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Hong Kong, China (11 October, 2018) – Hong Kong and Mainland China industries are currently experiencing dramatic shifts in business practices. Those shifts may provide important lessons for reducing one of the region’s greatest economic and social threats: smoking-related deaths. This was one of the major insights that was discussed during the “Learning from Disruption” forum hosted today by The Economist Corporate Network.

Smoking-related deaths are expected to surge in the coming decade as the region’s population ages. It is imperative that tobacco consumption, policies, and business practices evolve quickly to embrace alternatives to combustible tobacco. The forum examined how industry transformation in a variety of sectors—including energy, finance, and technology—could yield important lessons for accelerating changes to the tobacco market in Hong Kong and Mainland China.

“What was previously unimaginable just a few years ago is happening today, thanks to novel and truly disruptive technologies,” said Derek Yach, President of the Foundation for a Smoke-Free World. “Every sector of society is undergoing transformation, and the tobacco industry is no exception. As consumers seek healthier lifestyles, legacy industries are shifting to business models that emphasize cleaner alternatives for their operations and products.”

As part of the forum, the Foundation for a Smoke-Free World released two white papers: “Business Transformation: An Analysis of Case Studies Relevant to Achieving a Smoke-Free World,” and “Global Trends in Nicotine.” The papers examine how changes in global industries can provide important insights on tobacco industry disruption and evaluate the largest nicotine delivery companies in the world. This research is part of the Foundation’s broader efforts to accelerate the development of better harm reduction and smoking cessation practices around the world. This forum is the first in a series of global symposia that the Foundation plans to hold on topics related to the disruption of the tobacco industry.

There are about 1.1 billion smokers in the world today, and 315 million smokers are in China. While smoking prevalence is declining globally, tobacco use is increasing in some low- and middle-income countries, notably among the most vulnerable populations. The purpose of the Foundation for a Smoke-Free World is to improve global health by ending smoking in this generation. To that end, it is working with various stakeholders, including researchers and public health advocates, on solutions to help people quit smoking or switch to reduced-harm products, relative to combustible tobacco. Furthermore, the Foundation’s Agricultural Transformation Initiative aims to diversify tobacco-dependent economies, preparing smallholder tobacco farmers to shift to alternative livelihood crops ahead of an era of significantly reduced demand for tobacco leaf.

“China, notably, stands out for pioneering many of these industrial changes,” said Robert Koepp, Director, The Economist Corporate Network. “To benefit from, rather than be victimized by, such fundamental transformations, requires that we learn lessons from disruption. Other than the rewards that investors and executives can reap, how can people in society gain as well? In other words, how can lessons from industrial disruption be applied to improving quality of life? These are some of the questions we sought to answer with this distinguished panel.”

“Our goal is to foster discussion on the transformational possibilities for the global tobacco industry and nicotine ecosystem to achieve a smoke-free world in this generation,” said Yach. “We invite all stakeholders to join this conversation that embraces the inevitable outcome—the elimination of the combustible cigarette—and the adoption of industry transformation. Tobacco companies in Asia and elsewhere have an opportunity to embrace business models that will lead to a world without combustible cigarettes.”

About the Foundation for a Smoke-Free World, Inc.

The Foundation for a Smoke-Free World is an independent, nonprofit organization with the purpose of improving global health by ending smoking in this generation. The Foundation supports its mission through three core pillars: Health, Science, and Technology; the Agricultural Transformation Initiative; and Industry Transformation. The Foundation’s Health, Science, and Technology work complements ongoing tobacco control efforts and focuses on countries where most smokers live, bringing a smoker-oriented agenda to accelerate quitting and switching to reduced-harm products. The Agricultural Transformation Initiative aims to diversify tobacco-dependent economies, and the Foundation’s Industry Transformation efforts focus on attaining change within the entire global tobacco industry and nicotine ecosystem.

The Foundation has received from Philip Morris International (PMI) a pledge of $80 million annually for 12 years, which began in 2018. Under the Foundation’s bylaws and Pledge Agreement, PMI and the tobacco industry, generally, are precluded from having any control or influence over how the Foundation spends its funds or focuses its activities. The Foundation’s acceptance of the annual pledge does not constitute an endorsement by the Foundation of any of the pledger’s products.

For more information about the Foundation, please visit www.smokefreeworld.org.

About the Economist Corporate Network

The Economist Corporate Network (ECN) is The Economist Group’s advisory service for senior executives and business world influencers seeking insight into economic and business trends across markets and regions. Independent and thought-provoking, ECN provides clients with the information, insight, and interaction they need to succeed. It is led by experts who share a profound knowledge and understanding of both regional and global business issues, with business groups based in Asia-Pacific, the Middle East, and Africa. Through our tailored blend of high-caliber research, interactive meetings and briefings, The Economist Corporate Network delivers country-by-country, regional, global, and industry-focused analysis on both current and forecast conditions.

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