Asia still needs a decade before it leads the tech world: here’s why

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It is undeniable that Asia is one of the most important centers of technology growth for the next decade. It’s the key for Facebook’s continued growth. It’s where the majority of web data is being produced. And it’s home to China, where some of the biggest multi-billion dollar tech companies the world has ever seen reside. But Asia is not alone in watching Silicon Valley, the Mecca of the tech world. The Valley dominates and leads everyone forward into the next century of technological innovation. We all have Valley-envy.

And despite the fact that Asia is coming into its own with possibly its own organic startup philosophy and ad-hoc infrastructure, leapfrogging, and bootstrapping, it still has a ways to go before it takes the lead in the tech world. I’d say it’ll take another decade.

Payment, logistics, infrastructure, and internet penetration

At the very core of Asia’s barrier to Valley-like dreams are payments, logistics, infrastructure, and internet penetration. At first glance, why would these things have any impact on Asia’s attempt to lead the world in innovation? They’re just potentials to tackle in the ecosystem, right? But they are also the bottlenecks for money to flow. Investors in the region are mainly interested in the clear and present problems across the region. Startups are also mainly interested in low hanging fruit. In other words, entire Asian ecosystems are aimed at systemic problems. Until these things are solved, dreams of leading the world in tech are far from everyone’s minds on a very practical level.

Why one tech trend leads to the next

One of Silicon Valley’s biggest competitive advantages is that all the new technologies are built and launched there. That means startups in the heart of the tech Mecca are privy to the newest trends and can build on what’s next. For example, Uber and Airbnb both built on a budding shared economy trend, a trend kickstarted by Craigslist years before. Kickstarter and Indiegogo, in a different vein, built on several other trends including the ease of online payment and the growing interest in unique projects. It was natural for crowdfunding to arrive, people were ready for it. The business models were waiting to happen and users were primed. This is a result of decades and generations of tech innovation all happening in one place.

Add on top of this, the keen interest from huge companies in smaller companies throughout the Valley. Although IPO’s are romantic and exciting, the fact of the matter is the most common exits are mergers and acquisitions. In other words, bigger companies are acquiring companies that fit into their agenda. This only happens when one company is riding the coattails of another.

Now some people who read this are going to say, “hey, look at ecommerce and its fast and compelling growth across Asia.” Granted, ecommerce is one of Asia’s fastest growing and most competitive markets. Huge competitors like Alibaba, Rakuten, and a host of other large Asian competitors compete heavily in Asia for their own domestic markets and neighboring markets. Ecommerce is also a leapfrog industry perfectly suited for a world where retail and supermarkets have still not reached the scale of Walmart, Costco, and Target. But leapfrogging is not leading. Leapfrogging is catching up.

Leading the world means building massive user-friendly and developer-friendly platforms

At the end of the day, what Asia really needs is a multi-billion dollar startup that builds a platform that people across the world want to build on top of. That is exactly what Google, Facebook, Salesforce, and Apple do. They build massive platforms with tons of users that developers and entrepreneurs can use as a foundation. Can Asia do that? Not anytime soon. Not while leapfrogging is the prime directive.

This article by Anh-Minh Do originally appeared on Tech in Asia, a Burn Media publishing partner.

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  • davidhill

    With the Constantly Growing Economic and Financial Might of China and South-East Asia, the West has to Fight Back using its ‘Greatest Strength’, the Liberation and Innovative Exploitation of its Superior Fundamental Thinking in the field of Creative
    Global Technologies. Life for most people is about being happy with the environment that we live in. That mainly revolves around family values and the happiness that the family brings. Many things are the reason for human happiness but where a dynamic society for jobs and family security rate very highly in the overall picture for attaining personal fulfilment.

    Indeed jobs are the supporting mechanism that provides society with their family’s ultimate security, as without jobs there is loneliness, sadness and in many cases, great family hardship. No-one can guarantee jobs but where if we look at how Western governments and our largest businesses have operated over the last thirty-five years they have literally thrown jobs away for their people. In this respect these jobs have been sacrificed one way or the other on the great altar of vast medium term profit and the personal greed of the very few that drives this continual degenerate system for humankind. Indeed a mere 33-years ago in 1980 China had only a GDP of $202 billion (at 2012 prices). Today it is heading nearer to $8,000 billion and where in a matter of a few more years will become the No.1 economy in the world with a GDP edging towards $20,000 billion, a near 100-fold increase in just three and half decades. Even today the global economy’s split is just over 50% in favour of the East and where a mere 25 years ago was no more than 25%. Unfortunately again the overall effect of all this has been to
    reduce the living standards in ‘real terms’ of the vast majority of people who are resident in western economies. This has been caused by unparalleled reductions in ‘fulltime’ secure jobs and where part-time jobs have increased at an exponential rate. Unfortunately again this factual phenomenon will continue in the West and where again in real terms living standards will continue to decline infinitum as China increases its jobs for its own people for decades to come. Therefore western finance through western banks has fuelled this highly concerning situation for the people of the West and where Western corporations have invested trillions of dollars into China and SE Asia over the last 35-years transferring the livelihoods of western people to others. Indeed western
    governments and our corporations have been fully complicit in this decline in the living standards of western people and where this decline will now continue indefinitely. Even today our politicians do not see what they have allowed to happen as all that they see with China’s growth to global economic dominance is ‘opportunities’. For they still have not learn that China is not a benevolent nation and where it will drive the West into a totally subservient environment, totally reliant for its keep from the crumbs that come off the Chinese table. But if we look at why all empires failed we see a definite trend and where the main elements were the total complacency of their politicians (what we have now and where Nero fiddling whilst Rome burnt comes easily to mind) and the transfer of technologies to others through trade (what we have now again).

    But the irony of all this massive transfer of economic power brought about by corporate compliant political leaders and the vast investment wealth provided by Western corporations and our banks is that both our politicians and corporations now have to go cap in hand to China et al. Indeed China has been strategically buying into/purchasing Western corporations and buying up Western government debt for two decades now. On top of all this China is buying up the world’s natural resources at an ever increasing rate and where coal alone is a primary consideration. Therefore don’t think for one minute that China is going to reduce its number of coal-fired power stations when they have too according to protocols, as they will simply ignore this milestone and every other one for
    that matter unless it is in their economic and financial interests to do so. Considering the above the world, other than becoming a more cleaner place to live in, will definitely become far more polluted one.

    With near $5 trillion in currency reserves constantly rising and a mere 10% debt GDP figure, China has all the hallmarks of a global power in place to conquer whatever it wants economically and in years to come military as well. The EU in particular should be critically concerned about this threat. Indeed when we look at the West today with its huge unprecedented debt level that may never be paid back, all Western economies and their people are legally bankrupt.

    So what can the West do to reverse this impossible position?
    Well the first thing is that the people can get their political leaders to listen to them and change their mindsets away for looking at China et al as an opportunity (an opportunity for the very few it has to be said and not the many, as the majority of the people will not benefit) and secondly to start the long-haul back by providing the new foundations for an economic revival.

    This will not be easy and will take decades to turn back the economic tide, exactly how the Chinese leadership planned their economic global strategy some 35-years ago. Things will definitely have to change and where the world’s largest corporations are growing in the East and declining in numbers in the West. This trend has been going on now for around 20-years and where it is not hard to see why the global economy is now tipped more than 50% in their favour. Indeed in this respect I remember around 10-years ago that an Asian businessman stated that you (the West) have your billionaires, but we shall have the first trillionaire. His words today look as though they will eventually come true as the global economy intensifies and will at least double over the next 50-years. Indeed to show the economic and financial power of the largest corporates presently, a mere 2,000 companies according to Forbes last year controlled 51% of global GDP; some $36 Trillion in nominal terms and leaving only 49% of the economic pie for the rest of the world to fight over (not a lot when the companies comprising of the Forbes 2,000 only employ 163 million people and where the world’s estimated working population is around 4,500 million). It is therefore an appalling statistic that a mere 3.6% of the world’s working population controls 51% of the world’s GDP or in terms of total population a mere 2.3% leaving 98% of people outside this greatest wealth earning sector. Unfortunately it has to be said that this continued and continual dysfunctional economic disparity in human equality is a recipe for major global unrest in future times.

    So what ultimate force has the West still got that can start the long-haul back and bring back prosperity for ‘all’ people in the West in time? In this respect when we look at the history of the world we see that all wealth starts when an innovative idea is exploited. Seems too simple to be right but where it is a fact. Indeed when we look at all past empires and how they emerged, it was because their innovations were far more advanced than their competitors. For by having better innovations they made their competitor’s products and services obsolete over a relatively short period of time,
    including military innovations that killed more people than ever before. Therefore our future change for the better for the people in the West has got to include as its No.1 golden economic key, the identification and exploitation of innovation in all its facets. Unfortunately people still consider that governments and our corporations have the right innovation mechanism in place but clearly with the West’s economic decline, they have not.

    So what is wrong?
    Western governments have to take control of the direction of global trade and where they have not to pander to the wishes of big business and be subservient to the power of the corporation. To do this western governments have to determine the effective global strategy for the West, just like the Chinese leadership did several decades ago for China and so that Western corporations are pulled into line.

    Economic wars are like military wars even though a single bullet may not be fired in anger. But economic wars are far more devastating over the long-term as they continue indefinitely and where there is a master and slave situation that emerges according to history if the imbalance reaches a level in excess of 70% of the economic turnover is controlled by a single side. In this case the East and by 2080 that unfortunately will be the very case according to current projections and the laws of probability.

    Therefore the present innovation system that creates all new wealth has to step up several gears, has to adapt to a far higher level and has to master a new preeminent economic global model. In this respect a single invention/innovation can literally change the world and create in some cases, the largest global industries in history. As an example the ‘chip’ invented by Jack Kilby (a completely independent invention and where Jack’s employer Texas Instruments did want to know when he initially showed it them) and where today it is estimated that the ‘chip’ underpins a global industry turning over $2 trillion a year that did not even exist in any meaningful way a mere 4-decades ago. Therefore a single technological breakthrough can create vast new global wealth and jobs in a relative short time horizon and where history again has shown that this has been the situation time and time again.

    What can be done?
    The history of science and technology tells us if we do an extensive and in-depth analysis of global S&T, that the fundamental thinking behind more inventions and innovations that have changed the world forever did not emanate in our universities or corporate R&D centres, but in the minds of independent thinkers outside these elitist confines; indeed up to 75% of all the fundamental thinking. This does not mean that our
    universities and corporate R&D centres are not vital, for they are. The problem is that they do not have within their economic system a mechanism that harnesses the creative thoughts of Western society and where this is pre-eminently and overridingly vital for the future. Indeed once this indispensable fundamental thinking has emerged Western universities and Western corporate R&D centres can then develop the technologies and services that this unique thinking provides on an unprecedented scale; far, far greater than what silicone valley and other world leading wealth creators have provided in the past for the people.

    For we are in a war and people in the West should start to understand this fact clearly, a global economic war.

    Therefore considering everything that is on the horizon for the West the most important step forward that we can do to prevent the collapse of our living standards to a point of extreme hardship over time, is to provide the creative infrastructure whereby our people’s innovative and fundamental thinking can be liberated and exploited. This to date has never been undertaken but where if Eastern economies adopt such a system and where it is only a matter of time not when, the West would never recover, as this would then be the completion of whole ‘innovation chain’, not just a part as is the current
    situation. Therefore it is vital that the West builds this creative infrastructure first.

    Indeed, this fundamental thinking came from some of the greatest minds of the 20th century including,

    The late Nobel Laureate Glenn Seaborg (Element 106 Seaborgium), discoverer with of 10% of all the Elements on the Periodic Table and adviser to ten former US presidents

    The late Professor John Argyris (ceded inventor of the Finite Element Method by the US’s greatest structural engineer Prof. Ray Clough in his 1960 publication that coined the name and where it stated that the FEM was the ‘Argyris’ Method). The FEM according to many globally respected engineers is the most significant engineering invention of the 20th century.

    The late Nobel Laureate Jerome Karle the US Navy’s chief Scientist and director of the Laboratory of the Structure of Matter, Pentagon, Washington, DC

    Dr David Hill
    Chief Executive
    World Innovation Foundation

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