How Asia Is Transforming Into An Innovation Powerhouse
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China, Japan and South Korea are leading the charge when it comes to spending on research and development (R&D). In 2018, the three countries spent a combined $613 billion on R&D, bagging three of the top five spots globally, according to a report by Lux Research.
The United States continued to take the top position while Germany came fourth on the list.
Titled ‘State of Innovation in Asia’, the report outlines how the private sector plays the biggest role in these three countries bagging top spots, accounting for about 78 per cent of the overall numbers.
In VC Funding, China pips US
Start-ups in Asia raised $107 billion in 2018, the report said, wherein China dwarfed all others with more than $85 billion alone. With those numbers, the country overtook the US for the top spot globally.
“2018 was an exceptional year for China’s VC scene, with nearly 1,900 deals at an average deal size of $45 million,” the report said.
India and South Asian countries such as Indonesia and Singapore have also seen massive uptick in terms of VC funding in the last couple of years. Start-ups in these three countries have together raised $28 billion in the past two years. The flow of venture capital has also meant the steady rise of unicorns from these countries. India has had 19, Indonesia four and Singapore three unicorns between 2017 and 2018.
The report said that despite their reputation of being powerhouses of innovation, Japan and South Korea had the lowest amount of VC funding in the region, reflecting the gap that exists in both countries’ startup ecosystems.
No Challenge For China In Patents
China had 1.6 million patent applications in 2018, representing a staggering 24 per cent annual growth rate since 2008. In the same period, its share in Asia patent applications rose to 87 per cent from 46 per cent.
South Korea saw 8 per cent growth while it was 3 per cent for Japan during the same period.
According to the report, despite having seen more than 10 per cent growth rates over the past decade, India sees minimal patent application activity. A majority of the applications continue to come from locally registered foreign corporations, it said.
Where Innovation Is Happening
The report found that manufacturing beat all others when it comes to innovation in China.
“Technologies like robotics and 3D printing are key areas of focus for domestic expertise as the country continues to ramp up its manufacturing capabilities and capacity,” it said.
Manufacturing was followed by information technology (IT) and chemicals and materials.
In Japan, chemicals and materials led the wave of innovation while IT far surpassed every other sector in Singapore.