Wednesday, February 22, 2006

Is the Asian upswing a threat?

by Igor Gazdik, Consultant and owner, IG Innovation
A contribution to the
Summit for the Future

Three decades ago the Asian economic breakthrough started with the emergence of the five Asians tigers led by Japan. Many people remember that in the 1970s Japanese goods were low-cost and of inferior quality. Steadily improving, however. At that time, nobody minded. Nowadays, when Japan, Korea, Singapore, etc., are synonyms for high quality, high performance, appealing design, and exclusive marketing, nobody minds, either.

What some people seem to mind is that in recent years Asian giants, notably China and India, started taking the center stage. Their sheer size makes China and India imposing and impressive is. A billion or more inhabitants jammed in a large, but limited, area in each country. Exploding science and technology. A large proportion of young people. Increasingly high level of schooling. An ever larger middle-class. And it’s not all.

Already, China consumes 55 % of the cement, 36% of the steel, and 30 % of the coal produced worldwide. At the same time, China churns out 2/3 of the PCs, copiers, microwave ovens, dvd-players, and shoes, as well as more than half of the digital cameras manufactured worldwide. There are 260 million fix telephone subscribers and 270 million cell phone subscribers in the country.

Yet, the real winner in the long to medium run will probably be India. The reasons, in my opinion, are two: a firm democratic tradition and more creativity. The former is India’s well established property. The latter depends to a large extent on the greater flexibility of the Indian society. Almost two years ago, the Indian Internet site ran a series of articles on India’s outlook in the field of hi-tech, high-profitability products. Among the authors, two caught my attention. G V Dasarathi asks: “Are Indians really dumb?” He concludes that India needs drastic changes in the education system and in government policies to reward creativity and value addition to produce more visionaries like Vikram Sarabhai (the founder of Indian space research) and Jamsetji Tata ( the founder of Tata Industries). Arindam Banerji (“Can India produce billion-dollar innovations?”) goes in his four part series even further. He analyses American disruptive inventions and quotes some Indian disruptive inventions. He looks at India’s rural and indigenous innovations, advanced manufacturing centers, advanced research national programs and the New Millennium Indian Technology Leadership Initiative. He lists the “institutionalized innovation gap,” and proposes 8 talking points to initiate the discussion on India’s path to become “the designer of monuments, rather than the supplier of granite.” Innovation on a large scale is a way out of India’s numerous miseries. This comprehensive and public (rather than centralized) debate and approach to innovation is what makes me believe India to be the winner.

Are the achievements of China and India a threat to Europe? Some people may think so. By taking up the center-stage, these countries will necessarily eclipse Europe as the center of the world. If India, and perhaps even China, come up with some revolutionizing ideas that open up new avenues in science, technology, the social sphere, or the arts, hardly anybody will be able to hinder them from becoming the focal point of everybody’s attention. This need not be a threat, it may also be an opportunity for everybody.

But is this expectation realistic? I dare say that not yet, for a while. Not while there are too many poor people in both China and India, not as long as they abort female foetuses, or get stuck in the quagmire of the most intricate religious beliefs. Yet, anyone who is optimistic and favors progress is invited to look forward to the achievements that might come from eastern and southern Asia, and enjoy the benefits.


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