Despite sharp differences in culture, race and religion, Asian economies are finding common ground in technology and in particular, the sharing of intellectual capital in this sector. As labor and ideas are transferred fairly freely between countries, the region’s industrial landscape is being reshaped.
In the northern Taiwanese city of Hsinchu, the island’s high-tech hub, Indian engineer Pallavi, works for Taiwan Semiconductor Manufacturing Company, the world’s largest contract chip maker, as a coordinator between the company and its corporate clients.
Her promotion to the important post after only three months of working for the company created a buzz among its employees. But she remains undaunted by the challenge and is confident that she can learn quickly and create solutions for the company.
TSMC controls half of the global contract chip manufacturing market. The company is now often asked by its clients to support their semiconductor research and development efforts right from the design stage.
Senior executives from WeBank, a unit of Tencent Holdings, and Nanyang Technological University signed an agreement to cooperate on AI-based new financial services in Singapore in January.
With such a wide remit, TSMC has turned elsewhere to look to fill its ranks, particularly for joint development efforts with overseas clients. India is one of the countries that TSMC has turned to, according to Connie Ma, vice president in charge of human resources.
India has a wide, well-educated and technologically and mathematically advanced workforce. This has made India a major source of IT engineers who have helped the growth of U.S. tech companies.
Now, many tech-savvy Indians are opting to work for Asian companies, according to Pallavi.
And in Asia, the opportunities abound. Taiwan, like some of its regional peers, is a manufacturing powerhouse, while India is a software juggernaut. Singapore, a small country with only 5.6 million people, is thriving on its sophisticated financial and artificial intelligence expertise.
Such economic and industrial diversity is driving regional migration of human and technological resources.
A recent example is the collaboration between WeBank, the online banking arm of Chinese internet conglomerate Tencent Holdings, and Singapore’s Nanyang Technological University in developing new artificial intelligence applications. This collaboration involves 35 experts from both sides jointly developing new AI-based asset management consultation services.
The university is ranked second in the world in terms of the total number of citations received between 2012 and 2016, according to analysis by Nikkei and Elsevier, a Dutch research company. NTU has the academic and technical background while WeBank has the ability to harness the tremendous amount of personal financial data generated daily by China’s consumers to develop and refine its technologies to provide quick, five-second credit decisions.
Such labor and intellectual property flows will plug the development gap between Asian countries. From the 1960s through 1990s, Asian economies had developed at a different pace, with some far outgrowing others.
But the wave of digital innovation in recent years has triggered a paradigm shift. The advent of the internet, coupled with the availability of cheap, easily accessible IT equipment such as smartphones has leveled the playing field for Asia’s entrepreneurs who can find niches to establish online businesses, whether they are in the Philippines or in Singapore.
Ichiro Sakata, a professor at the University of Tokyo, refers to this new pattern of regional economic development as “parallel running,” where a new economy slowly takes over the role of a more developed economy while both are simultaneously growing.
This new model facilitates the development of better technologies than those available in advanced economies and erases the significance of past achievements, Sakata said.
Indeed, smartphone-based financial and ride-sharing services, have grown much faster in some Asian emerging countries than in Japan and other industrialized nations. This has benefited Grab, a ride-hailing company in developed Singapore, and also Go-Jek, its peer in less-developed Indonesia.
The potential is still huge. For example, Philippine consumers are the most avid users of social media in the world, each spending four hours and 12 minutes daily on platforms like Facebook and Instagram, according to We Are Social, a British research company. Indonesians are ranked fourth, each spending three hours and 26 minutes on social media daily. Such high penetration provides many opportunities for local businesses, which will in turn help domestic economies.
Asian countries can also devise technological solutions for the raft of infrastructure problems that hamper their economic development, including poor ATM networks and chronic traffic congestion. These infrastructure-related issues can provide opportunities for entrepreneurs in the digital economy.
But with this fast rate of growth comes a bigger problem. Rising technology stars in Asia face new challenges due to growing friction with industrialized nations like the U.S.
Huawei Technologies’ rapid rise, symbolic of China’ ambitions to achieve technological supremacy, has alarmed U.S. President Donald Trump, who has tried to ban the company’s products and technologies from the next-generation wireless telecom network in America.
Huawei’s suppliers, including TSMC, are suddenly facing murkier business prospects.
For many up-and-coming Asian companies, Huawei’s plight offers a taste of what is to come. As it embraces a new successful formula for economic growth, Asia probably needs to brace itself for increased conflict with established powers.