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Learning from Asian Innovation

Learning from Asian Innovation

Asian companies are different from Western companies in many ways but none as obvious as the approach to innovation that Asian companies take.  In general, Asian innovation tends to take four very generic characteristics including:

 

  • Suitability: Does the product fit a need and a budget?
  • Changeability: Asian markets are willing to change an entire company if a market opportunity exists, including image and style.
  • Fluidity: The business environment is one that accepts and expects change and doesn’t mind a great deal of uncertainty.
  • Urgency for growth: Many Asian companies are young with a desire to grow, an organization structure that is flexible and will promote growth, and the knowledge that growth will take effort.

 

The distinct difference in approaches to innovation between Asian and Western countries is much clearer when one contrasts the typical process of Western companies.  While Asian companies will begin a new company by developing innovations tailored to satisfying a need, Western countries will typically try and export their innovations to new country – without first identifying an opportunity for said innovations.  This is typically called a push approach – Western companies try to create a breakthrough in new markets with their Western based innovations.

 

An Asian company approaches innovation in a much different way.  Asian firms will look at the existing technology in a country and determine which innovations have enjoyed success.  Then, these companies make improvements based on what their consumers demand in terms of accessories, pricing, quality, and features.  The focus is almost always on reducing cost while improving function and thanks to this, Asian companies are able to reach many mid-markets that Western companies ignore or simply are unable to compete in.

 

An approach to creating innovation that is suitable for low to mid-markets requires a powerful understanding of the products already available to consumers.  Typically, Western companies launched emerging markets need to have a product that is perfect as their brand is already established.  Asian companies, since they’re so young, are often less burdened because they are often owned and operated by the founding President or CEO – making it easier to launch without consulting shareholders or mid-level management.  Asian companies are also often followers:  when they see a product they’re quick to develop similar products that are cheaper while Western companies tend to research and analyze each market before making a decision to expand.

 

It’s important to point out that while there is not one right way to innovate, Western companies should evaluate what methods and approaches from Asia could be useful in the West.  For any company that wants to move into new, emerging markets or challenge new competitors, it would be productive to evaluate whether there is something useful to be learned from the way Asian companies innovate.

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