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Why Companies Should Innovate in Asia

Why Companies Should Innovate in Asia

Clearly, the Asian Century is now.  For the first time, investments into emerging economies exceed investments into established and advanced economies.  As innovation continues its shift from west to east, this trend will continue and companies should extend their innovations into the eastern hemisphere.

 

Last year, Asia’s growth into research and development exceeded forty percent and China’s growth continues on the upswing due to increasing investments and their newly established five-year plan.  China’s GDP increased by 2 percent in 2014 and its spending in research is expected to exceed the United States by 2020.  China continues to lead the pack in patent’s filed and touts the largest patent office in the world, as of 2012.  Revenue growth in the next twelve months is expected to be 37% while businesses are expected to lose their focus on an overseas market base.

 

Successful and global companies like Johnson & Johnson are innovating in Asia. Taking advantage of young population and an ecosystem that encourages human talent and knowledge creation, companies in Asia Pacific tend to address problems quickly and strive for major improvements.  In Singapore, plans to design and build a ‘smart city’ are in the works and the government is planning more innovation centers to drive businesses to the country.  Support for innovation is rampant in Singapore and the government strives to treat businesses as partners, even going so far as creating projects where government officials and businesses will collaborate.

 

In China, the number one patent filer in the world, progress is being made to attract foreign companies, especially those in technology, to the country.  In a market worth close to $440 million, the technology industry has a lot of progress to make in terms of collaboration within the sector and across specialties.  The Japanese government approaches the job of attracting foreign companies to its country in an entirely different way, by providing funds for restructuring and consolidation.  Johnson & Johnson, a global powerhouse, recently launched its Asia Pacific Innovation Center in Shanghai.  With satellite campuses located in Singapore, Australia, and Japan, the centers mission is to hasten innovation throughout Asia-Pacific.

The rise of innovation is not something to be fearful of.  It’s to be embraced, celebrated, and exploited.  Supporting prosperity and growth in the region will provide opportunities for other economies to succeed in both areas.  Companies who will experience real success will need to take the best from Western and Eastern business models while expanding into diverse markets – these companies will have a real competitive advantage in a fast-changing environment.

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