What is holding Asia back from delivering disruptive, breakthrough innovation? There is significant evidence that the region has been highly successful at this in the past. Look back through history and you will uncover examples of innovations like papermaking, umbrellas, the compass and gunpowder – all of which originated from Asian countries. But today’s view of the region is one that is less creative than its Western counterparts, with many researchers citing culture as the key factor for stifling creativity.
Recently, we have seen more Asian countries moving up the ranks on the Global Innovation Index (GII)¹. These countries are making significant investments to provide the tools and resources that drive a conducive environment for innovation. With the emergence of organisations like Alibaba, Grab, and WeChat, the next Silicon Valley could come from Asia.
However, there is an interesting disconnect when it comes to innovation in the region. Even with the right tools and resources, there has been limited return on investment in their ability to deliver tangible outputs. For example, while Singapore placed 7th on the GII, it fell short on innovation efficiency, placing 63rd globally. When we look at some of the other Asian countries in the top 20, we see a similar pattern.
Digging deeper, we observed that most innovations coming out of Asia have been incremental innovations – upgraded versions of existing products and services. For example, Malaysia’s ride-hailing platform, Grab, was inspired from existing platforms like Uber and currently rivals Uber in popularity in the region. Think through the list of innovative Asian companies and you will find many more examples of successful incremental innovations that rival, or even surpass, their original inspiration.
Examples of disruptive innovations – those that create new markets by discovering new categories of customers – have been harder to find. Unlike incremental innovation which is low in risk and uncertainty, disruptive innovation is about thinking beyond the upgrades of incremental innovation and creating new needs. This is not about taking a slice of the pie or increasing the size of the pie, it’s about creating your own pie.
Disruptive innovation is critical to success for organisations today given the significant transformation happening in the region and a culture that fosters this is key. More often than not, we reference start-ups as examples when we think about an innovative company from Asia. The majority of established organisations are still highly risk-averse and hierarchical, curbing their ability to disrupt and innovate. To foster creativity and innovation, organisations must create cultures where people are encouraged to take a leap, experiment and fail without facing adverse consequences. So how can Asian companies do more of this?
- Embed a ‘liquid’ culture– create a culture that is transparent, pioneering, dialled-in and agile to capitalise on changes in the marketplace, culture and technology in real time, without losing your core ethos.
- Match your people processes to your desired culture –ensure the policies and practices you put in place for recruitment, performance management, learning & development, reward, recognition and talent management reinforce a culture where experimentation is a norm and failure is an opportunity for lessons learned and part of the process to delivering success.
- Provide enhanced support to facilitate mindset shifts –in a region where social hierarchy and academic/business success are heavily valued, a range of support must be provided to help employees manage the cognitive dissonance they experience when the organisational culture feels counter to the learned behaviours ingrained in them by societal norms.
Global organizations like Unilever, Visa, Microsoft and MetLife have set up their innovation centres in Asia in recent years, with many more organizations set to follow suit. In a recent report² by Startup Genome, Singapore has surpassed Silicon Valley for the top spot for start-up talent. It is clear that there is no dearth of talent in the region, and the infrastructure and environment for innovation already exists. If the required culture shift can be achieved, it is only a matter of time before we see the rise of disruptive innovations emerging from the region.