Business: How 2022 Will Pan Out for Tech and Asia on the Ground
Everyone has their start-of-year opinions on what will happen in 2022. But as typical readers or viewers of BBC, The Economist, Bloomberg, or World Economic Forum, it feels safe to say that the events that they believe will shape the world will vary in how much they affect my peers and I — or more broadly, their typical audience in Asia.
As such, to come up with 2022 predictions that may affect — or be opportunities — for you and me, it’s worth mixing the past year’s global news with our personal news stories — what has affected us, our careers, or money. So, from the perspective of an everyday individual or business trying to make it in Asia’s dynamic economy, here’s what I’ll be keenly watching — or even looking to get involved in.
(And as a disclaimer, this isn’t investment advice.)
- Beware of high-potential technologies being passed off as asset classes with intrinsic value.
Yes, I’m mostly referring to NFTs.
Consider one of the most popular NFT-based games, Axie Infinity. Despite having only 1–2 million daily players, ‘Axies’ (in-game characters, in the form of an NFT) have become so expensive that there are now startups being founded purely to allow people already priced out to buy into them and join the game.
In 2021, the most valuable Axies sold for $450,000 — $800,000. Compare this with the most expensive Pokémon card ever sold, a $375,000 illustrator’s limited edition Pikachu (barely half the value of the most expensive Axie), depicting the most popular character of a ~$90 billion media franchise that sold 12 million games and 3.7 billion cards in 2021. On a comparables basis, Axie Infinity’s brand value and sales numbers would have to reach, or exceed, those of Pokémon to justify such expensive NFTs. And this is before we even consider NFTs that have no use, either in the real world or in a virtual universe such as a computer game. - Emerging markets will bounce back stronger from their COVID reckoning.
Last year I published concerns that COVID will be a time of reckoning for emerging markets worldwide.
I’m relieved to see that at least in Southeast Asia, countries are bouncing back, and in ways that address more structural issues that held them back pre-COVID. New public transport lines are being completed in the Philippines and Vietnam, and Metro Manila took advantage of lockdowns to open a bike network. While it’s no Amsterdam or Copenhagen, it’s a start; something I couldn’t have conceived in Manila’s ‘normal’ pre-COVID congestion.
Business and investor interest also appear not to have faltered — in fact, in some countries, it has thrived on COVID, to coincide with bullish projections for its online economy’s growth, while the Philippines and Thailand both found their first (legitimately sustainable) unicorns. The SME B2B or financial inclusion-related nature of many SEA unicorns is a reason to hope that ASEAN’s post-COVID growth will be more inclusive of the lower and middle classes than its pre-COVID growth era. - Investors will tap into public anger to pick up governments’ slack on climate inaction.
Many were disappointed — even despairing — but unsurprised at the outcome of COP26 last year. But this doesn’t change the reality of what is being predicted — and neither will despair, so there are things that we can do, at multiple levels (and as this is a New Year, perhaps make part of a New Year’s resolution). 2022, and the following years, could see this action being picked up in the investment world. If (based on the types of companies becoming unicorns) the 2010s was the decade of fintech, healthtech, and e-commerce, then the 2020s can be the decade of climate-relevant sectors, such as agtech, energy, transport-tech, and proptech.
Why? Firstly, venture capitalists have been racing to scale up companies beyond sustainable levels, making the space due for consolidation. Secondly, many 2010s unicorns are ‘enablers’ (e.g. e-commerce or ride-hailing giants) of which, thanks to network effects, there can only be so many; and at some point, we will have to invest in ‘producers’ again. Thirdly, as above, SEA institutions and governments are finally picking up the pace on infrastructure projects, which can support more business and innnovation. Fourthly, as the climate crisis gets worse in emerging markets, with events such as floods and typhoons/cyclones in Southeast Asia, their people are going to feel pain points more acutely, making these places hotbeds for new ideas to curb them.
Of course, this is my perspective as someone on the ground still working to make it, based on what will affect areas I’m passionate about. But when you mish-mash The Economist’s predictions with your own New Year’s Resolutions and learning/professional goals and interests, you may just find new motivation to not just watch the year unfold but be a part of it.
Watch this space for deep-dive insights on these three themes as they evolve in the months ahead.