Innovation Moves East (Part 2)

Dec 07 2010

We have written at DoctorDisruption.com about the trend for innovation to be increasingly driven by emerging markets and recent articles at trendwatching.com and blogs.hbr.org provide some great examples of Asian innovation.  Here are some of the most inspiring examples from China, India, Indonesia, Malaysia and Philippines.

The world’s largest car market

As China’s car market continues to grow so do the number of automotive innovations emerging from it’s leading companies. Shanghai Automotive Industry Corporation (SAIC) is one of the biggest companies, with joint venture links to GM, Volkswagen and Rover and a raft of new cars hitting the showrooms.  BYD is the world’s largest supplier of rechargeable batteries, and with backing from Warren Buffett plans to become a leading player in electric cars.  Great Wall Motor is the leading Chinese SUV maker and now has a joint venture to make vehicles in Bulgaria, while Geely Automotive has strong operations across East Europe, South America and Asia and now owns the Volvo marque. Chery International is one of the fastest growing makers in China (up to half a million vehicles last year and intends to also go into the electric car business with a joint venture in Israel.

Other forms of transport are also producing local innovations, with the growth of its own high speed rail network (over 7,000km) and trains topping 250km/h.  China Railways Group is now bidding to build rail infrastructure as far afield as South Africa, California, Brazil and Vietnam.  Forever is a slightly different transportation company, which has transformed a 70 year old Shanghai business into a bright new star, with a range of bikes in bright colours targeted at younger consumers.

Other technology companies are also innovating with Huawei launching the Ideos range of affordable smartphones i(with Android operating systems) in September, which is the first Chinese smartphone designed for the global market with expected launches in Europe, North America, Latin America and Asia.  Earlier in the year, the Umeox was launched as a solar powered, waterproof, shockproof and dustproof phone.

Meanwhile, Lenovo plans to launch a gaming console next year, and OSPOP (One Small Point of Pride) has launched trendy footwear designs made and inspired by Chinese workers with styling typical of Chinese labourers’ styles and superior materials and finish, aimed at Western markets and with part of the proceeds going to charity and supporting improved working conditions for workers.

One final Chinese innovation to mention is the introduction of group buying strategies, supported by many Chinese companies including Liba, Teambuy, TaoBao, EnjoyMeiTian, GetGoGive and Flashbuy who connect consumers to share purchases and with a business model which depends on advertising revenues and store commissions.

From little acorns big trees grow

India’s Tata are now well known for the Nano car which was launched in 2009, and is likely to be joined by an electric version next year.  Tata have also been innovating in hotels and resorts and in making affordable housing available in Mumbai, with small apartments selling at sometimes less than USD 10,000. They have also launched the Swach, which purifies and cleans water with common ash and requires no running water or electricity.

A company called Mega Car Pool, based in Delhi, have meanwhile been trying to take cars of the world by running a travel matching service which rewards drives for giving rides to others.  India’s skies have also become increasingly busy with the rise of Kingfisher who now have more than a quarter of the domestic market (69 destinations) and the growth of IndiGo and SpiceJet (the most profitable airline in India) winning many awards in the process.

Finally, two more great idea deserves a mention.  Mirakle Couriers rely only on deaf workers to provide their delivery services, placing a strong emphasis on training and development of its staff and with an ever growing client list.  Narayana Hospitals in Bangalore have developed one of the best pediatric cardiac surgery practices in the world under the guidance of Devi Shetty.  Shetty has built economies of scale (sadly heart disease is common in India due to genetic predispositions) into a model for providing cheap and high quality surgery using the economies of learning with repetition and incremental improvement.  This model is now being transferred to Cayman Islands, Africa and South East Asia.

South East Asia connecting to the world

Air Asia has been one of the most successful companies in Asian travel and continues to grow and expand its services (Paris is the latest destination) as one of the world’s fastest growing airlines.  In particular it has enabled low budget travellers from provincial cities in South East Asia to affordably travel to other countries, opening up tourism in their neighbourhoods in the process (for example I flew direct to Bandung from Singapore earlier this year).

Bambike is a socio-ecological bamboo bicycle business based in rural Filipino villages. In 2010 they launched a new set of bike designs with headlights, with all the frames and structure built from local bamboo plants. This fair trade program is part of the Gawad Kalinga development program aimed at educating and improving community living.

An Indonesian company has developed the Magno AM/FM radio which is hand built from sustainable materials in an Indonesian village, with profits going back into the local community to support education schemes and sustainable wood plantations to supply materials for the radios.

Another Indonesian innovation is to turn cattle waste into bricks which are greener, stronger and 20% lighter than clay bricks.  EcoFaeBrick was set up in 2009 to tackle the problems of excessive waste in local farming areas and have developed an innovative solution to the reduction of carbon emissions by using biogas to fire the bricks in a process which is otherwise similar to standard techniques.

An Asian future

There are many more inspiring innovations in the articles, which also look at great ideas from Turkey, Brazil, Mexico and other Latin American markets.

As Trendwatching point out, Asia can only become more and more important as a focus of global innovation.

  1. 70% of global growth in the past five years is from emerging economies
  2. 39% of world GDP will come from emerging economies by 2015 (doubling in 15 years)
  3. The global emerging middle class account for 2 billion consumers who will soon spend more than US consumers

Those countries which are now considered emerging or developing will account for more than two thirds of global trade by 2050, and I’m sure that much of the growth will be driven by the innovative and entrepreneurial spirit of Asian companies.

2 responses so far

  1. It is interesting that bicycles are manufactured in Bamboo plants. I am curious to know if they themselves are made up of bamboos or of the tradional materials like steel.

    How does one get part-1?

    Of course, the list is not exhaustive, right?

  2. The bicycles are made from bamboo (which is extremely strong). Part 1 is at Doctor Disruption’s blog and you can link to the original article for the full list.

Leave a Reply