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Why Asia Is More Innovative Than Silicon Valley

I grew up looking up to Bruce Lee, as does every Asian boy with a heart. He’s the quintessential modern-day Asian hero. And I’m going to take a page out of the master’s book:

I’m not in this world to live up to your expectations and you’re not in this world to live up to mine.

That’s perfect advice for Asian startups. We’re not in a startup to live up to Silicon Valley’s expectations.

As you may know, I think Asia should embrace its own identity and stop trying to be Silicon Valley. Today, I’m telling you, Asia is just as innovative as the Valley – if not more so. And this can’t be ignored.

For more thoughts on this matter, I chatted with Yat Siu, whose latest venture is game developer Animoca, his seventh venture so far from Hong Kong. We chatted together about Yat Siu’s key thesis about Asia: that its time has come.

First, let’s remember, Asia is super innovative

The whole idea that Asia is copying Silicon Valley and that Asia needs to catch up to the Valley is outdated. Asia is not quickly becoming a great innovator, it already is. My favorite example from Yat Siu is Samsung.

Apple didn’t invent the GUI, nor the idea of a touch phone or a mouse. They licensed it, they innovated on the business model, the distribution, the app store, and so on. And in that same vein, Asia innovated on its supply chain, its production. Look at Samsung. Their innovation isn’t really just in a fantastic Galaxy phone. It’s everything around it. Being able to produce so many stock-keeping units like nobody else. Coming up with the best LEDs or LCDs. Or Chinese companies that can produce the quality at the pace and speed that the market of today needs. Nobody in the West can even hope to emulate that.

When we think that Asia is not innovating, we’re all missing something. Much of the wholesale innovations that we see in global markets are built on a foundation of Asian innovation.

Like freemium, it’s a distinctive Asian model, originally designed because pay-to-play didn’t work because of piracy. But now, that’s the principal source of revenues for any app that makes it globally.

The thing is, these regional innovations are hidden.

The silent and hidden innovators

The era of Asian copying is over. It’s something else entirely.

In some ways, you could look at Asian culture’s propensity for hiding accomplishments and Silicon Valley’s PR machine as one reason why we don’t have enough press on this. The nature of Silicon Valley means that it just gets way more press. But the real secret is that the copying that you see isn’t actually copying.

The only reason why Kickstarter could really take off is because Asia could manufacture in a way that wasn’t possible even a decade ago. If you look at gaming content, look at Korea and Japan. If you look at innovation in streaming or P2P, China is leading in that area. Asian companies crush their Western counterparts in revenues and profits. Gung Ho, GREE, DeNa, Gamevil, Com2US versus Zynga, GLU, and so on. Just look at the market data.

The mistake is in viewing Asia through the lens of Silicon Valley. Asian companies must innovate in very different ways. Asians, and much of the rest of the world, suffer severely from “Silicon Valley envy”. But for Asia, it has been innovating quite a bit, it’s just been invisible.

The winds are changing eastward

The days when India was seen as the outsourcing nation and China as the manufacturing hub are coming to a close. The brain drain is reversing as high-skill jobs grow in the region. And the newest technologies are shifting right into the hands of Asia.

It’s looking like, after mobile, the internet of things will be the biggest trend to hit the world. That includes everything from wearable technologies to tracking objects to Arduino. And Asia is uniquely poised for this. Asia’s got a powerful mix of manufacturing and technology that will allow Asia to dominate the space in the future. Something the West can only dream of. As Yat quips pithily, “can the West even produce at any margin today?” Asia should be leveraging its software startups and its manufacturing wings to winning combos that will conquer the tech world. And we’re already seeing rumblings of Asian companies taking software innovation more seriously.

Moving forward

All of this is not to say that Silicon Valley will become obsolete. Far from it, the Valley is a machine. But Asia is a considerably different and powerful machine that is also leading in innovation.

When people say, Baidu is a copycat, they miss the point. Judging the book by its cover. And that, frankly will be Asia’s advantage if the West wishes to underestimate Asia.

After all, Steve Jobs practiced Zen, didn’t he?


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