Growing with intent
HLB Survey of Business Leaders 2026 - APAC outlook
A confident region navigating complexity
The Asia Pacific (APAC) region enters 2026 in a position of relative strength. Regional GDP growth outperformed in 2025, driven by strong exports, firm domestic consumption, and sustained digital investment. Confidence has followed. In APAC, 41% of leaders say they are very confident in their ability to grow revenue this year, up from 35% a year earlier and the highest level recorded since the survey began.
This optimism sits alongside a narrower risk radar. Compared with global peers, APAC leaders are concerned by fewer disruption vectors. Inflation is the principal risk, cited by 67% of respondents. In Japan, price pressures have persisted amid a weaker yen and poor crop yields in 2024. Even so, JP Morgan expects inflation to stabilise near 2% in 2026, in line with the Bank of Japan’s long-term target. Across the region, the International Monetary Fund forecasts consumer price inflation to average around 3.1% through 2026, easing pressure on businesses and consumers alike.
Cybersecurity concerns are comparatively lower in APAC than globally. While 67% of leaders flag cyber risks, this compares with 75% worldwide, pointing to stronger digital preparedness. The Cyber Security Agency of Singapore has become a benchmark for other governments by launching a comprehensive national framework that combines regulation, industry collaboration and forward-looking guidance, including AI security principles, an expanded IoT labelling scheme covering more than 550 products, and early preparation for quantum-era threats.
Trade dynamics
of leaders are feeling the pressures of trade flow disruption
Trade dynamics, however, are increasingly complex. The World Trade Organisation expects global trade volume growth to slow sharply from 2.4% in 2025 to just 0.5% in 2026 as the impact of tariffs feeds through, weakening export momentum after a strong 2025. Yet, China has reported a record trade surplus of $1.189 trillion in 2025. Beneath the headline slowdown, trade is diverging by sector. AI-related products drove global trade growth in early 2025, rising by more than 20% year-over-year, with Asia accounting for nearly two-thirds of the increase.
By contrast, non-AI trade has struggled to grow beyond 4%, reflecting weak investment outside the technology sector. Services provide a partial offset, with Asia’s commercial services exports expected to grow by 5.5% in 2026, supported by demand for AI, cybersecurity and digital services.
Still, growth expectations across the region are uneven. East Asia’s expansion is projected to ease from 4.9% in 2025 to 4.4% in 2026 and 2027. South Asia, by contrast, is expected to grow by 5.6% in 2026 and 5.9% in 2027, according to the United Nations World Economic Situation and Prospects 2026.
Despite these cross-currents, sentiment in APAC remains comparatively upbeat. For now, Asia’s combination of technological strength, services momentum, and relative macro stability continues to underpin confidence and profitability. Compared to last year, profit margin declines were 2.5 times less common among APAC companies, while 31% of respondents posted a profit margin increase of 5% or more.
Three priorities for business leaders in 2026
APAC leaders enter 2026 with clearer priorities. Three approaches now dominate how they plan to grow amid shifting market conditions.
Balancing conviction with flexibility in planning
To sustain momentum into 2026, APAC leaders are placing renewed emphasis on how they plan and execute. Rather than chasing short-term signals or reacting to market noise, most are opting for steadier, more deliberate approaches.
In the region, 73% of businesses operate on planning cycles of one to four years, compared with 61% globally. This propensity towards longer horizons reflects the structure of the APAC economy, where manufacturing, capital-intensive industries, and large-scale transformation programmes remain prominent.
Comprehensive planning is therefore more prevalent. A slim majority of APAC leaders, 51%, favour end-to-end planning strategies, versus 40% of their global peers. Yet this does not imply rigidity. Instead, long-term plans are increasingly paired with adaptive mechanisms that allow leaders to respond as conditions shift. This combination reflects the need to balance long investment cycles with volatile external conditions.
Planning cycles
of APAC leaders have 3-4 year planning cycles, while only 12% have a 6-12 month cycle.
of APAC leaders have 3-4 year planning cycles, while only:
- 7% of leaders use a continuous planning approach
- 12% of leaders have a 6-12 month cycle
- and 35% in the region have 1-2 year cycles
The logic is clearest among profit accelerators, companies that grew margins by five to ten per cent over the past year. Within this group, 60% combine adaptive planning with comprehensive long-term frameworks, while 47% also rely on formal decision tools and matrices.
The result is a planning model that provides strategic direction without constraining tactical responsiveness. In markets shaped by cyclical demand, shifting trade conditions, and rapid technological change, this balance has become a source of competitive advantage.
Take Xiaomi. Its entry into electric vehicles may appear sudden, but it was the result of deliberate long-term planning. The company launched its EV division in 2021, committing USD 10 billion over a decade, matching the scale of investment deployed by Apple before it later cancelled its own EV programme. This long-term capital commitment reflected strategic conviction rather than opportunism.
Execution then moved quickly. Xiaomi repurposed existing factories, deployed heavy automation and focused on a limited number of models to control costs and accelerate scale. In Xiaomi’s body workshop, all key production processes are fully automated, with overall automation exceeding 90%.
The result was rapid payback: its EV business reached profitability within 19 months, with deliveries exceeding 500,000 units by the end of 2025. The lesson lies in sequencing. Long-term intent set the direction, while adaptive execution delivered speed and returns.
In a region where growth remains comparatively strong but external conditions are less predictable, planning cycles are no longer defined by duration alone. What distinguishes higher performers is not how far ahead they plan, but how effectively they translate conviction into action while retaining the ability to recalibrate when the environment demands it.
Strengthening the core to enable profitability
When it comes to execution, APAC leaders are concentrating on fundamentals. As with global peers, over half plan to improve operational efficiency over the next 12 months as a primary route to growth. At the same time, commitment to adopting new digital technologies remains high.
The two priorities are closely connected. In capital-intensive operating environments, technology has become a prerequisite for speed, consistency, and scale. For instance, Samsung has recently partnered with NVIDIA to transform its manufacturing processes.
By applying NVIDIA’s cuLitho and CUDA-X libraries to optical proximity correction, Samsung has achieved a 20-fold improvement in computational lithography performance during chip production. This has materially shortened development cycles and improved yield predictability. The collaboration also extends to GPU-accelerated design tools and digital twins, enabling predictive maintenance and process optimisation before changes are applied on the factory floor.
Alongside technology, people remain the third pillar of execution. APAC leaders are placing greater emphasis on workforce investment than their global peers. While access to labour is not a systemic constraint across the region, the availability of specialised skills increasingly is.
Governments and businesses are responding in parallel to address the issue. In Japan, a new financial support scheme introduced in late 2025 allows working individuals to take temporary leave to acquire new skills, with wage replacement of up to 80% funded through employment insurance. In Australia, the Future Skills Organisation has partnered with Microsoft to launch a national AI skills accelerator, targeting both learners and more than 30,000 vocational educators.
New skills are required to support growth ambitions. Compared with global peers, APAC leaders are more assertive on new product development. Forty-five per cent plan to launch new products or services this year, versus 39% globally. Among profit accelerators, the figure rises to 57%, with many also investing in new market segments. Notably, these growth ambitions coexist with continued cost discipline. In practice, emerging technologies are helping leaders innovate at scale without significantly increasing their runways.
Leaders report growing emphasis on both functional performance and emotional value.
Customers now attach more importance to emotional value and social responsibility, and are more inclined to choose brands that actively practice social responsibility and are consistent with their own values.”
CFO at a Real Estate & Construction industry
Similarly, leaders report growing emphasis on both functional performance and emotional value, alongside heightened sensitivity to social responsibility.
To respond to shifting customer demands, 66% of APAC leaders are increasing investment in customer analytics, segmentation, and personalisation. A further 62% are pursuing customer-driven innovation, integrating feedback earlier in the product development cycle to reduce the risk of misdirected investment.
The approach is increasingly structured. In Thailand, Tetra Pak opened a new Customer Innovation Centre in 2025, designed to accelerate product and business model development. Its five-step model combines insight discovery, category immersion, global innovation showcases, co-creation spaces, and rapid prototyping. The objective is to shorten the path from concept to market while anchoring decisions in real consumer needs.
Across APAC, execution is shifting away from stand-alone initiatives towards better alignment. Operational efficiency, digital capability, skills and customer insight are increasingly treated as connected levers rather than separate priorities. Leaders who bring these elements together are better placed to grow while keeping costs under control in a tougher operating environment.
Navigating the technology momentum and its limits
Continuous investment in technology remains a defining priority for APAC leaders. Over the past decade, many economies in the region have moved rapidly from low digital penetration to high levels of internet adoption and digital literacy. This foundation is now translating into deeper technological capability, particularly in artificial intelligence.
China’s position has strengthened further. DeepSeek R1 delivered strong reasoning performance with far lower training costs, pointing to more efficient AI models. At the same time, so-called “AI tiger” start-ups such as MiniMax and Zhipu AI made strong debuts on the Hong Kong Stock Exchange in early 2026, signalling investor confidence in applied AI business models.
Progress is also visible at the hardware frontier. China has completed a working prototype of an extreme-ultraviolet lithography machine that could, in time, rival Western chip-manufacturing systems. This development points to growing ambition across the semiconductor value chain.
Regional businesses have become eager AI ‘consumers’. They’re twice as likely as global peers to use AI in some form, with fewer organisations reporting no adoption at all. Maturity is also higher across use cases. Leaders are more likely to deploy AI for quality control, now the region’s most common application, and more likely to use it for employee training and development. Overall, AI is embedded across a broader range of functions, reflecting both operational need and, in some markets, a less restrictive regulatory environment.
The AI Momentum is set to continue through 2026. Huawei has enlisted eleven carmakers to support its self-driving safety initiative, with its Qiankun advanced driving system now installed in more than one million vehicles, including the newly launched Audi A5L.
In India, Google has partnered with the Health Foundation Models initiative to improve healthcare efficiency and patient outcomes. Early work involves the development of AI models for India-specific dermatology and outpatient triage use cases. Researchers from the Indian Institute of Science are exploring broader clinical applications, while the models developed will contribute to India’s Digital Public Infrastructure.
Leaders are responding decisively. Sixty-three per cent plan to increase investment in data security this year, rising to 78% among profit accelerators. A similar pattern is evident in customer data protection, with 54% of all respondents and 74% of profit accelerators allocating additional resources. As digital maturity deepens across APAC, the capacity to secure data and systems is becoming as strategically important as the technologies themselves.
At the firm level, leaders ambition reflect confidence in technology as a lever for speed and precision.
AI investment
The rapid advance in digital capability, however, carries clear risks. Cybersecurity has intensified across the region. In particular, APAC recorded a 142% year-on-year increase in attacks involving synthetic personal data, driven by more sophisticated AI-enabled fraud techniques, according to the Annual Sumsub Report. Synthetic identities now account for nearly 16% of all fraud attempts, making them the region’s third-largest fraud category. Around 69% of businesses and 53% of consumers report having experienced fraud, underlining the scale of exposure.
Leaders are responding decisively. Sixty-three per cent plan to increase investment in data security this year, rising to 78% among profit accelerators. A similar pattern is evident in customer data protection, with 54% of all respondents and 74% of profit accelerators allocating additional resources. As digital maturity deepens across APAC, the capacity to secure data and systems is becoming as strategically important as the technologies themselves.
How profit accelerators* stand out in APAC
In APAC, the most profitable companies share a distinct set of behaviours that separate disciplined growth from opportunistic expansion.
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They plan for the long term, but decide with flexibility. Unlike global peers, APAC profit accelerators are more likely to operate on one- to four-year planning horizons as they pursue capital-intensive and transformational initiatives. At the same time, they are 1.4 times more likely than less profitable regional peers to rely on adaptive planning. Decision-making is more pluralistic, with greater use of options analysis and consensus-driven frameworks, rather than purely centralised, executive-led control.
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They expand while tightening the cost base. Profit leaders are markedly more ambitious on growth. They are 1.4 times more likely to launch new products or services in 2026 and 1.6 times more likely to invest in new markets or segments. Notably, they are also ten percentage points more likely than peers to pursue cost reduction in parallel, suggesting heavier reliance on technology, automation, and operating leverage to fund expansion.
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They embed the customer more deeply into execution. APAC profit accelerators make systematic use of customer insight. They are 1.4 times more likely to deploy formal customer feedback programmes, alongside higher investment in analytics, segmentation, and personalisation. This reduces the risk of misaligned product bets and improves the odds of commercial success as customer expectations continue to shift.
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They treat cybersecurity as a growth enabler, not a constraint. Compared with peers, profit accelerators place greater emphasis on cyber resilience. They are 1.6 times more likely to address cybersecurity weaknesses over the next 12 months, reflecting recognition that digital adoption and security must advance together. As a result, they are allocating more capital to security technologies and data protection capabilities.
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They apply AI where it moves the needle. Profit leaders are deploying AI beyond basic use cases. Quality control, risk management, and process automation rank as their top applications, pointing to more advanced integration into core operations rather than isolated experimentation.
*Profit accelerators are those who reported increased profit margins by five per cent or more over the past 12 months.
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