Some Really Interesting Facts on Asia and Europe

Some interesting, perhaps little-known facts provide a useful contrast between Asia and Europe and demonstrate both the present-day reality and the scope of the future opportunity:

• GDP per capita in Asia (approximately US$15,000) is less than half the EU average, and there is a much wider standard distribution. A large population lives in poverty throughout the continent.
• While India and China are among the fastest-growing economies in the world, the latest figures on GDP per capita are $2,800 for India and $6,000 for China. They should both still be considered developing economies.
• The top GDP per capita countries (2008) in Asia: Singapore ($52K), Hong Kong, Japan, Taiwan, South Korea ($23K), Malaysia, Kazakhstan and Thailand ($8.5K).
• India has 22 official languages that are as distinct and different as the 23 EU languages; half a dozen different scripts are used. English is spoken by a mere 7 percent of the people in India. However, it is possible to get deep penetration into the Indian market with five key languages.
• There is very little content in local Asian languages on the Web, in general. Based on a survey done by Asia Online in 2007, less than 15 percent of the total content on the Web is in Asian languages. Almost 90 percent of the Asian language content is in Chinese and Japanese. There is a huge need for more local language content in Southeast Asia.
• China now has the fastest-growing patent office in the world. The World Intellectual Property Organization (WIPO) states that China is clearly an emerging scientific and technological power.The share of Asian country-based patent filings is now in excess of 50 percent of all patents filed across the world.
• India has more gifted and talented students in high school than the total school student population in the U.S. China has more students in science and technology college degree programs than India and the U.S. combined.
• McKinsey & Company has identified a “Rising Asia” as a stable long-term trend that will fundamentally change consumption patterns.
• Gartner (NYSE: IT) suggests using IT to reach the market. The research firm suggests that global companies use IT to “lighten” their Asian business model in order to address specific cultural, geographic reach, and supply chain considerations.
• Wealthy Asians are concentrated in major cities like Shanghai, Beijing, Hong Kong, Singapore, Kuala Lumpur, Mumbai, Delhi, Seoul, Manila and Bangkok.
• China is now the fastest-growing market for Bentley and BMW.
• Even countries like Laos, Nepal, Pakistan, Sri Lanka, Myanmar, and Cambodia — which have very low GDP/capita — are interesting markets for cellphones and basic commodities.
• An understanding of the critical perspectives of Buddhism, Hinduism and Confucianism can dramatically enhance communications strategies targeting most parts of Asia.
• Google (Nasdaq: GOOG) is not dominant in key Asian markets. In Korea, it has less than 2 percent search market share; in China, about 17 percent; and in Japan, about 20 percent. Local companies dominate because of their better understanding of local content, language and customer preferences. This suggests that standard U.S. approaches may not work well in many Asian markets.
• Chinese social networking startups have produced many innovations that have led to their becoming profitable much faster than their U.S. equivalents, like MySpace and Facebook. Asian innovation is gradually making its way to the West.
• Most of Asia has been relatively unscathed by the global financial and real estate market collapse. (source Commerce Times)

Hyundai and its Success at Globalization

Great story from the Korea Times. When Hyundai Engineering & Construction CEO Kim Joong-kyum took office early this year, the construction market both at home and abroad was not in good shape.

The financial crisis slowed down many large-scale projects overseas, while the domestic market continued to be bogged down by a record-high number of unsold homes. Orders were shrinking with competition at its highest.

All of this meant that the pressure was on for Kim, who was responsible for steering Hyundai E&C through one of the worst economic slumps in history.

Seven months into serving as the top chief, however, Kim has put most of the uncertainties and concerns behind by posting solid records right through the downturn.

Locally, the builder started ramping up efforts to win orders for housing redevelopment projects throughout the metropolitan area and mega public undertakings scattered nationwide.

Overseas, Hyundai E&C won a $1.3-billion gas exploration contract in Saudi Arabia in March. Then, in June and July, it won orders worth $600 million and $1.7 billion, respectively, in Singapore and the United Arab Emirates. Most recently, the company added a $190-million order to build a fertilizer plant in Qatar earlier this month.

The figures added up to hand over Hyundai E&C the market’s No. 1 position again last month after six years struggling to reclaim the top spot.

And many credit Kim for helping one of the nation’s oldest builders renew its industry supremacy.

The veteran Hyundai executive’s willingness to seek transformation and differentiation is what moved the 62-year-old company forward.

Since the first day of taking office, Hyundai E&C officials say that Kim was all about overhauling decades-old systems and practices. Everything from personnel line-up and global management to internal and external communication, the new CEO wanted changed and improved.

Kim said during his inaugural speech: “Hyundai E&C has endured a countless number of hardships throughout its history, but it continued to maintain its market leadership. At this time, what we need is continuous transformation in order to become a global top leader.”

Companies add Innovation Programs

It is very interesting to see company after company add innovation programs to their agendas. I don’t mean paying lip service to innovation – I mean really meaningful programs. We all know the success of P&G’s programs, and following them many companies have embraced “programs” around innovation – most of which have been successful.

Pitney Bowes is one such company. It believes that innovation is core to how they build the creative and financial capacity to invest in new market opportunities and new ways to deliver products and services. That’s why they’ve chosen to increase our innovation spending in this economic downturn. In 2008, Pitney Bowes generated just under US$900 million in free cash flow on $6.3 billion in sales. As it be­came clear that a recession was coming, and that it was going to be deep and potentially long, they realized they had the financial capacity to continue to invest in the business. They saw the recession as an opportunity to in­crease our innovation investment as a percentage of revenue so that we could be even better positioned to take advantage of market opportunities.

It will be fascinating to see how the return on investment of many of these programs turns out. Especially those investments made in the midst of a downturn. My guess is that they will be game-changing for most, successful for others, and will fail for a very few. Culture change, which goes hand-in-hand with innovation, is a catalyst for “turning the titanic” at any time.

Customers by far the best source of Innovation

A new report from Grant Thornton International Ltd reveals that customers and in-house R&D teams are now the leading source of innovation for U.S. businesses, while globally customers are an organization’s best source of innovation. When asked to name the origin of the best innovation ideas, U.S. business owners named customers (37%) and in house R&D teams (37%) as their leading sources of innovations followed by heads of business units (34%) and employees (32%). Globally, 41 percent of businesses say that customers are their leading source for innovation.

“In recent history the tech boom and the creation of internet social networking sites brought innovation and entrepreneurship into every American home,” said Harris Smith, Grant Thornton LLP’s managing partner for Private Equity and the Audit practice leader of the firm’s Southern California offices. “Without entrepreneurs and innovation, America couldn’t thrive.”

Regionally the report reveals that in Asia Pacific customer focus is a particular source of innovative ideas and products with nearly half of businesses (48%) citing customers as the source of the best innovative ideas, compared with 40 percent in Western Europe and 35 percent in North America.

In addition, more than three in four businesses globally (78%) believe that the U.S. is the easiest country to create innovative products, services and business. The U.S. is the clear leader in this, with the next highest countries being China (22%), India (22%) and the U.K. (21%). Regionally, the U.S. is also seen as the leading country with 77 percent of Asian-Pacific businesses, 84 percent of North American businesses and 71 percent of European businesses saying it is the easiest country to create innovative products, services and business in.

“With the history of innovation in the U.S. spanning from the country’s earliest beginnings, it’s not hard to understand why businesses around the globe see America as the land of innovation,” said Smith.

To read the full Grant Thornton International global innovation report, Innovation: the key to future success?, or the North American, European or Asia-Pacific regional innovation reports, please go here.

New Book on Israel’s Success in Business Innovation

Policy 2.0 – Open Innovation in Policy Creation

More buzzwords? Policy 2.0? Well, its all about breaking down the barriers and enhancing collaboration. Hope Street Group believes that new online collaboration tools have an important role to play in surfacing new ideas and voices to make a positive difference on many issues, including teacher effectiveness. To that end, this summer Hope Street Group launched a virtual education policy team using Policy 2.0, their collaborative web platform. They recruited a diverse policy team of educators and professionals from the private and civic sectors across 17 states. Through an in-depth process of discovery and research over three months, the policy team devised targeted recommendations for improving teacher evaluation systems. Policy 2.0 allowed for connectivity between busy practitioners from across the country to a library of resources, to national experts, and to each other, through a tool that gave them a unique platform for engaging in education policy, with far-reaching implications.

They then documented their findings and took it to the White House.

Read the full report here.