As Asia grows, SMEs must venture out, or miss out

Entrepreneurs face what initially appears to be a dilemma. They can maintain the status quo, striving to build their business in the traditional markets that they know and trust, or they can venture into new territory, tackling the host of logistical, financial and cultural challenges that entails.

Stop to think for a moment and you'll realise that there's no dilemma here at all. The time to be brave is now.

The shape of global demand is undergoing a profound transformation. Manufacturers used to be able to rely on domestic demand and, if they were more ambitious, exports to consumers in Europe and North America.

But that has changed. In Western markets, consumers are using any extra cash they might have to pay down their debt rather than go shopping. For the ambitious entrepreneur, the outlook in the developed world is flat. The future lies in the emerging markets; almost five billion people with cash in their pockets, more than ready to buy into the consumer experience.

By 2050, HSBC research forecasts that the collective size of the economies we today call "emerging" will have increased fivefold to eclipse those we now call "developed". What this means for the emerging world is real-wage increases and an expanding middle class. For small and medium-sized enterprises, it means new challenges, and opportunities.

The shift to emerging markets as the primary driver of global consumption may still have a long way to go, but it has already had an effect on the patterns of global business. The Asia-Pacific region accounted for 7 per cent of Apple's net sales in 2009, for example, but in 2011 this share climbed to 21 per cent.

The reach of global behemoths like Apple is unsurprising. What is more surprising, and is likely to be a defining trend of our age, is that smaller companies are using advances in financing tools, logistics and technology to make a bold push into new markets.