would covet; however, the industrial production of the richest Tigers, Singapore and Hong Kong, also tumbled by 5 percent. Other uncertainties loom in the region: Hong Kong returns to China in July 1997; India remains Asia's sleep-walking giant, jerkily and unsteadily moving towards structural reforms and inviting foreign investment ; and major, political uncertainties will raise their heads as old, established leaders or political systems falter or die in Indonesia, Singapore, Malaysia, China and India. Nevertheless, Asian growth still outstrips the industrialized economies’ average annual growth of 2.5 percent.

This sequel issue on Strategic Management in the Asia Pacific offers strategies from experts in the region on how to manage the strong winds of change -- and provides reasons to invest in the still-dynamic region. Like its predecessor, all the articles in this issue clearly address complex, strategic issues, have sound theoretical bases and offer practical suggestions that managers and policy makers can use. In addition, all the articles explore an important consideration for local and foreign managers and governmental policy makers: Can regional companies and local stakeholders compete effectively against foreign MNCs and investors? Tan Kong Yam, Singapore's former chief economist, argues for East Asia’s continued, self-sustaining growth, and he elaborates on how this new economic order is shaping competitive environments and business strategies; George Haley and I indicate how foreign investment in tourism is shaping the future of Vietnam, a transitional economy of enormous interest to governmental and private investors, and we show how governmental policy can control this country’s development; George Haley describes how a dominant business force in Asia, the Overseas Chinese Networks, engage in strategic planning, and he offers suggestions on how foreign MNCs can compete effectively; Ranjan Das sketches how MNCs emanating from liberalizing economies, such as India, formulate strategies to deal with foreign investment, and he offers pragmatic suggestions for the local companies to compete; Philip Wei and Chris Christodoulou analyze how small and medium-sized Taiwanese companies make decisions to invest in the Asia Pacific, and they explore strategic implications for managers and governmental policy makers; and finally, Gary Fontaine elaborates on problems encountered when transferring foreign employees to, from or within the Asia Pacific, and he offers practical advice for MNCs’ human-resource practices.

I take great pleasure in presenting this special issue on Strategic Management in the Asia Pacific: Perspectives from the Region.

May 1997
Usha C. V. Haley
The Australian National University
Canberra, Australia