When we think of great inventors and inventions that changed the world, we could be forgiven for focusing on the United States. From Thomas Edison to Steve Jobs, America has been the dominant global force in innovation for over a century.
Even as we’ve moved into the digital century, we’ve seen massive US based corporations dominate the online space, companies like Google, Facebook and Amazon and have traditionally driven the adoption of new technologies by mainstream society.
But over the last few years, this dominance has been tested by China, Japan and other Asian countries. In fact, in 2016, Japan outpaced the USA to lead the world in patent filings.
The 2017 Top Global Innovators report from Clarivate Analytics revealed Asian organizations outperformed the USA, and the rest of the world, in every single metric throughout 2017. Forty-Five Asian companies appear on this year’s Top 100 list.
The 2018 Bloomberg Innovation Index also ranked Asian countries above the USA. South Korea, Singapore and Japan all landed in the top 10, while the USA fell to 11th place this year.
Perhaps this isn’t so surprising when you consider that Asia has its own tech-giants, comparable to western players like Facebook and Google, driving innovation at home.
There’sthe Chinese conglomerate, Tencent, the world’s biggest investment company, and Softbank, the Japanese telecommunications company so popular it’s mascot has become a national icon. As well as other well-known companies Honda, Toyota, Fuji and Samsung, just to name a few.
But Asia has also been experimenting with financing innovation in creative ways. Initiatives like Malaysia’s IP loan program or Singapore’s IP financing scheme. The programs allow small and medium enterprises to put forward their intellectual property as an asset anduse it to help them qualify for financial assistance.Efforts such as these may be of interest to innovators in the West, as they illustrate the alternatives available to the more traditional avenues for financing invention ideas through venture capital.
Innovation abundant throughout the region, the ideas and inventions being produced are creative, with lasting societal impacts. Across the board, Asian Governments are investing in the future, and giving tens of thousands of creators and entrepreneurs opportunity and incentive to tackle some of the most pressing issues we face today; Affordable healthcare, cost-effective sustainable energy, life quality in overcrowded cities.
Figures from the IEEFA (Institute for Energy Economics and Financial Analysis) show that China will account for 42 per cent of global solar energy capacity growth from 2017 to 2022; the number is expected to be 35 per cent for hydroelectric energy, and 40 per cent for wind.
Currently, China spends about 40% of what the USA spends on Research and Development, boasts 146 high-tech parks across the country offering opportunities and support for start-ups. Like Japan, they now exceed the US when it comes to domestic patent applications. The amount of research by Chinese innovators published in scientific and engineering journals is now on par with the number of papers published by their American counterparts. They lead the world in technology manufacturing and they’ve produced companies that have become formidable global competitors, like Alibaba, who forced eBay out of the Chinese market.
In fact, Alibaba is a clear example of how Chinese companies are beginning to branch out from their local markets by using the cash and capabilities they acquired at home to invest in more developed markets. Expanding beyond China and bringing competition to established multinationals in their home markets.
Japanese tech giant Toshiba presents another case of an Asian innovation helping a brand rise to a position of global dominance. Every day we encounter the company’s breakthrough innovations. USB flash drives, micro SD cards, even solid state and hard disk drives sitting in the data centres that process our internet banking or save our photographs.
The success in the region is partly due to the cooperation between Asian nations. Despite a range of divisive issues, there is regular communication between the patent offices of countries such as China, South Korea, Taiwan and Japan. This collaboration fuels invention initiatives and helps produce results rapidly.
Not all western markets are embracing the exciting new technologies, products and services the Asian innovation explosion is producing. This month, US President Donald Trump signed an order placing tariffs of up to 40% on solar panels, resulting in a setback for America’s renewable energy industry. The President is also considering tariffs on steel and aluminium imports. Trump has been vocal about his intentions to put American interests first, including the interests of American corporations.
TheNational Bureau of Economic Research recently released a report which offered support for the President’s strategy. According to their findings competition with Asian exporters, especially those based in China, has a detrimental effect on American innovation.
But other economic experts claim rather than protecting U.S. interests, the tariffs will stifle clean energy and bring an end to the country’s current solar boom, destroying American jobs in the process.
It’s hard to predict precisely what the impact of the Asian innovation explosion will be. But one thing is certain, as itcontinues to flourish, the US could risk missing opportunities in its bid to recapture its bygone supremacy.