Asia’s Innovation Bet Paying off

“We’re starting to see the beginning of a new world order,” says James P. Andrew, the head of Boston Consulting Group’s innovation practice. “Increasingly, rapidly developing economies, led by China, India, and Brazil are beginning to seize the [Innovation] leadership reins from more-mature countries. This is not a new story, but innovation will likely be the best, and perhaps only, lever for staying ahead of this new wave of advantaged, motivated competitors.”

Business Week and the Boston Consulting Group surveyed 1,590 executives worldwide to identify the most innovative companies. These perception findings were then combined with company financial performance with specific focus on Turnover growth, Margin Growth and Stock performance over the past 3 years.

For the first time, Asian companies boasted 15 of the 50 most innovative companies, compared with just five in the 2006 study.

Asia’s Most Innovative League.

There are 5 Key Observations of Asia’s Most Innovative:

  1. 10 of Asia’s top 15 have moved up the rankings, while 5 have lost ground to more innovative companies.
  2. North Asia dominates, South and South East Asia do not feature, although India’s Tata Group (#17) and Reliance Industries (#33) have made good progress.
  3. Japan, China and South Korea dominate the Asia rankings, Japan and China both have 4 companies in the Top 15, although the Japanese companies clearly dominate. South Korea has 3 entries in the Top 15.
  4. Product centred rather than service (just two service brands, Fast Retailing #27 and China Mobile #44 in the Asia top 15)
  5. Asia’s Most Innovative Environments – Singapore and Hong Kong have yet to yield Innovation Results with a lack of performance in the rankings. (See my post on Innovation Competitiveness).

According to James P. Andrew, the head of BCG’s innovation practice. The ascendance of Asia in the Innovation league “ is not a new story, but innovation will likely be the best, and perhaps only, lever for staying ahead of this new wave of advantaged, motivated competitors.”

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2 responses to “Asia’s Innovation Bet Paying off

  1. Ok, this is a good table and shows at a glance, “where” the innovation really is. It can be said that China, Japan Korea is where it’s at.

    The Indian subcontinent works on what I call “BPOized Innovation”. This comes from a mentality of always playing it safe, combined with a follow-the-formula method.

    This makes sense commercially (India never really suffered the recent credit crisis), but is it true innovation?

    While innovation is different from invention, in that there are no risks involved, It also stagnates the collective intellect and pioneering spirit that creates world leading powers which can lead to a new World order that this article speaks of.

    When China and Japan and Korea talk of innovation, they look at innovating LIFE, and thereby actually INVENT in parallel with the West new technology to do that.

    In the BPOized method of innovation, we have to ask How much freedom really is there to the R&D teams to experiment and burn through funds to create new things? (not taking burning funds due to scandals into account)

    India’s version of innovation is a few rungs safer down the ladder: take imported technology already proven to work, and assemble something new with it.

    (p.s I’m indian, so hopefully it’s taken as constructive criticism only).

    Regards,

    • Good input Clyde, interesting to note that India and China are both environments which make innovation challenging from a business perspective and yet China has made quite an impact on the Innovation League. Companies such as BYD are worth watching.

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