Asia Can Lead The World In Disruptive Technologies, Says Innosight MD

The future of innovation is in Asia, says Mr. Scott Anthony, Innosight Asia-Pacific Managing Director, at the TechVenture 2012 Summit earlier this month.

AsianScientist (Oct. 25, 2012) – The future of innovation is in Asia, says Mr. Scott Anthony, Asia-Pacific Managing Director of the consulting firm Innosight, at the TechVenture 2012 Summit held on October 17 earlier this month in Singapore.

The audience were budding and seasoned entrepreneurs, influential investors, wealthy high-tech founders, and ultra-high net worth individuals from the venture capital and private equity community. They were at the Summit to network among innovators and other key players in the Asian technopreneurship ecosystem.

Anthony defined disruptive technologies as a concept coined by Clayton Christenson, Harvard Business School professor and co-founder of Innosight, that is to create a new market by applying a different set of values which ultimately overtakes an existing market and creates new ones. For example, a disruptive technology could be something complicated that is now made simple, or something expensive and/or inaccessible that is now affordable and easily accessible.

Three global trends would contribute to Asia leading the world in disruptive innovative technologies, says Anthony.

First, there is an unprecedented explosion of growth in the middle class due to changing population demographics and increasing economic prosperity. Their demand for quality goods and services brings with it a remarkable spending capacity and with that, enormous growth opportunities.

There is also a shift in centers of innovation from being Western-focused towards being Asian-focused. In the past, products were conceptualized, marketed, and sold in the West, and companies simply took that, lock stock and barrel, to sell in the East.

Anthony gave the example of Kraft Foods in China, where they initially attempted to sell traditional American-made Oreo biscuits to no avail. After much effort to understand what the Chinese expected to find in a biscuit, they customized Oreo biscuits to suit local tastes by making the chocolate more chocolaty and the cream less cloying. Because of this, Oreo is now the most popular biscuit brand in China, and Kraft Foods expects US$1 billion in sales of the iconic biscuits from emerging markets such as China.

The third trend he mentioned was the potentially massive role that multi-national companies (MNCs) could play in shaping Asian innovation, citing Medtronic in India as an example.

Medtronic, the world’s largest independent pacemaker company, traditionally sells pacemakers at US$1,000 in the West. They were looking to expand in India and introduced a new business model there, because the average consumer in India would not go for regular health screenings and would also not be able to afford the pacemakers, should they need them. Medtronic’s customized business strategy included free ECG screenings in rural villages to identify potential patients, and partnership with local banks to come up with micro-finance loan schemes for pacemakers so the poor could repay their loans. Anthony emphasized that this sort of scheme was something start-ups would have difficulty implementing, as only big MNCs would have the financial, marketing, legal, and regulatory resources to do so.

Despite all the advantages Asia has to offer, Anthony feels that it has not yet realized its full potential for disruptive innovation.

He names a series of hurdles standing in its way, namely poor infrastructure that would lead to inefficient use of time and resources, making it difficult and impractical for businesses. Inadequate funding for start-ups after the initial seed-funding stage would lead to the “valley of death,” in which start-ups crash and burn. The Asian fear of failure, the need to respect hierarchy, and the reluctance to raise differing opinions are additional deterrents to innovation in Asia.

Weighing the pros and the cons, Anthony said that if Asian innovators implemented business strategies that harnessed its strengths and minimized its weaknesses, there was “tremendous potential for Asia to lead the world.”

“I believe the future of innovation is in this room, in this country, in this region. The potential for all of us to change the world is here, if we just think and act in the right way,” he said.

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Copyright: Asian Scientist Magazine; Photo: Innosight.
Disclaimer: This article does not necessarily reflect the views of AsianScientist or its staff.

Sarah has a PhD degree in biomedical sciences. She hops on a plane or dive boat every chance she gets, and firmly believes that “one’s destination is never a place, but a new way of seeing things.”

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