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Business - Written by on Tuesday, March 18, 2008 14:31 - 0 Comments

Denis Hancock
The rise of the new Asian Business Revolutionaries

In 2006 my colleague (Deepak Ramachandran) and I did a piece of research entitled Competing with the Asian Business Revolutionaries as the move up and out. The key idea then, as it is now, is that while many Asian upstarts (particularly in China and India) were growing rapidly by mimicing what U.S. competitors were doing while capitalizing on their lower cost structures, increasingly we were seeing signs of true innovation starting to emerge. Hon Hai and ICICI bank were among the earliest examples, there have been many more since, and it is these companies that the “old guard” really has to worry about.

Forbes published an interview with Rebecca Fannin today that delves into this exact topic with an acute focus on China, promoting her new book Silicon Dragon: How China is winning the tech race. In it, she argues that companies like Baidu and Alibaba foreshadow a new generation of Chinese start-ups that have moved beyond imitation and are competing based on new, home grown ideas and innovations. A few of the companies she highlights are Pingco (mobile messaging), Maxthon (browser), Oriental Wisdom (mobile financial services), and Lingtu (digital maps).

However, it is her other commentary that is the most interesting. Fannin notes that while it will take some time, China is emerging as the next Silicon Valley. Venture capital (she is the international editor of Asian Venture Capital Journal) is flowing in at an astonishing rate. She discusses the innovative nature that has always existed in China, that just happened to be buried by the Cultural Revolution and is now emerging again. And, of course, she highlights the two biggest problems China is facing on this front – lack of intellectual property protection, and corruption. Apparently when Alibaba was considering new business models, they narrowed it down to five – and eliminated four because of bribery concerns.

It’s quite an interesting interview, and while I haven’t read the book I certainly hope to soon. The link to China’s Invent-it-here syndrome is also worth a read, and if you want to really stay abreast of this topic the Chinalawblog is one of the best sources around – a truly amazing source of up-to-date information.

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