A startup created a ventilator in 6 weeks. What does that mean for other players in Asia?

This article was co-authored by Stephen Turban.

The authors of this piece are not affiliated with Brakes India.

In April 2020, India faced a grim reality: Its healthcare system was poorly prepared to address the rapid rise of Covid-19 cases.

Chief among the country’s concerns was a lack of ventilators. Without any local suppliers in India, this posed a severe risk to the healthcare system – as well as a market opportunity for local players.

Photo credit: Hush Naidoo

By May 2020, automotive manufacturer Brakes India had designed and manufactured a low-cost ventilator. The speed with which this traditional manufacturer moved into the medical device market is a reflection of a trend crucial to the success of Asian innovators: the open innovation paradigm.

For decades, innovation has taken a west-to-east trajectory, particularly in fundamental technology. The lack of research and development in local institutions in Southeast Asia, in particular, has been a blockage for both software and hardware investments in the region.

With the exception of Singapore and a set of its universities, investment in research has been particularly limited in Southeast Asia. Similarly, an east-to-west brain drain meant that the best talents from the region work far away from the countries of their origin.

Asian companies’ resources to invest in R&D have also historically been much less than those of their western counterparts. However, as globalization opened markets, Asian firms had to compete directly with western companies. That meant Grab had to compete with Uber, and Flipkart still competes with Amazon.

This leads to a difficult problem: How does a company with fewer resources, both in-house and regionally, out-innovate its competitors?

In our research, we’ve found that the strategy of open innovation has played an important role in Asian companies’ success in “leapfrogging” their international competitors.

The term “open innovation” was first coined in 2003 by Dr. Henry Chesbrough, a professor at UC Berkeley’s Haas Business School. Open innovation encourages firms to look outside the confines of their companies and seek external knowledge, expertise, or technologies that can be incorporated into their internal innovation. It is about marshaling external innovation resources and using them for the company’s growth.

Brakes India was distinctive in how quickly it had partnered with external R&D centers such as the Massachusetts Institute of Technology (MIT) and the Indian Institute of Technology Madras (IIT-M) to develop its ventilator. However, it’s just one example of many traditional and tech firms in Asia that have leveraged open innovation to stay competitive:

1. Grab partnered with the National University of Singapore to develop an AI lab focused on urban transportation, partially funding the lab in return for access to its top AI talent.
2. Huawei invested multiple times in international universities, including the University of Cambridge where it has also made an investment to create a joint R&D center.
3. Several Asian firms have partnered with Western tech giants to enhance their capabilities in highly technical areas like cloud resources, such as Byju’s, Grab, and others that use Amazon’s basic infrastructure in cloud computing to power their tech stack.