However, this economic reliance on land transport comes at a steep environmental cost. According to the International Energy Agency (IEA), the transport sector accounts for approximately 30% of energy-related CO₂ emissions across Southeast Asia, with road vehicles responsible for nearly 90% of these emissions. This makes road transport not only a source of economic strength but also a primary contributor to the region’s carbon footprint.^[1]

As ASEAN nations race toward their net-zero targets, one reality stands out: decarbonizing the transport sector is not just an environmental imperative – it’s a societal one. Road transport alone contributes disproportionately to national emissions. In 2023, the share of road transport in total greenhouse gas emissions ranged from 17% in Singapore to a staggering 42% in Lao PDR, with major economies such as Indonesia (28%), Malaysia (29%), Thailand (26%) and Philippines (26%) also bear a significant transport-driven emissions load.^[1] This clearly signals that decarbonizing urban mobility must be a frontline priority – not a secondary concern.

Figure 1: Road Transport Emissions as share of total emissions in ASEAN 2023 ^[1]

But the case for transport decarbonization extends far beyond carbon reduction. It is also about saving lives. High concentrations of PM2.5 – a fine particulate pollutant largely caused by vehicle emissions – have silently reduced life expectancy across Southeast Asia. By permanently lowering PM2.5 levels from 2021 concentrations to the World Health Organization’s recommended guideline, countries can achieve extraordinary health gains. In Myanmar, such a reduction could increase life expectancy by 3 to 5 years. In parts of Laos and Thailand, a 2 to 3-year gain is possible. Decarbonizing transport is thus not only a climate mandate but also a public health intervention with tangible, measurable outcomes.^[2]

The five pathways to urban transport decarbonization

To build truly sustainable transport ecosystems, ASEAN cities must pursue a multi-pronged strategy. There are five key pathways to urban transport decarbonization – each uniquely empowered by AI and digital technologies:

Figure 2: AI-enabled pathways to decarbonize urban transport

AI and Digital: The connective tissue of sustainable mobility

While the five pathways provide clear directions, real progress demands convergence – a seamless integration of multiple technologies, platforms, and data ecosystems. This is where AI and digital technologies become the unifying force.

Modern sustainable transport solutions rely on a complex interplay between:

The convergence of these systems shifts urban transport from fragmented legacy operations toward a cohesive, intelligent network. It enables cities to predict congestion, optimize routes, personalize commuter experiences, and dynamically respond to shifting demand – all in real time. More importantly, it supports resource-efficient urban design, where AI informs everything from investment planning to energy use to spatial zoning.

15-Minute Cities: A model for the future

One of the most promising urban planning frameworks for sustainable, inclusive cities is the “15-minute city”^[3] – a concept where residents can access work, education, healthcare, retail, and recreation within a 15-minute walk or ride from their homes. Cities like Paris and Melbourne are leading this transition, while Singapore and Dubai are beginning to adapt the model to their own urban realities.

What makes this model viable in dense, fast-growing ASEAN cities is the integration of AI and digital technologies, which serve as essential enablers at every stage of implementation.

In essence, the 15-minute city is more than just a walkable neighborhood – it’s a digitally intelligent ecosystem, enabled by AI and connected infrastructure, offering cleaner air, reduced travel times, better quality of life, and stronger local economies.

Figure 3: Digital and AI enablement of the 15-minute city

The Road Ahead: Opportunities and Bottlenecks

As ASEAN cities transition toward smart mobility, several challenges must be addressed:

Addressing these challenges will demand cross-sector collaboration among governments, private players, and advisory firms.

How IGPI Can Help

IGPI Singapore has been a trusted partner to mobility players navigating structural transformations, digital disruption, and business model innovation. Our extensive project experience spans:

Our goal is to help clients design sustainable, AI-enabled, and commercially viable mobility strategies tailored to the ASEAN context.

Conclusion: The future is Smart, Shared, and Sustainable

The future of transport in ASEAN isn’t just electric – it’s intelligent. Digital transformation and AI are not mere support functions, they are strategic levers that determine how inclusive, clean, and resilient our cities become.

At IGPI, we believe that rethinking mobility through the lens of digital innovation can unlock economic opportunity, environmental health, and social equity – all at once.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

References

[1] EU-ASEAN Business Council (2024): Clean Journeys Ahead – Charting ASEAN’s path towards a decarbonized transport sector
[2] Energy Policy Institute at the University of Chicago. Air Quality Life Index (AQLI)
[3] The 15-Minute City: A Solution to Saving Our Time and Our Planet (by Carlos Moreno, published in 2024)

About the authors

Kohki Sakata, Partner of IGPI Group & CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

Shivaji Das, Managing Director of IGPI Singapore
Shivaji has over 20 years of strategy consulting experience, specializing in New Business Models, Innovation Roadmaps, and Sustainability Journeys. He has worked with private and public sector clients across 25 countries in sectors like Technology, Semiconductors, Chemicals, Healthcare, Renewable Energy, and Construction. Previously, Shivaji was a Partner and Managing Director-APAC at Frost & Sullivan. His paper on Artificial Intelligence was presented at CAINE-2000 in Hawaii, USA. He is the author of seven acclaimed travel, art and business books including The Visible Invisibles and Rebels, Traitors, Peacemakers (both Penguin Random House), as well as The Great Lockdown: lessons learned during the pandemic from organizations around the world (Wiley, USA).
He is an alumnus of IIT Delhi and IIM Calcutta.

Harsh Munim, Associate of IGPI Singapore
Harsh is a dynamic professional with an MBA from NUS Business School and a BBA in Finance from City University of Hong Kong, where he also had the opportunity to go on an exchange program to Indiana University Bloomington in the United States. With over 4 years of experience, Harsh brings a wealth of expertise to his role at IGPI. Prior to joining IGPI, he worked as a Senior Project Manager at an investment research firm in Hong Kong, where he managed diverse projects in South East Asia and Oceania. During his MBA, Harsh interned with IGPI, contributing to projects related to carbon credits, microgrids, and the consumer goods industry. He also gained valuable experience at IQVIA, where he supported global pharmaceutical companies on LOE strategy, segmentation, targeting, and go-to-market projects. 

About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

From Discount to Premium

For decades, conglomerates were viewed as lumbering dinosaurs—unwieldy, unfocused, and burdened by internal complexity. Investors punished them with the so-called “conglomerate discount”, assuming that no single leadership team could effectively manage disparate businesses under one roof.

But the tides are turning. In an era defined by industry convergence, digital integration, and AI-enabled insight, conglomerates are discovering that scale and diversity can now be competitive assets rather than liabilities. The age of the conglomerate premium has quietly begun. In addition, large conglomerates are adapting more effectively to the shifting geopolitical situation landscape – marked by rising economic nationalism and trade wars – by building more resilient supply chains and leveraging lobbying power to influence regulations and policies.

The Data Dilemma

The long-promised synergies of conglomerates have remained elusive. Many still struggle with internal silos, rigid data policies, and incompatible systems. Even in sectors where cross-industry collaboration is critical—such as smart cities or healthcare—efforts to share data are often hindered by misaligned incentives or governance friction.

The opportunity cost is enormous. Imagine if property developers could partner seamlessly with mobility providers to optimise urban design, or if banking data could be harnessed to flag early signs of cognitive decline. The technological engines now exist, but the data-sharing architecture still lags behind.

Trading Houses Find a Way

Yet there are bright spots. Some Japanese trading houses, historically diversified by design, are now realising data-driven synergies across business lines. In Southeast Asia, they are developing integrated industrial parks and smart cities, blending expertise in energy, mobility, and real estate under a unified strategic vision. These are not joint ventures in name only; they represent genuine cross-unit collaboration, made possible by aligned data systems and purpose-driven integration.

Government-led efforts are also gaining traction. In healthcare, the sharing of anonymised data across hospitals, insurers, and policymakers is beginning to deliver systemic efficiencies. In finance, unexpected insights are emerging—from internet banking patterns that reveal early signs of dementia, to cross-sector signals that drive innovation in elderly care.

AI: The Internal Integrator

The rise of generative AI could fundamentally transform conglomerates. By ingesting data across divisions—from intellectual property to operations to customer insights—AI can detect patterns, spark innovation, and generate thousands of viable business ideas in minutes. What once took months of internal coordination can now be achieved in seconds.

This is more than efficiency. AI offers a new model of creative integration—surfacing connections that human silos overlook, without forcing cultural convergence or endless alignment meetings. In this light, conglomerates don’t need to be restructured – they need to be rewired.

Building the Premium

In emerging markets, this new logic is already producing winners. Take VinGroup in Vietnam: spanning retail, real estate, and EV manufacturing, it has evolved into a multi-industry platform capable of generating and leveraging data across the entire value chain. Its mobility services collect user behaviour that informs smart city development—an advantage that few pure-play rivals can replicate.

Across India and Southeast Asia, similar patterns are emerging. As governments court investment while maintaining complex regulatory environments, conglomerates are often best positioned to navigate policy ambiguity, scale new ventures, and capture market share—faster than their startup counterparts.

What Separates the Best

The highest-performing conglomerates are not merely bigger—they are strategically coherent. What sets them apart is leadership: CEOs who can define a group-wide purpose that transcends sectors, allocate capital accordingly, and foster collaboration without forcing conformity.

As industry boundaries blur, silo-specific strategies matters less than a shared sense of direction. Asset allocation becomes an act of orchestration, not just budgeting. Purpose replaces rigid planning as the compass for decision-making.

From Creative Destruction to Creative Integration

Traditional corporate strategy focused on creative destruction – divest, acquire, pivot. Today’s leaders are turning to creative integration—combining existing assets and capabilities in new ways to generate fresh value. Diversification comes first, integration follows. It’s a more fluid, experimental approach, but no less disciplined.

This represents a shift from the old portfolio mindset. Instead of simply choosing which businesses to back or exit, leaders are rethinking how the pieces fit together. The future belongs to firms that can continually recombine their components—not just add or subtract them.

Rethinking Corporate Venturing

Corporate venture capital (CVC) was intended to address the innovation challenge. In the West, it often works – modular organisations can more easily absorb and scale startups. In Asia, however, results have been mixed. Highly integrated corporate structures make it harder for external ventures to plug into existing systems.

Startups selected by CVC units may appear promising, but they often stall post-investment—struggling to access networks, customers, or internal capabilities. In such environments, internal new business creation, supported by cross-unit collaboration, may offer a more viable path forward.

The Empire Rewrites Itself

The modern conglomerate is not a relic. With AI as connective tissue, data as a shared resource, and leadership grounded in purpose rather than control, the conglomerate is being reborn as an orchestrator of ecosystems.

The discount is fading. The premium is rising. And the playbook is being rewritten.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the authors

Kohki Sakata, Partner of IGPI Group & CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

Shivaji Das, Managing Director of IGPI Singapore
Shivaji has over 20 years of strategy consulting experience, specializing in New Business Models, Innovation Roadmaps, and Sustainability Journeys. He has worked with private and public sector clients across 25 countries in sectors like Technology, Semiconductors, Chemicals, Healthcare, Renewable Energy, and Construction. Previously, Shivaji was a Partner and Managing Director-APAC at Frost & Sullivan. His paper on Artificial Intelligence was presented at CAINE-2000 in Hawaii, USA. He is the author of seven acclaimed travel, art and business books including The Visible Invisibles and Rebels, Traitors, Peacemakers (both Penguin Random House), as well as The Great Lockdown: lessons learned during the pandemic from organizations around the world (Wiley, USA).
He is an alumnus of IIT Delhi and IIM Calcutta.

About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

From Global Ambitions to Local Realities

Not long ago, globalisation seemed unstoppable. Goods, capital, people, and ideas flowed ever more freely across borders. Corporations scaled vertically and horizontally, orchestrating global supply chains from boardrooms thousands of miles away from the markets they served. That was then.

Now, regionalisation is taking centre stage. This is not a retreat from globalisation, but its transformation—a reorientation of economic activity into clusters that are geographically tighter or culturally aligned, though not always physically proximate. The world isn’t merely fragmenting; it is reorganising.

The Digital Revolution as Catalyst

The transition began with internationalisation—the export of high-quality manufactured goods from industrialised nations to the rest of the world. It then evolved into globalisation, as information, labour, and finance began to circulate with greater ease. But in recent years, two forces have accelerated a new shift; the digital revolution and the maturation of emerging economies.

The smartphone has become more than a communications tool—it has a means of production and distribution. What once required entire departments and vast budgets can now be executed by a single individual with access to software and connectivity. The manufacturing sector, too, has evolved. In the case of electric vehicles, modular components and simplified architecture have enabled even start-ups to challenge incumbent automakers. In China alone, hundreds of new EV firms have emerged.

The Rise of the Regional Consumer

At the same time, rising income levels in countries like India, Indonesia, and Vietnam have shifted the nature of demand. Consumers are more discerning. Local tastes and constraints matter more. Multinationals can no longer impose global templates with impunity. The region has become the unit of competition.

This shift is shaping how organisations make decisions. Where strategy was once determined at corporate headquarters and cascaded down through operational layers, today it is increasingly shaped at the frontline. A motorbike driver in Jakarta using a super-app or a clinic in Manila adopting digital payment trends is no longer just executing a strategy—they are shaping it. Technology enables them to respond to real-time needs in ways centralised command structure never could.

From Command Centres to Platforms

Platforms like Gojek exemplify this evolution. Their services vary meaningfully from city to city, driven by local market dynamics rather than corporate mandates. The role of the executive has changed—from being the architect of strategy to the designer of systems: setting purpose, establishing protocols, and ensuring internal alignment, while allowing decentralised innovation to thrive.

This does not signal the end of scale, but a redefinition of it. Regional platforms are growing not by cloning global models, but by adapting their core philosophies—digital inclusion, local empowerment, logistical infrastructure—to each context. Taobao Villages, for example, born in rural China, are extending their reach to places like Mexico and East Africa. The blueprint remains, but the structure bends to local conditions.

Scaling with Context, Not Uniformity

This form of regionalisation resists easy dominance. It demands humility, patience, and a deep understanding of context. Companies cannot rely on brute force or uniform branding. They must localise interfaces, services, and even corporate culture, while maintaining scalable back-ends systems such as pricing algorithms or logistics hubs.

The result is not a balkanised world, but a layered one—where integration takes different forms, and success depends less on size than on relevance. The firms that will thrive are not those with the most resources, but those most attuned to the needs within a five-kilometre radius.

A New Age of Global Design, Regional Execution

In this new world, regionalisation is not the antithesis of globalisation. It is its evolution—more adaptive, more decentralised, and, perhaps, more resilient.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the authors

Kohki Sakata, Partner of IGPI Group & CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

Shivaji Das, Managing Director of IGPI Singapore
Shivaji has over 20 years of strategy consulting experience, specializing in New Business Models, Innovation Roadmaps, and Sustainability Journeys. He has worked with private and public sector clients across 25 countries in sectors like Technology, Semiconductors, Chemicals, Healthcare, Renewable Energy, and Construction. Previously, Shivaji was a Partner and Managing Director-APAC at Frost & Sullivan. His paper on Artificial Intelligence was presented at CAINE-2000 in Hawaii, USA. He is the author of seven acclaimed travel, art and business books including The Visible Invisibles and Rebels, Traitors, Peacemakers (both Penguin Random House), as well as The Great Lockdown: lessons learned during the pandemic from organizations around the world (Wiley, USA).
He is an alumnus of IIT Delhi and IIM Calcutta.

About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

Strategy: From ‘How’ to ‘Why’

There was a time when purpose was prepackaged. Life followed a script: study hard, land a job, buy a house, and retire in comfort. Meaning was socially constructed and widely shared. To succeed, one simply followed the rules.

That era has passed. Today, individuals are freer-perhaps even too free. With tradition in retreat and institutions in flux, the burden of defining meaning has shifted from systems to selves. We are no longer choosing between clear paths; instead, we are now tasked with inventing them. Strategy, which was once a question of how, has become a question of why.

As collective beliefs dissolve, a peculiar phenomenon emerges: the elevation of tactics into ideology. When the destination is uncertain, people cling to the map. Education becomes sacred. Wealth becomes virtue. Process becomes principle. In this void, the means are often mistaken for the ends.

In corporate life, this appears as process worship: the KPI becomes king, and the playbook becomes scripture. In parenting, it emerges as academic fundamentalism. In governance, it breeds procedural paralysis.

These are not strategies; they are symptoms of strategic disorientation.

In simpler times, such patterns worked. When “success” meant job security, or when “happiness” was synonymous with home ownership, fixed methods were efficient. Today, however, those outcomes have become abstract. We now speak of self-actualization, personal meaning, and authenticity. These are concepts too fluid for rigid tools. Yet many still chase metrics that no longer measure anything real.

Optimizing For Better, or Deciding What Matters

This shift marks a profound transformation in the nature of strategic work. In the industrial age, strategy meant optimization: doing known things better. In the post-industrial age, it means orientation. The focus is now on deciding which things matter at all.

Japan is a case in point. Despite its safety, infrastructure, and relative prosperity, it consistently ranks low on global happiness indices. The explanation cannot be material; it is existential. The answer lies in the gap between the measurable and the meaningful.

Even branding reflects this shift. Once built on functional and emotional value, modern brands now trade in identity. Products are no longer merely useful or delightful; they are aspirational. They promise not just performance, but transformation. In this new “purpose economy,” the product is not the object itself. Instead, it is the self the object allows us to become.

Transitioning Leadership from Navigating to Designing Direction

The implications for leadership are profound. Strategy must now account not just for markets or operations, but also for mindsets. Leaders are no longer navigators of terrain. They are designers of direction, responsible for holding space for ambiguity, stewarding identity, and anchoring people in a world where everything-including purpose-must be self-defined.

This shift brings risk. In systems built for predictability, ambiguity can be destabilizing. In cultures of bottom-up consensus, belief in method becomes deeply ingrained. In top-down systems, rapid pivots are possible, but often come at the cost of depth and coherence. Each approach has strengths, but both risk misalignment in a world where context evolves faster than culture.

What is needed is not new ideology, but strategic adaptability. Organizations must develop the ability to reconfigure structures, not just goals. We need systems that can learn and evolve.

A Call to Stewardship

The old question, “What should we do?” must now be preceded by a harder one: “What are we aiming for?” That question cannot be answered by data alone. It requires judgment, perspective, and, above all, thoughtful design.

In this new landscape, the manager is no longer simply a planner. She is a philosopher with a P&L. The strategist is no longer just a tactician. He is a curator of collective meaning. It is no longer about finding the fastest route. It is about deciding what is truly worth the journey.

Strategy, in short, has become stewardship.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the author

Kohki Sakata, CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

 About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

In a recent conversation between Kohki Sakata (CEO, IGPI Singapore) and Shivaji Das (MD, IGPI Singapore), the two explored what’s making Japan attractive today, what sectors present the greatest opportunities, and how foreign firms can succeed in one of Asia’s most complex markets.

Japan: A Market at the Crossroads

Several recent factors are converging to attract renewed global interest in Japan. The weakening yen and the relatively low valuation of listed Japanese companies have made the market especially appealing, especially from an M&A perspective. Many firms on the Tokyo Stock Exchange are trading below book value, opening the door to both activist and strategic investment.

Beneath these financial signals lies a deeper structural story. Japan is facing issues that many other countries will soon encounter—an aging society, declining population, and aging infrastructure. These legacy systems, often highly dependent on human labor, represent urgent social challenges—and untapped market potential for companies offering scalable, tech-enabled solutions.

Where the Opportunities Lie: B2B and B2C Sectors

Infrastructure is emerging as one of the most promising sectors. Japan’s centralized models for water supply, energy, and transportation—built in the 20th century—are becoming increasingly outdated. In their place, decentralized systems such as microgrids or modular water technologies, already common in emerging markets, are becoming viable and cost-effective options even in Japan’s suburbs and regional cities.

In B2C, particularly in healthcare, significant gaps also present clear opportunities. While many countries have adopted telemedicine as a core part of their healthcare infrastructure, Japan continues to rely on in-person consultations. The infrastructure, technology, and user behavior in Japan are ripe for transformation—especially following the global acceleration of digital healthcare during the COVID-19 pandemic.

Looking Beyond Tokyo and Osaka

Foreign companies often focus exclusively on Tokyo and Osaka, but real opportunities lie beyond these megacities. Tier 2 cities like Kumagaya and Takasaki—within easy reach of Tokyo—face real, unsolved problems that can be solved by business solutions: limited public transport, retail decline, food logistics inefficiencies, and more.

These areas have fewer competitors and are underserved by both large incumbents and agile startups. The combination of accessible markets and unmet needs makes them ideal testing grounds for innovative business models. They’re close enough for efficient operations but distant enough to avoid the saturation and competition of the major metros.

Japan’s Innovation Paradox: A Gap to Fill

While Japan is renowned for its technological sophistication, it often excels more in optimization than reinvention. The application layer—making things better—is a strength. But building entirely new ecosystems from scratch requires architectural thinking: the ability to assemble stakeholders, align incentives, and design interconnected platforms.

For example, a functional telemedicine ecosystem needs municipal governments, medical professionals, logistics players, and IT infrastructure to work in unison. This kind of ecosystem orchestration is an area where foreign companies can add exceptional value—and face relatively limited domestic competition.

Keys to Successful Market Entry

Success in Japan starts with the right leadership. A local country manager is essential, but not just anyone—this person must understand Japanese business culture and have global exposure. The danger lies in over-customizing solutions to “fit” Japan in ways that dilute strategic clarity.

What’s truly needed is the ability to draw abstractions, see common patterns across markets, and design frameworks that balance local sensitivity with global scalability. Architectural thinking, not reactive localization, is the key to building relevance and longevity in Japan.

Timing M&A Right

M&A is a powerful—but timing-sensitive—entry strategy. Japanese companies often struggle to grow independently and can benefit from external partnerships. However, acquisitions are rarely welcomed when a company is doing “well enough.”

The optimal window is during inflection points: moments of distress, strategic transition, or the need for digital transformation. At those points, openness to external capital and fresh thinking increases—making it an ideal time for foreign investors to engage.

Bridging Cultural and Organizational Gaps

Understanding how decisions are made is critical. Japanese organizations tend to be bottom-up; even CEOs may lack the authority to drive sweeping change. Contrast this with Western firms, where top-down leadership is more common.

Moreover, identity in Japanese business culture is often tied to membership rather than qualification. Individuals introduce themselves as members of a company, not by their credentials or past achievements. This nuance shapes trust, hierarchy, and relationship-building—elements that foreign companies must respect and navigate carefully.

Conclusion: The Time is Now

Japan may once have seemed inaccessible, but today it is a market ready for change. With long-standing challenges demanding fresh solutions, and with global attention shifting toward resilient, high-potential economies, Japan is regaining its place on the strategic map.

From infrastructure and healthcare to mid-sized regional cities and ecosystem-building, the opportunities are real—and they’re growing. With the right mindset, timing, and guidance, foreign companies can thrive in Japan—not in spite of its complexities, but because of them.

For those ready to take the first step, IGPI stands ready as a trusted partner on the ground.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the authors

Kohki Sakata, CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

Shivaji Das, Managing Director of IGPI Singapore
Shivaji has over 20 years of strategy consulting experience, specializing in New Business Models, Innovation Roadmaps, and Sustainability Journeys. He has worked with private and public sector clients across 25 countries in sectors like Technology, Semiconductors, Chemicals, Healthcare, Renewable Energy, and Construction. Previously, Shivaji was a Partner and Managing Director-APAC at Frost & Sullivan. His paper on Artificial Intelligence was presented at CAINE-2000 in Hawaii, USA. He is the author of seven acclaimed travel, art and business books including The Visible Invisibles and Rebels, Traitors, Peacemakers (both Penguin Random House), as well as The Great Lockdown: lessons learned during the pandemic from organizations around the world (Wiley, USA).
He is an alumnus of IIT Delhi and IIM Calcutta.

About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

Redefining Psychological Safety in High-Performance Cultures

IGPI employs a hands-on approach to strategy execution, ensuring that leadership teams not only develop strategies but implement them effectively. One of the most pressing challenges organizations face today is balancing psychological safety with performance accountability.

It is crucial to understand that psychological safety is not about eliminating stress, but rather creating a culture where individuals feel secure enough to take risks and drive results.

Rethinking Psychological Safety: A Means to an End, Not the Goal Itself

Organizations often focus on psychological safety as an end in itself, equating it with reducing workplace stress and promoting open dialogue. This perspective, however, risks diminishing performance. Companies exist to create value, and psychological safety must be aligned with business objectives. A psychologically safe workplace should enable employees to challenge ideas and contribute meaningfully, not just speak freely. High performance emerges from the intersection of psychological safety and accountability. When these are decoupled, organizations either become too rigid or too permissive — both of which undermine long-term success.

Case-in-point: Google’s Project Aristotle: Balancing Psychological Safety with Performance Accountability

In 2012, Google initiated Project Aristotle, a comprehensive study to understand team effectiveness. The project analyzed data from 180 teams across the company, considering over 250 attributes. Research findings indicated that psychological safety was the most critical factor in team success, outweighing individual performance or team composition. However, Google’s study also emphasized that psychological safety needed to be coupled with clear goals and a culture of dependability to truly drive high performance.

The Critical Role of Feedback in Balancing Safety and Accountability

Leaders often adopt a binary mindset, treating psychological safety and accountability as mutually exclusive. In reality, both must coexist. This balance is achieved through timely and specific feedback. Annual performance reviews have proven ineffective. Feedback must be immediate and actionable, providing concrete examples for improvement. Vague mandates such as “increase sales” or “reduce costs” fail to drive change. Managers must translate objectives into concrete, executable actions.

When leaders provide direct, specific, and constructive feedback, they foster a culture of continuous improvement — where employees feel safe to take risks while remaining accountable for results.

Moving Beyond Quick Fixes: The Manager’s Role in Systemic Problem-Solving

A common leadership pitfall is focusing on immediate problem-solving rather than scalable solutions. Many managers tend to jump to conclusions, solving specific issues instead of designing repeatable frameworks. For instance, if a store experiences a stockout, an inexperienced manager might simply increase inventory orders. A skilled leader, however, would develop a demand-forecasting model that prevents future occurrences across all locations. Effective leadership is about building processes, not just fixing problems.

Successful managers resist the urge for quick fixes and instead establish scalable, generalizable principles that drive sustainable success.

Case-in-point: Toyota’s Production System: The Power of Scalable Solutions Over Quick Fixes

Toyota’s Production System (TPS), developed in the mid-20th century, revolutionized manufacturing by focusing on systemic solutions rather than quick fixes. At its core, TPS emphasizes continuous improvement (kaizen) and respect for people, encouraging employees at all levels to identify and solve problems. This approach led Toyota to develop scalable solutions like the “5 Whys” technique for root cause analysis and the “Just-in-Time” production method. As a result, Toyota not only improved its own efficiency and quality but also set a new standard for manufacturing processes worldwide, influencing industries far beyond automotive.

Mastering the Art of Abstraction: Learning from the Ground Up

A core competency for high-performing leaders is the ability to abstract complexity into clear, structured frameworks. However, abstraction without deep operational understanding leads to flawed decision-making. To make meaningful strategic decisions, leaders must first engage with real-world complexity. This can be achieved through various means:

Without these experiences, strategic decision-making risks becoming detached from reality, leading to frameworks that appear sound on paper but fail in execution.

The Manager as an Organizational Amplifier

The essence of management is organizational augmentation — enabling a company to scale execution beyond individual capability. As teams grow, complexity increases, making information flow and decision clarity more challenging. Managers must design mechanisms for knowledge-sharing, cross-functional collaboration, and decision-making at scale.

This approach aligns directly with IGPI’s methodology for hands-on strategy execution — ensuring that leadership is not just about defining strategy, but actively shaping the mechanisms that drive impact.

Key Takeaways for Executives

IGPI works alongside leadership teams to ensure that these principles are not just understood — but embedded into the fabric of how organizations operate.

Kick-start your transformation journey towards a high-performance culture. Speak with IGPI today to explore how we can elevate your organization’s managerial effectiveness and execution excellence.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the author

Kohki Sakata, CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

 About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

The central takeaway? Competitive advantage in this era will hinge on collaboration rather than control, and on horizontal adaptability rather than vertical dominance.

India’s Digital Transformation

India’s industrial evolution provides a compelling example of adaptive modernization. Historically constrained by infrastructure challenges and bureaucratic hurdles, Indian businesses have overcome these barriers by embedding digital solutions throughout their value chains.

AI-driven manufacturing optimization, cloud-enabled R&D collaboration, and hyper-efficient logistics—such as 15-minute urban deliveries—are now standard practices. What stands out is not just the technology itself but the seamless integration of digital tools with operational agility.

This combination of resourcefulness, adaptability, and digital expertise has enabled Indian firms to scale rapidly and efficiently while sidestepping legacy constraints. For companies aiming to succeed in emerging markets, India’s recent strategies offer valuable insights into future opportunities.

From Globalization to Regionalization: A Strategic Shift

Globalization emphasized frictionless flows of goods, capital, ideas, and people across borders. In contrast, regionalization prioritizes proximity—focusing on shared resources within regions, local responsiveness, and platform-based integration over global sprawl.

Japanese firms, traditionally structured around vertically integrated models, face unique challenges in this transition. The Toyota-style keiretsu ecosystem—built on deep supplier exclusivity and control—is less suited to an environment where flexibility, interoperability, and cross-platform collaboration are paramount. Vertical integration is no longer an unqualified strength. Companies must now realign themselves with horizontally structured ecosystems that emphasize shared infrastructure and decentralized innovation.

India’s Tata Group serves as an illustrative case for legacy firms navigating high-tech industries like defense and electronics. Despite its scale and reputation, Tata has faced challenges in establishing a foothold in these sectors.

Why? Success in high-tech industries today requires more than capital and infrastructure—it demands integration into dynamic innovation ecosystems driven by startups and globally connected R&D. Tata’s struggles highlight a broader issue: legacy organizations often find themselves misaligned with the decentralized and entrepreneurial nature of modern innovation.

The broader lesson for others, including Japan’s trading houses, is clear: success increasingly depends on orchestrating diverse partnerships across corporates, startups, academia, and government rather than relying solely on internal capabilities.

Industries Without Borders: Rethinking Value Chains and Integration

In the regionalization era, traditional industry boundaries are dissolving. The concept of “moving up the value chain” is being replaced by sector convergence and cross-pollination of technologies. Instead of focusing solely on vertical advancement, companies must ask how they can build and manage ecosystems – sustainable competitive advantage will often come from enabling networks rather than owning every component within them.

Japanese trading companies are already adapting to this shift. Their recent growth reflects a deliberate transformation—from resource brokerage to ecosystem enablers—embedding themselves deeply within local contexts while maintaining global reach.

Entering India today requires more than replicating past models. The traditional approach—producing in Japan, exporting to India, and localizing manufacturing later—no longer guarantees success. India now boasts robust infrastructure: digital platforms, skilled talent pools, energy access, and financial inclusion. The challenge lies in co-creating new capabilities with local partners across conglomerates, SMEs, and startups.

Embedding within India’s industrial ecosystem demands shared ownership, mutual learning, and a long-term perspective. Companies that prioritize integration over mere entry will position themselves for sustained relevance and growth.

Precision vs. Speed: A Strategic Balance

India’s business landscape values speed; Japanese firms excel in precision. While these traits are often seen as opposites, they can be complementary. Speed enables responsiveness to market dynamics; precision ensures reliability over time. The key is harmonizing these strengths. Japanese companies can contribute process discipline and engineering rigor to complement India’s agile experimentation-driven approach. Together, these attributes can drive both innovation velocity and operational excellence.

India’s growth is ecosystemic rather than sector-specific. However, certain value chains present particularly strong opportunities for Japanese firms:

Divergent Strengths, Shared Opportunities

Japanese firms often excel at bottom-up operational improvements, while Indian companies adopt top-down approaches marked by boldness and agility. This contrast creates opportunities for synthesis: blending Japan’s operational excellence with India’s dynamic strategy can produce organizations that are both resilient and adaptable.

Historically reliant on manual engineering expertise, Japanese firms must now adapt as tacit knowledge becomes codified into software and AI systems. To remain competitive, they must identify which processes can be digitized while preserving critical human-led elements. Without this clarity, even highly advanced industries risk disruption by software-native competitors.

Co-Creating a New Industrial Model

India and Japan have the potential to pioneer a new industrial paradigm rooted in hardware-software convergence, ecosystem thinking, and regional collaboration.

By combining Japan’s product expertise with India’s agility and entrepreneurial drive across sectors like agriculture or MedTech, both nations can create scalable solutions that serve not only their own markets but also global needs.

In this age of regionalization, competitive advantage will belong to those who master the art of connection—across geographies, disciplines, and mindsets. The future of strategy lies not in building walls but in weaving networks—and those who excel at weaving will lead the way forward.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the authors

Kohki Sakata, CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

Shivaji Das, Managing Director of IGPI Singapore
Shivaji has over 20 years of strategy consulting experience, specializing in New Business Models, Innovation Roadmaps, and Sustainability Journeys. He has worked with private and public sector clients across 25 countries in sectors like Technology, Semiconductors, Chemicals, Healthcare, Renewable Energy, and Construction. Previously, Shivaji was a Partner and Managing Director-APAC at Frost & Sullivan. His paper on Artificial Intelligence was presented at CAINE-2000 in Hawaii, USA. He is the author of seven acclaimed travel, art and business books including The Visible Invisibles and Rebels, Traitors, Peacemakers (both Penguin Random House), as well as The Great Lockdown: lessons learned during the pandemic from organizations around the world (Wiley, USA).
He is an alumnus of IIT Delhi and IIM Calcutta.

 About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

Challenges in Scaling High-Tech Manufacturing

India holds significant potential in high-tech manufacturing, underpinned by its vast domestic market and a deep reservoir of engineering talent. However, several structural challenges continue to impede its ability to compete with established players such as China, South Korea, Japan, and the United States.

One of the most pressing obstacles is access to advanced technology. Unlike its global competitors, India lacks well-developed technology clusters in critical sectors such as semiconductors, aerospace, and medical devices. This reliance on foreign collaborations and technology transfers not only limits autonomy but also creates vulnerabilities in strategically sensitive industries.

Another challenge lies in the absence of a robust high-tech manufacturing ecosystem. India’s industrial base lacks the depth of supply chain linkages and partnerships necessary for rapid scaling. Global firms are often hesitant to collaborate with Indian manufacturers due to limited experience in cutting-edge production. This creates a self-reinforcing cycle where the lack of credentials prevents Indian firms from integrating into high-value global supply chains.

Furthermore, India faces a significant talent retention issue. Despite producing a large number of engineers and technical professionals annually, many migrate to higher-paying markets abroad. This brain drain exacerbates workforce shortages in critical areas of high-tech manufacturing.

Leveraging Low-Tech Success for High-Tech Growth

Despite these challenges, India’s achievements in low-tech manufacturing provide a strong foundation for its high-tech aspirations. By building on this base, India can create spillover benefits that accelerate its transition to advanced manufacturing.

Infrastructure development offers a clear pathway for this transition. Addressing long-standing issues such as energy reliability and logistical inefficiencies will not only benefit low-tech industries but also enhance the viability of high-tech sectors. For instance, improving transport networks and energy supply chains can reduce bottlenecks that hinder high-end manufacturing.

Workforce development serves as another critical bridge between low- and high-tech industries. Structured vocational training programs tailored for low-tech sectors can gradually upskill workers for more sophisticated applications. This approach ensures a steady pipeline of talent capable of supporting India’s high-tech ambitions.

A Shift from Value Chains to Layered Structures

Traditional manufacturing ecosystems have historically been organized around vertically integrated value chains, with tightly linked networks of suppliers, OEMs, and manufacturers. However, the digital revolution has disrupted this paradigm, giving rise to more modular and dynamic production systems.

The smartphone industry exemplifies this shift. Telecommunications providers, software developers, operating system creators, and device manufacturers now operate within distinct yet interconnected layers rather than rigid value chains. This layered structure fosters greater flexibility and efficiency by allowing firms to specialize in specific segments of the value chain.

For India to compete effectively in high-tech manufacturing, it must embrace this new paradigm. Rather than replicating traditional supply chains dominated by established players, Indian firms should focus on identifying lucrative niches within these layered structures. Specialization will enable Indian manufacturers to carve out competitive advantages in global markets.

Strategic Growth Sectors for High-Tech Manufacturing

India’s potential as a high-tech manufacturing leader is most pronounced in sectors where demand is growing rapidly and foundational strengths already exist:

Though in a different context, China’s rapid ascent in high-tech manufacturing offers potential lessons for India’s path forward:

The Role of FDI in High-Tech Growth

Foreign Direct Investment (FDI) will play an indispensable role in advancing the nation’s high-tech manufacturing capabilities. Beyond capital infusion, FDI brings global best practices and cutting-edge technologies that enhance competitiveness. To mitigate risks associated with geopolitical fragmentation, India must diversify its FDI sources by engaging with multiple countries.

Policy and Business Leadership: Charting the Path Forward

To attract global investors and technology partners, Indian policymakers must address regulatory complexities that deter foreign firms. Simplifying tax structures and easing compliance requirements will create a more conducive environment for investment.

Equally important is fostering competition rather than overprotectionism. Industries shielded by excessive government intervention often struggle to remain globally competitive. Encouraging open competition will drive innovation and efficiency across sectors.

India possesses the market size, talent pool, and industrial foundation needed to emerge as a global leader in high-tech manufacturing. Success will hinge on its ability to overcome structural challenges while leveraging opportunities through strategic investments and policy reforms. By embracing modular industry structures and drawing lessons from global best practices, India can position itself at the forefront of the high-tech revolution. The next decade will be pivotal—will India rise to meet the challenge?

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the authors

Kohki Sakata, CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

Shivaji Das, Managing Director of IGPI Singapore
Shivaji has over 20 years of strategy consulting experience, specializing in New Business Models, Innovation Roadmaps, and Sustainability Journeys. He has worked with private and public sector clients across 25 countries in sectors like Technology, Semiconductors, Chemicals, Healthcare, Renewable Energy, and Construction. Previously, Shivaji was a Partner and Managing Director-APAC at Frost & Sullivan. His paper on Artificial Intelligence was presented at CAINE-2000 in Hawaii, USA. He is the author of seven acclaimed travel, art and business books including The Visible Invisibles and Rebels, Traitors, Peacemakers (both Penguin Random House), as well as The Great Lockdown: lessons learned during the pandemic from organizations around the world (Wiley, USA).
He is an alumnus of IIT Delhi and IIM Calcutta.

 About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

India’s High-Tech Struggle

India’s early industrialization efforts in the 1950s and 1960s were state-driven, with a heavy reliance on public sector enterprises in industries such as steel, aerospace, and defense manufacturing. However, this approach led to systemic inefficiencies, an absence of competitive pressure, and limited access to cutting-edge technology.

Additionally, India’s economy remained highly protectionist, restricting foreign investments and market competition. With limited exposure to global best practices and a constrained talent pool in high-tech fields, the country struggled to establish a meaningful presence in advanced manufacturing. The result was a missed opportunity in high-tech sectors, with India unable to capitalize on its early ambitions.

Case of India’s Pharmaceutical Industry: Competing Without Vertical Integration

In stark contrast to its high-tech struggles, India’s pharmaceutical industry thrived despite lacking full vertical integration. The turning point came as global drug patents expired, opening opportunities for low-cost generic manufacturing. Initially reliant on European and Japanese suppliers for raw materials, Indian firms later leveraged Chinese manufacturers for cost-effective inputs, allowing them to scale rapidly.

This layered approach—focusing on specific segments of the value chain rather than attempting full vertical integration—enabled India to dominate the global generic pharmaceutical market. By specializing in cost-efficient manufacturing and regulatory expertise, Indian firms carved out a niche in a heavily commoditized industry, demonstrating that strategic positioning within a value chain can sometimes outweigh full control over it.

Case of India’s Toy Industry: From Niche to Emerging Giant

For decades, China dominated the global toy industry, particularly in South China, controlling over 80% of global market share. However, India has recently emerged as a challenger, driven by a combination of government protectionist policies, a booming domestic market, and localized product innovation.

Historically, India had a strong domestic toy industry focused on traditional, handcrafted toys, but lacked large-scale manufacturing capabilities. Recent government incentives, coupled with rising middle-class purchasing power, have enabled Indian manufacturers to scale up production and cater to both domestic and international markets. Unlike China, which dominates through mass production, India is differentiating itself by leveraging its cultural heritage—customizing toys to reflect regional preferences and traditional aesthetics.

This success reflects India’s broader industrial strategy: leveraging domestic strengths to create export opportunities, rather than directly competing with China’s economies of scale.

The Role of Conglomerates in Low-Tech Manufacturing

India’s industrial conglomerates have played a defining role in shaping the country’s manufacturing landscape, but their origins differ significantly from their Chinese counterparts.

While Chinese conglomerates often trace their roots to banking, finance, or real estate, Indian business houses emerged from trading and commerce. Historically, trading families from Gujarat, Rajasthan, and the Parsi (Iranian) diaspora built extensive networks with the Gulf, Africa, and Europe, later expanding into manufacturing and industrial sectors.

When India’s economy was heavily regulated, these conglomerates diversified across multiple industries to navigate restrictions and survive. However, post-liberalization, many of them restructured and consolidated, focusing on sectors where they could achieve global competitiveness.

This evolution has created a fundamental difference in industrial structures:

This structural distinction has implications for India’s future in high-tech manufacturing—can it replicate China’s model, or should it refine its own unique approach?

Government Policies and Their Impact on Low-Tech Manufacturing

The Indian government has been both an obstacle and a catalyst for manufacturing growth. In the past, high import tariffs and nationalization efforts sheltered domestic industries but limited their competitiveness. Today, however, India has embraced a more market-driven approach, introducing:

These policies have lowered costs, improved supply chain efficiency, and incentivized foreign investments, making India a more attractive manufacturing hub.

India’s biggest advantage is its massive domestic market, which few low-tech manufacturing hubs can match. Unlike countries such as Bangladesh (focused on textiles) or Vietnam (electronics), India benefits from sectoral diversity, spanning pharmaceuticals, petrochemicals, medical devices, and even aerospace.

This breadth of expertise allows India to compete across multiple verticals, rather than being dependent on a single industry. Additionally, India’s labor force, while still in transition, offers a balance between cost competitiveness and technical capability.

Looking Ahead: India’s High-Tech Manufacturing Challenge

India’s manufacturing landscape today is split into two parallel worlds:

While large corporations have embraced Industry 4.0 innovations, smaller enterprises remain largely untouched by digitalization. Bridging this gap is crucial for India’s broader industrial transformation. To stay competitive, India must accelerate digital adoption at all levels—integrating small-scale manufacturers into modern supply chains and enabling them to compete globally.

The low-tech industrial foundation has provided it with a strong cost-competitive base, but its future lies in scaling high-tech industries. The transition from horizontal diversification to vertical specialization will require:

As India positions itself for the future, the central question remains: Can India replicate China’s vertically integrated manufacturing success, or will it forge its own distinct, layered approach? The answer to this will define India’s global industrial role in the decades ahead.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the authors

Kohki Sakata, CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

Shivaji Das, Managing Director of IGPI Singapore
Shivaji has over 20 years of strategy consulting experience, specializing in New Business Models, Innovation Roadmaps, and Sustainability Journeys. He has worked with private and public sector clients across 25 countries in sectors like Technology, Semiconductors, Chemicals, Healthcare, Renewable Energy, and Construction. Previously, Shivaji was a Partner and Managing Director-APAC at Frost & Sullivan. His paper on Artificial Intelligence was presented at CAINE-2000 in Hawaii, USA. He is the author of seven acclaimed travel, art and business books including The Visible Invisibles and Rebels, Traitors, Peacemakers (both Penguin Random House), as well as The Great Lockdown: lessons learned during the pandemic from organizations around the world (Wiley, USA).
He is an alumnus of IIT Delhi and IIM Calcutta.

 About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.

Key Drivers of Regionalization

Two major forces are accelerating the move toward regionalization. The first is the digital revolution, or what can be called the smartphone revolution in emerging markets. Today, nearly everyone has a powerful computing device in their hands, enabling new business models that were previously impossible. Digital platforms allow companies to localize services dynamically, adapting to the needs of regional consumers in real time.

The second key driver is global decoupling, caused by geopolitical tensions and economic realignments. Trade barriers, sanctions, and shifting regulatory environments have made it more difficult for companies to operate under a single, unified global strategy. Instead, businesses are adopting regionalized approaches, leveraging local champions such as CP Group in Thailand and Mahindra Group in India, as well as fast-growing unicorns that are reshaping local economies.

The Changing Nature of Manufacturing and Supply Chains

The digital revolution is also disrupting traditional manufacturing models, making vertical integration less relevant. The automotive industry offers a prime example. With the rise of electric vehicles (EVs), components have become increasingly modularized, reducing complexity in supply chains. Unlike traditional gasoline-powered vehicles, which require thousands of intricate parts, EVs rely on fewer, more standardized components.

This modularization has enabled startups and regional players to enter the market with specialized designs, sourcing components globally and focusing on assembly and service differentiation. At one point, China had over 500 EV manufacturers, illustrating how a shift away from vertically integrated models can foster greater innovation and competition.

For Japanese, European, and U.S. multinational companies, this shift requires a reassessment of how they structure their supply chains and operations. The old model—where companies designed a product centrally and exported it globally—is giving way to regional manufacturing ecosystems where businesses must tailor their offerings based on localized consumer demand and regulatory conditions.

Adapting to Regionalization: A New Approach for MNCs

As regionalization accelerates, MNCs must redefine how they position themselves in these new ecosystems. The key challenge is no longer just about producing the best products but about delivering localized services efficiently.

In the past, a company like Toyota could build a globally standardized car like the Corolla and sell it across multiple markets. Today, businesses must design services and customer experiences tailored to specific regional needs, which requires closer collaboration with local partners.

Japanese companies, in particular, need to shift away from value chain-based thinking and instead adopt a layered approach to market entry. In Southeast Asia, Japanese firms have traditionally built vertically integrated supply chains similar to their domestic models. However, this approach has not worked as effectively in India, where business conditions and consumer preferences differ significantly. Rather than replicating the Suzuki-Maruti model—which successfully built a localized automotive supply chain in India—new entrants must adopt more flexible business models, aligning themselves with regional market structures and emerging business layers.

ASEAN vs. India: Distinct Approaches for Regional Success

ASEAN has long operated as a regional economic bloc, where companies naturally adopt regional approaches to manufacturing and supply chains. India, however, has traditionally functioned as an independent market, but its role in the regionalization movement is now evolving.

For Japanese firms, ASEAN has historically been seen as an extension of their home market, allowing them to replicate Japan-style vertical integration across the region. India, in contrast, requires a fundamentally different strategy – Japanese companies entering India must move beyond value chain thinking and instead analyze which layers of the economy they should focus on. The competitive dynamics and consumer behaviors in India are distinct from ASEAN, requiring new business models, localized strategies, and stronger local partnerships.

Lessons from Suzuki and the Need for a New Strategy

Suzuki’s success in India came from building a vertically integrated supply chain, establishing deep control over local production. While this model worked well for Suzuki, it is not necessarily replicable for other industries or new market entrants.

Traditional Japanese manufacturing firms are accustomed to deeply integrated supplier networks, where tier-one, tier-two, and tier-three suppliers exclusively serve a single OEM. However, in a regionalized economy, companies must instead determine which layer of the value chain they excel in and adapt accordingly.

For example, Japanese firms entering India today may find greater success by focusing on specific segments of a layered market rather than attempting to build and control an entire supply chain. The ability to identify core competencies—whether in manufacturing, software, or services—and integrate them into regional ecosystems will be critical for future success.

Navigating Geopolitical Tensions through Business Intelligence

Geopolitical tensions have become a dominant factor shaping business strategy. In the past, corporate leaders assumed that political changes had minimal impact on economic decision-making, but the events of recent years have shown that this assumption no longer holds.

For Japanese firms accustomed to fully integrated, self-controlled supply chains, adapting to geopolitical uncertainty requires two key shifts. First, companies must build robust business intelligence capabilities that go beyond simply tracking political events. They must actively analyze where global resources, talent, and supply chain opportunities exist.

For instance, a recent project analyzed global AI talent distribution and identified regions with emerging AI expertise that had not previously been considered strategic hubs. This type of intelligence gathering is essential for companies looking to navigate geopolitical risks while optimizing their operations globally.

Second, Japanese firms must embrace open innovation and collaborative supply chains rather than focusing solely on self-contained, vertically integrated networks. In a world of regionalized trade and shifting alliances, building strategic partnerships across multiple geographies will be key to reducing risk and maintaining resilience.

Conclusion: Rethinking Global Strategies for a Regionalized Future

The shift from globalization to regionalization is reshaping how companies operate across industries. Digital transformation and geopolitical realignments are making traditional value chain approaches obsolete, forcing companies to adopt more flexible, layered business models.

For Japanese, European, and U.S. firms, success in this new era will depend on their ability to localize services, adapt supply chains, and form strategic partnerships within regional economies. Companies must move beyond product standardization and instead focus on layered market strategies, identifying their core strengths and leveraging them in specific regional contexts.

The most successful firms will be those that combine digital intelligence, supply chain flexibility, and regional collaboration, positioning themselves as key players in the evolving global economic landscape.

At IGPI, we have extensive experience supporting multinational corporations in navigating the complexities of regionalization by optimizing supply chains and adapting business models to localized market needs. Our understanding of the interplay between digital transformation, geopolitical tensions, and regional market dynamics allows us to provide tailored strategies that enhance operational flexibility and resilience in a rapidly evolving global landscape.

To find out more about how IGPI Group can provide support for businesses, browse through our insight articles or get in contact with us.  

About the authors

Kohki Sakata, CEO of IGPI Singapore
After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation where he managed projects on global expansion and turnaround in various sectors including F&B, healthcare, retail, IT, etc. After joining IGPI, he has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that has been developed in Western countries, he has developed multiple methods to turnaround Asian companies with focus on setting clear vision and employee empowerment. Kohki has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management.
He graduated from Waseda University Department of Political Science and Economics and IE Business School.

Shivaji Das, Managing Director of IGPI Singapore
Shivaji has over 20 years of strategy consulting experience, specializing in New Business Models, Innovation Roadmaps, and Sustainability Journeys. He has worked with private and public sector clients across 25 countries in sectors like Technology, Semiconductors, Chemicals, Healthcare, Renewable Energy, and Construction. Previously, Shivaji was a Partner and Managing Director-APAC at Frost & Sullivan. His paper on Artificial Intelligence was presented at CAINE-2000 in Hawaii, USA. He is the author of seven acclaimed travel, art and business books including The Visible Invisibles and Rebels, Traitors, Peacemakers (both Penguin Random House), as well as The Great Lockdown: lessons learned during the pandemic from organizations around the world (Wiley, USA).
He is an alumnus of IIT Delhi and IIM Calcutta.

 About IGPI

IGPI Group is a Japan rooted premium management consulting & Investment Group headquartered in Tokyo with a footprint in Osaka, Singapore, Hanoi, Shanghai & Melbourne, as well as parts of Europe and India. The organization was established in 2007 by former members of the Industrial Revitalization Corporation of Japan (IRCJ), a USD 100 billion sovereign wealth fund focusing on turn-around projects in Japan. IGPI Group has 13 institutional investors, including Nomura Holdings, SMBC, KDDI, Recruit & Sumitomo Corporation to name a few. IGPI Group has vast experience in supporting Fortune 500s, Govt. agencies, Universities, SMEs and funded startups across Asia and beyond for their strategic business needs and hands-on support across a wide variety of industries. IGPI group has ~8,500 employees on a consolidated basis.

* This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.