Innovation and ASEAN

Posted on October 18, 2012

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There’s precious little

The 10 members of the Association of Southeast Asian Nations look poised to become a major trading partner within the global economy. But are they? With the exception of the developed city-state of Singapore, most of the members remain developing nations, with indeed a few still underdeveloped. Within the countries themselves, there is great range in prosperity levels, particularly between rural and urban areas.

Asean R&D in action

If these export-driven economies continue to rely upon the global market for continued economic growth, there is a great need for businesses and researchers to develop the capability for indigenous innovation. Without it, long term per-capita income may even decline relative to other regions as the traditional agro, resources and manufacturing sectors cease to contribute substantial growth.

But foreign firms and the local ethnic Chinese conglomerates show no signs of providing the necessary impetus required needed to produce a competitive economy and assist the transformation into a fully developed region. Economic, research, education, and industrial policies and subsequent implementation strategies need to be reconsidered. This requires abandoning many existing economic and social assumptions held by those in executive power and at the public administration levels.

What’s the reality on the ground?
Most industries within the Asean region have developed as consumers rather than innovators of technology. The communications, computer, aviation, and automobile industries are all reliant upon outside technologies, either through the purchase of turnkey plants or licensing. As such, little organizational learning actually takes place, inhibiting the development of internal innovation competencies. Indigenous technological development just doesn’t occur. Many studies have shown that Asean SMEs are also users rather than creators of technology.

The industries of the future will be in the hands of those who control the technology. Whether manufacturing, exploiting natural resources, or providing services, the key to any competitive advantage will be control of present and access to future technology. Without this any industry will struggle to contribute to a nation’s global competitiveness, and enhance the export base. One of the major differences between the Asean region and other major trading entities like China, Japan, Korea, the US, and EU is in research and development. Researchers at higher education and other research institutions in Asean, however, tend to imitate previous research undertaken in other regions. Much research is undertaken on an ad hoc basis aimed toward fulfilling career and promotion requirements rather than focusing on commercially oriented and national development issues. There is very little collaboration with industry and most projects are abandoned at the conceptual level where prototypes aren’t even built.

Expert panels screening applications from research funding agencies are conservative and discourage avant-garde research projects, usually knocking them back due to lack of evidence or commercial ignorance. Consequently research output region lags greatly behind other major trading blocs, indicating an horrendous gap in indigenous innovation as measured by resident patent applications filed through the Patent Cooperation Treaty procedure with various nation patent offices.

2004 2005 2006 2007 2008 2009 2010
Asean 2,573 2,737 2,904 3,100 3,286 3,572 4,114
US 189,536 207,867 221,784 241,347 231,588 224,912 241,977
China 65,786 93,485 122,318 153,060 194,579 229,096 293,066
India 4,016 4,721 5,686 6,296 6,425 7,262
Japan 368,416 367,960 347,060 333,498 330,110 295,315 290,081
EU 103,367 101,232 100,678 110,731 111,880 110,319 98,894
S Korea 368,416 367,960 347,060 333,498 330,110 295,315 290,081

Figure 1. Resident patent applications filed through the Patent Cooperation Treaty procedure of major trading nations

With the exception of Singapore, university standards are low. In contrast, Chinese, Korean and Hong Kong universities are rapidly rising within the world rankings. This research gap is likely to widen rather than narrow.

At the industry cluster level, Malaysia’s Multimedia Super Corridor (MSC), regional corridors, and Biotech clusters have to date achieved very modest results, and it is still too early to tell whether Singapore’s massive gamble on the Biopolis will bring enough biotechnology IPOs to bring sufficient financial returns from the research being undertaken.

The development of mega-cities within some Asean countries should be hotbeds of creativity and innovation. However as the patent figures above indicate, the growth of mega-cities within Asean has not brought with it a culture of creativity that many other growing mega-cities have experienced.

Further, Asean mega-cities have brought traffic jams and urban problems of crime and poverty. This appears to be corroborated by performance within other creative domains like the arts, theatre, music, and sport. This apparent lack of any culture of creativity will potentially cost the region dearly in the quest to participate in the next stage of world development based on innovative sustainability.

What needs to be done?
The ability to develop indigenous technology may be more important than the issues of trade liberalization and implementing Western notions of democracy. However Asean governments have been employing losing strategies in their policy initiatives. The region has been bureaucratized almost to the extent of stalled effectiveness. For example the Ministry of Science and Technology and higher education in Malaysia centrally control the allocation of scarce research funds which usually end up funding projects that have little benefit to industry or national development. This egocentric, ‘government knows all approach’ to technology and industrial development is something akin to the old Soviet era GOSPLAN apparatus.

Another great tragedy is the lack of regional research cooperation. with few existing mechanisms to encourage it. Asean has a very poor track record of collaborating as a group ever since the collapse of the Malaysian-initiated Asean car project back in the early 1980s. There are deep attitudes of complacency within the Asean leadership, contributing to the failure to synergize knowledge generation.

The key to developing indigenous innovation seems to be culturally linked, which leads to the question of what type of culture do Asean nations need to nurture for the next generation? Creating change involves battling the inertia of society and this must begin with education. However ideas and curriculum are years behind other regions. Talent and diversity needs to be cultivated rather than conformity. It’s no longer enough to guarantee a place in the classroom and achieve high national examination scores. This doesn’t necessarily require a massive increase in funding, but rather reallocation and a cathartic change in the bureaucratic mindset to adopt new curricula. It may not be a funding problem, but a priority and allocation issue.

Creativity is fundamentally a social process where new ideas are more likely to come through rest and relaxation rather than strenuous formal meetings. Consequently workplaces need to be redesigned so that an environment of serendipitous sharing becomes the norm. This must be supported by the correct motivation systems that reinforce and truly reward new ideas and promotes high productivity – something deeply lacking in the region today.

Nepotistic structures must be overturned with the practice of true meritocracy, where it should be recognized that creativity doesn’t necessarily increase with experience. Nepotism is a curse that prevents peer recognition of creative acts and suppresses excellence at the very time collective creativity needs to be developed within organizations in the region. The above calls for an almost total revolution within the Asean workplace, which would be strongly resisted by the ‘Hongs’, ‘Towkays’, and ‘powerbrokers’ within organization hierarchies.

Through Asean citizens studying abroad, travelling, and experiencing the values of other societies through the media and consumerism, the exposure is there for change. However the experience of other cultures has yet to bring complete open-mindedness within the region, enabling the mental flexibility needed to be creative as a society. We are eating the Big Mac without understanding how and why it came to be.

Leadership in the region is still taking a risk-adverse approach to issues of Asean integration and currently without the visions necessary to create the society as a platform that facilitates the synergy of new ideas that can potentially lead to untapped multiplier effects and greater diversity. Asean members are still locked within the psychic prison of tribalism and the belief of what has worked in the past will do so in the future.

This is not about freedom and democracy as some in the west deem necessary, as alternative models of growth and development as in China now exist. Development based upon imported technology will never be able to enable competitive advantage over the technology providers. The inability to develop indigenous agro technologies concerned with food production in the face of the changes rising population and climate change is a future disaster waiting to happen. At the very least, future agro-industry development without indigenous technology, being solely reliant upon foreign technology may even challenge the very notion of sovereignty over resources that Asean governments have so zealously protected.

The lack of indigenous innovation may play into the hands of China and the US, where Asean will be militarily dependent upon hardware suppliers thus ensuring the region is weak militarily, at a time where a new Asia-Pacific order is emerging.

 Asia Sentinel

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