Why Asia Is More Innovative Than Silicon Valley

Anh-Minh Do
2:01 pm on Mar 14, 2013

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The whole idea that Asia is copying Silicon Valley and that Asia needs to catch up to the Valley is outdated.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?

(And yes, we're serious about ethics and transparency. More information here.)

Replies
  • Ja

    I was a little pissed with how the title was constructed. though it makes sense after reading it. but i must say the valley is the hub for innovation regardless, i don’t see how we can fight that.

  • Man-Nowhere

    Asian engineers, entrepreneurs and scientists have more space to breathe in terms of growing population, urbanization, increasing consumerism and demands in most parts of Asia. Creativity, imagination and innovation come from those factors. Asian economies have possessed all resources like American counterparts in Silicon Valley do, but the former also have more constraints of cultures and politics to free their minds for new products and services. Competitive spirits and powers of growing, creating and satisfying their personal needs, including their own identities have become the key driving force of innovation in Asia. They know their successes are millionaire and billionaire classes.

  • canis

    Great piece. Freemium is started in Asia is interesting fact evolve becos of piracy.

  • Michael

    Today’s world is so interconnected with multi-hubs. I don’t think that any one can claim that it is the best in anything. I admire your gutsy statement; at the same time, I think that we are living in such pluralistic world that no one country or city can claim that it is the best. Asia still has a long way to go, I have to admit, in terms of innovation. Asian companies with the exception of Japanese ones have been fast followers. Samsung, for example, has been a fast follower in LCD, smartphones and semi-conductors.

  • http://businessandmarket.net Deepak

    Barring a few cases, much of the innovation in today’s tech world needs big R&D money. In the recent centuries, Western economies have had more capital to employ for innovation, which has led to creation of innovation hubs like the Silicon Valley. Of late, while Asian companies have been able to innovate by unlocking their wealth, some of which has been newly created and has come by way of being suppliers to Western companies. Asia’s access to some of the foundation techs and designs is also a windfall of West’s sourcing. Yes, Asia is innovating today, but it cannot deny having a history of copying first. We are still not doing grounds-up innovations, a measure of which would be in terms of number of patents held by Asian companies.

  • http://borderingon30.blogspot.com jack

    You say that Asia has “Asia innovated on its supply chain, its production”, but you provide no concrete example of this.

    I don’t want to sound snarky, but one could argue that Asia’s ‘innovations’ is the social engineering to make workers obedient, don’t mind being underpaid and working overtime and with questionable benefits.

    In addition, cheaper manufacturing costs that make manufacturing on this kind of scale possible, is not so much an innovation as it is a temporary circumstance that will change as China (and much of Asia’s) wages begin to slowly rise.

    This article also fails to acknowledge that much of the high technology being developed in China – and some places in Asia – are actually done by Western companies in Asia.

    Different people may innovate in different ways. But at the end of the day the ability to innovate is much more than having top-down policies. It begins in the individual and in childhood. And unfortunately, there’s very little sign of this happening in Asia.

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