Disruptive Innovation: How Asia Is Positioned to Beat US & Europe in Innovation
Asia is a shining star. It’s an economic area that’s been a little late to the party, but it’s an entrant that can’t help but make heads turn. In an other drab economic landscape across the U.S and Europe, Asia comes in hot. The South-east Asian Economy stayed resilient during the global financial crisis and sees an average annual GDP of 5% to 8%.
Simplistically speaking, economies thrive where more people live. Talk about population, Asia is testimony to the largest accumulation of human population.
According to Sylvia Vorhauser-Smith, a contributor at Forbes, Asia will account for 45% of the estimated world population and houses 10 of the fastest growing megacities in the world.
Asia is also home to 63% of the 440 fastest emerging cities in the world, adding a billion new customers and brining in an excess of $10 trillion to the global economy, thanks to all this swell.
South-east Asia is seeing rapid urbanization and the sheer size of the population will only be below 30 years of age on average – a steady stream of young, energetic workforce that will only grow better and more experienced with time.
On a bird-perched-on-a-tree point of view, Asia still lacks the finesse that US and Europe have when it comes to innovation management. The entire innovation infrastructure – from academics to businesses; from patents to intellectual property is still not as robust and well-developed as it is in US and Europe.
Plus, there are a slew of problems with Asia as a whole that need to be addressed. Hugo Swire – The Minister of State for the Foreign and Commonwealth Office — gave a keynote speech at the Asian Business Leaders award 2015 and he believes that:
“Asia has the potential to be the engine of the free trade globally”
Think global innovation and it’s Asia that’ll drive a huge part of that movement. In the year 2012, total foreign direct investment into emerging economics exceeded that into advanced countries for the first time. Shift of global innovation is clearly drifting to Asia.
Advanced economics still see huge research budget cuts. Meanwhile emerging economies fare better. While overall funding considerably slowed by 2014 (Global R & D Forecast 2014), Asia is relatively doing better. In fact, by the end of 2015, Asia’s share of Global Research & Development is expected to climb 40%.
The countries that encompass North American Free Trade Agreement namely: US, Canada, and Mexico have been displaced as the leading group as far as R & D is concerned.
Clearly then, Asia has potential. But true innovation in Asia still won’t be what it relly can be until many factors come together: Intellectual Property protection, strong legislation, better infrastructure, a thriving business-centric climate, pro-business alignment from respective governments, and more.
While Asia and its growth story will continue, the definite disruption in this arena is so deep and broad that the west will simply deny it (just like the US collectively dismissed the impact Japanese automobile imports could have on the big three automotive companies in Detroit).
I am looking at this scene closely and it’d be interesting to see what’s bound to happen, how the Asian growth story would emerge, and which countries in particular will surge ahead of the scene when it comes to Innovation.
What do you think?