Thursday, July 16, 2009

Innovation ... Asia Or America ...

Interesting article over at McKinsey ... about whether Asis, or America will lead innovation in the 21st century. There has been a lot written about the 21st century being the Asian century, and so on ... but, taking this debate in perspective, there are some interesting ideas that come out of it.

To begin with, innovation has always happened, even when management thinkers werent looking for it. I feel the way Asia and America look at innovation is quite different. And, there are a number of reasons for this.

The most important aspect of innovation in Asia, however, is that the contours of Asia, in terms of society, economics, politics and trade, are very different from that of America. While much has been written about the market mechanisms of America, at the micro level, Asia has thriving markets. Its just that the idea of the market is quite different in Asia and in America. This is something i have blogged about before ... and this idea makes a bit of a difference. First of all, things in Asia are not as organized, or as large-scale as in America. Neither are markets, nor is entrepreneurship. Rather, Asia has found these things largely at the micro level.

Another aspect we need to understand, which, as Iqbal points out is that in Asia, resources are scarce. Actually, not really scarce, but given the population, they seem to be scarce. And, scarce resources lead to a scenario where innovation can be the means for survival, not necessarily improvement. Let us look at some examples ...

The first example that comes to mind ... Grameen Bank ... an innovation that by itself has redefined banking for a large number of people. Microfinance as a concept has taken root in Asia ... India, too, is doing remarkably in this respect. Other examples come to mind, too ... the Simputer, for example.

As you can see, none of these are the big-ticket innovations. Rather, these are smaller in nature, but have immense impact. The important thing to udnerstand is, that in Asia, the potential for a small, simple innovation to touch lives is massive, given that it is so much easier for simple innovations to reach out to people, and to reach out to a large number of people, which makes the reach, and the impact these innovations can have huge.

So, what am i trying to say? Simple ... That the way innovation is seen in Asia (or, at least in India), is very different from the way it is seen in America, and the impact of these two perspectives on innovation, and the innovation process is large, which means that the path to innovation for these two different parts of the world could be different from each other.


Manu Goyal said...


Innovation - in the sense of the discovery - will still come from the West (as is the case today and was in the last century) for still some time to come. However the implementation and preparing it for mass consumption / distribution is what Asia would excel in. Last century it was the Japanese who perfected it, this century its our turn.


Atul said...

I agree, Manu, but some people are coming up with local solutions to local problems ... Grameen Bank, for example ... this is a new trend, i think ... something which wasnt seen except in Japan last century.