You may have heard of the term “The Asian Tigers”. The four countries known as The Asian Tigers are Hong Kong, Singapore, South Korea, and Taiwan. Each country has a population of consumers eager to buy your product or service and should be considered as part of any international marketing campaign. With this in mind, it’s worthwhile taking a look at the history of these countries and how they came to earn the designation of tigers.
What are the Similarities Between The Asian Tigers?
What the four tigers have in common is rapid growth through industrialization. This transformation began in the 1960s when transnational companies (TNCs) were looking around for regions with low labor costs, among other things. These four nations represent the first generation of newly industrialized countries (NICs). Japanese TNCs were in the vanguard of businesses seeking new areas for their operations. Therefore it was natural that they would choose their less-developed neighbors such as South Korea and Taiwan as hosts for their manufacturing operations.
The advantages of these less developed countries for manufacturing TNCs included:
- Reasonably well-developed infrastructures – roads, ports, railways.
- Populations that were relatively well-educated and had existing skills.
- Cultural traditions that valued education and achievement.
- Beneficial geographical locations. This is especially the case with respect to Singapore, which lies between the Pacific and Indian Oceans, making it an ideal location for trading.
- Governmental support, such as low-interest rates on bank loans.
- Less rigid regulations with respect to labor, taxation, and pollution than in TNC home countries.
As the economies of the four Asian Tigers began to grow, local industries started to spring up assisted by government aid and favorable economic climates. One notable example is South Korea’s Samsung, which is now one of the largest producers of consumer electronics in the world. Samsung mobile phones are now major rivals of Apple’s iPhones. Let’s take a look at the history of each of the four Asian Tigers in more detail.
1960 was the beginning of a new decade for Hong Kong. The construction industry was revamped, and its expanded textiles manufacturers gave a boost to its economy. Hong Kong developed into the most attractive business environment within East Asia and became the third-largest recipient of foreign direct investment (FDI) in the world. The government plowed the country’s profits into roads, hospitals, and schools, and other infrastructure and services. Wages in Hong Kong were also relatively flexible, which helped GDP to grow massively between 1961 and 1997. Hong Kong’s skilled labor force and its inherited modern British business methods and technology maximized its opportunities for trade and investment. Hong Kong now has one of the largest trading ports in the world.
Singapore was once part of Malaysia. When it became independent in 1965, Singapore was a poor country. The people faced high levels of poverty and unemployment, half the population was illiterate, and per capita GDP was US$516. To solve these problems, the Singapore government set up an Economic Development Board with the aim of making Singapore attractive to FDI. Within the ensuing decades, FDI increased so rapidly that by 2001 foreign companies accounted for 75% of manufactured output and 85% of manufactured exports. Singapore’s strategically located deep-water harbor is ideally situated because it links important trade routes. The country now boasts a highly-developed trade-oriented economy. Singapore is currently the highest-ranked Asian country in the Human Development Index (HDI) and is 9th in the world. It’s GDP per capita is currently in the region of US$59,400, quite a rise since 1965!
Although South Korea has few natural resources, it did have a large workforce which was flexible and cheap. The government understood that increased investment in agriculture was not going to lead to high levels of economic growth. Instead, it created an environment that attracted large TNCs such as Sony from Japan and encouraged FDI from the US. South Korean firms were also protected by the imposition of high import taxes, thus ensuring a sufficient market for locally produced goods. The government also implemented its own research and development program in the world of high-tech. This led to South Korea producing leading technologies and products. Today the brands Samsung, Hyundai, and Daewoo are known worldwide.
Large TNCs also targeted Taiwan. One outstanding example is Mattel, the American toy company. In the late 1960s, Mattel moved its main factory from Japan to the island of Taiwan. This represented one of the first movements of such large scale manufacturing operations that were to eventually transform eastern Asia into the workshop of the world. At one point, Mattel’s Taiwan factory churned out more than half of all the Barbie dolls made worldwide. However, in the late 1980s, rising incomes in Taiwan encouraged Mattel to move on to other countries with a cheaper labor force. Barbie dolls are currently being manufactured in China, Malaysia, and Indonesia. However, the Taiwanese economy has continued to benefit from globalization, and its high-tech industries are thriving.
The Asian Tigers Today
As the economies of these NICs continued to grow, operating costs within these countries began to increase. Therefore, TNCs have been looking to second-generation developing countries such as Thailand and Malaysia. All four of The Asian Tigers are now considered to be developed countries. As such, they present attractive markets to any company wishing to expand internationally. Localize understands that the stripes of each tiger are different – each country has its own language and culture. Talk to us to see how our translation/localization platform can help you tame that tiger!