The latest edition of the Economistfeatures a very thought-provoking overview of innovationin emerging markets such as China and India. This paragraph sums up very neatly its main conclusions (note: the emphasis is mine):
“It is hardly news that the world’s centre of economic gravity is shifting towards emerging markets. Buy a mobile phone and it will almost certainly have been made in China. Use it to phone a customer helpline and your call may well be answered by an Indian. Over the past five years China’s annual growth rate has been more than 10%, and India’s more than 8%. Yet even these figures understate the change that is taking place. Emerging countries are no longer content to be sources of cheap hands and low-cost brains. Instead they too are becoming hotbeds of innovation, producing breakthroughs in everything from telecoms to carmaking to health care. They are redesigning products to reduce costs not just by 10%, but by up to 90%. They are redesigning entire business processes to do things better and faster than their rivals in the West. Forget about flat—the world of business is turning upside down.”
I wish I’d been able to spend my long weekend testing an iPad rather than just reading all the reviews, but then again I don’t think my conclusions about the device would have been any different and I would have been at least $500 poorer.
Judging by the reviews and Saturday’s sales figures, Apple clearly has a huge hit on its hands that will ship in millions of units this year. But the more interesting question to me is whether the iPad will spur the development of the overall tablet segment, driving what some reviewers have described as a new revolution in computing.
When I first started working in the Taiwan hi-tech industry in the early 1990s, local motherboard and other PC component makers were already beginning to build factories in China to drive down labor costs and take advantage of the incentives being offered in the country’s burgeoning industrial zones in places such as Shenzhen and Suzhou.
At the same time, thousands of other multinational companies were also setting up their own manufacturing facilities in China or sourcing product from domestic manufacturers to take advantage of similar incentives and to establish a beachhead in the promising China market.
Although shanzhai phones have probably garnered the most global attention, there are quite a number of other markets that are ripe for a similar process of disruptive innovation. Indeed, some of them are already experiencing it as barriers to entry are lowered by standardized platforms and more and more players enter market.
Just behind the VIA office is an ancestral temple that I often visit during my lunchtimes to escape from the noise and bustle of downtown Hsintien and grab a few moments of tranquility.
The structure of the temple is crumbling away but some quite beautiful paintings and carvings still cling to its walls and doors as they fight the relentless onslaught of time and the elements. How sad that so little is being done to preserve it.
Having earnestly promised myself a “creative surge” this month, I suddenly found myself suffering from a creative drought (or should that be doubt?) in which I found it impossible to string together a coherent sentence, let alone a paragraph. Maybe that’s what hours and hours of writing PowerPoint bullet points does to you.
Nearly at my wit’s end as to how to break the drought, I decided to follow the example of the President of the European Council, Herman Van Rompuy and have a go at composing a haiku – a 17 syllable verse form which originated in Japan.
I’d like to wish all my readers a happy New Year of the Tiger, which arrives on Sunday 14 February.
As a result of the holiday the VIA offices in Taiwan will be closed all of next week. I’m hoping that the holiday will give me some time to start reinvigorating BrownKnows by adding more content and covering some different subject areas.
“Transformative change happens when industries democratize, when they’re ripped from the sole domain of companies, governments, and other institutions and handed over to regular folks. The Internet democratized publishing, broadcasting, and communications, and the consequence was a massive increase in the range of both participation and participants in everything digital – the long tail of bits.
Now the same is happening to manufacturing – the long tail of things”
When China first started opening itself up to foreign investment, many of the industries that set up operations there were quite low-tech such as textiles and toys and were mainly attracted by low labor costs and perhaps the distant dream of penetrating the domestic market.
Thirty years on, China is now the world’s largest manufacturer of a host of high-tech goods such as PCs, mobile phones, and consumer electronics. Just as important, Chinese companies have started to build up considerable R&D capabilities, with the result that firms like Lenovo and Huawei are able to aggressively compete in global markets and a host of smaller “shanzai” players are even beginning to make significant inroads into the mobile phone arena with a slew of affordable but highly functional devices.
Random Musings 
