The South China Sea is often in the news as a geopolitical and economic hot-spot. What are the factors that make this region so strategically important, and what lessons does this have for business growth? Here are some key factors:

  • The South China Sea has valuable resources in place: There is much talk about oil and gas, but maybe even more important are the fisheries, which are fundamental to the food security of hundreds of millions of people, and the employment of perhaps 4 million.
  • It’s at the centre of an important network: A quarter of the world’s shipping transits through its waters, and according to the US Department of Energy, that includes a third of the trade in global crude oil and half of that for liquid natural gas.
  • It’s a potential staging post for military missions in the surrounding region: The coral ‘islands’ are an ideal base from which to deploy air and seaborne forces to any future conflicts in one of the fastest developing parts of the world.

These three dimensions – resources in place, centre of a network, and potential staging post to ‘hot’ regions – are useful ones to consider when you’re thinking about innovation and growth. For example:

  • Where do you have valuable resources already in place just waiting for you to tap? Amazon built its computing infrastructure to run its online shopping business. Then it realized it could commercialise the infrastructure it had already built, creating Amazon Web Services.
  • What networks can you gain pivotal positions in? By moving from conventional artist management into talent shows, Simon Cowell has moved into a pivotal position in the web of relationships that make up the industry, creating the route-to-stardom of choice for just about every aspiring popstar in the world.
  • What positions can you establish which will enable you to respond to unfolding events if they occur? Companies such as Google Ventures take ownership stakes in all sorts of startups.

Andy’s Advice. Here are three great questions to ask, for example at a team awayday: What have you got really good at as a side-effect of doing business that you could offer to others as a service? How can you use your position in your network of relationships with customers, suppliers, experts and others to offer new value? Where are potential future hot-spots for which you should scope out your staging posts now?

 


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