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Asia at the Crossroads: Avoiding Stagnation and Meeting New Challenges

While men in business suits may be the ones who control dollars and economic power in Asia, the age of technology needs to see a cultural change in terms of supporting diversity and inclusivity. It makes sense that diversity will drive innovation, because more people looking at a problem will most likely come up with more interesting perspectives. The real driver of change will be not one brilliant head but several heads that collaborate. These two powerful terms have crept into mainstream business vocabulary, helping companies like Google and Microsoft seal their reputation as two of the world’s farthest reaching businesses.

This excerpt from Lars Hansen’s essay called Asia at the Crossroads: Avoiding Stagnation and Meeting New Challenges, drives home the point that it’s the mavericks and rebels who take risks when it comes to original solutions. Holding a master’s degree from the Tufts Fletcher School of Law and Diplomacy, Hansen joined the Center for Asia Leadership’s Asia Leadership Trek in 2014. Her essay is a reflection on her first-hand experiences in Hong Kong, Singapore, Kuala Lumpur, and Seoul.

Supporting the Innovators

I believe there is a link between diversity and innovation. Diversity spurs innovation because a diversity of perspectives is inevitably more likely to come up with different solutions than just one perspective. This is why, ultimately, I do not believe that aging men in gray suits will be the main innovators of tomorrow. Diversifying the decision-makers in society is one concrete way in which the countries we visited could spur innovation. When reformers make the case for increased diversity—when, for example, reformers in South Korea lobby to increase the proportion of women in the Korean workforce—they should remember that an increase in diversity is also good business sense—at least if the business is innovation.

But why focus on innovation in the first place? It is obvious that the innovative economy, if it may be so called, is a major asset for the United States. The value that top-end innovative industries provide is far greater than the value gained further down in the production chains. And as income levels go up in Asian countries, they will increasingly struggle to remain competitive in the fields of lower-end manufacturing. The problem with innovation is that it is notoriously hard to bring about by fiat. A Korean parliamentarian told us that changing from a manufacturing economy to a creative economy is like shifting output from hardware to software. The change can be difficult because the advantages of “hardware”—material goods and specific laws and regulations—are so much easier to grasp. But, in my opinion, what really matters—and what holds far more to create long term value—is the “software”: the human mind.

What was the determining factor in the success of Silicon Valley? It was not the brilliant laws and tax exemptions that regulated the tech industry; in fact many American entrepreneurs decry what they see as government red tape hampering business innovation. In my opinion, what made the success of Silicon Valley possible were the people working there. At the risk of sounding unorthodox, I think the presence of a sufficient number of brilliant, rebellious, pot-smoking college dropouts who were willing to take risks was of much greater importance than California’s tax code or its physical infrastructure.

What California possessed was an environment where these mavericks were not ostracized but were instead given the necessary room to flourish and engage their creative energy. Therefore, while copying the infrastructure and studying the ecosystems of prospering tech industries is an alluring path for growing countries that wish to increase their levels of innovation, I believe it is unlikely to be sufficient to recreate these successes elsewhere. Innovation will not come from men in gray suits. But currently our society, and Asian societies in particular, are geared towards producing more men in gray suits. South Korea, for example, remains a highly traditional society. While it has gone through unbelievable change and overcome staggering odds, the country’s extraordinary economic transformation has not been matched in any comparable way by a modernization of social norms and practices. This is not surprising, as social change generally takes place at a slower pace than economic development. But to build truly innovative economies, I believe this area—social change—is exactly where Asian countries need to focus.

By Lars Ragnar Aalerud Hansen