Filed under: Comment
Do you know what those little things you can see in the above piccie are?
They are massive cargo ships coming in/out of the World’s busiest port … Singapore.
Everyday, literally hundreds of these superboats come in and out delivering or sending millions upon millions of goods … from iPODs made in China … Computers made in Taiwan … or Furniture made in Thailand … all around the World.
Infact, World demand is so high that the cargo boat building business is in a massive growth phase. How about that eh?
Just like people who predicted the television would kill the cinema … people said the plane would kill the seas … but they are wrong, they are so, so, so, so wrong.
Actually, business is so good that they are trying to build the ultra-cargo ship … something that can hold upto 30,000 huge containers per journey – which to help put into some kind of proportion, is THREE TIMES more than the current super-cargo ships can manage.
However that isn’t what I want to write about. Oh no … it’s about how the East are winning off the West’s belief in pure innovation.
You see many people are under the misguided belief that Asia innovates … but they don’t. Infact, throughout their history, they have been practitioners of exploitation – be it from SONY televisions to Toyota cars.
[Only recently have certain Asian brands started to try and be true innovators - Samsung / LG for example - but they are still the exception and their financial modeling plans have been questioned by many economists around the World]
Sure they have come up with certain innovations of their own … but in the main, they’ve always been ‘enhancing’ an existing technology/capability rather than creating something totally new from scratch.
Do Half Time’s look familiar? Bit like KitKat? Yep …
You see in most parts of Asia, their philosophy is to make enormous cash by either making or delivering the products the West spend years and billions trying to create.
It’s not about creation … god no, there’s far too many risks in that … it’s about fulfilling someone else’s dream. Of course if something becomes really, really, really successful, then they’ll do something about it – however it tends to be either ripping it off mercilessly or doing their best to screw the business potential up for them.
There’s a rather famous story of a Chinese Government Department who invited a German train building company to come and ‘present their technology’ to them.
With dollar signs in their eyes, the German company flew over … and in a matter of months, built a mile of track so that they could show off their train to the best of their ability.
The Chinese Government Department took a close look at what the Germans were proposing … thanked them for their efforts … then sent them on their way and built an identical track it for themselves. Who needs to invest in expensive R&D when you can steal it from someone else.
Ethical? No. [but lets face it, lots of Western companies are hardly ‘posterboy’s’ for ethics]
Clever? As embarrassing as it is to say it … yes … it sort-of is.
You see I am convinced that China is NOT this land-of-opportunity that so many Western companies think.
Sure there’s 1.4 billion people there … but when you take away some key issues [like 60% of the people live in rural areas!!!] the opportunity gets much smaller.
Sure 40% of 1.4 billion is still a huge number … but when you take away other considerations [ie: poverty levels / distribution costs / income levels / advertising costs etc etc] the investment needed to stand even a 2% chance of profit is outrageous.
I personally blame us shareholders … because we’re constantly demanding more and more return from our investments, thus subliminally pushing companies to find new territories to sell/expand even if in the cold light of day, their potential is no way near what the ‘hype’ suggests.
My favourite bit is that so many Western companies target Shanghai … because apart from the fact it is the most un-Chinese of China, the population have so got used to Western brands trying to get a foothold in the country, that they have started to think they are ’special’, thus alienating themselves further from the rest of China which inturn, minimises the chances of a Western brand to make it there.
Don’t get me wrong, some Western brands are making it big out here and whilst their impact is changing certain aspects of culture [from diet to marriage] the real power is not with the Western companies who own the company … but with the Asian brands who are making and distributing it for them.
We’ve seen how retail brands like Asda, Tesco, Woolies and Sainsbury’s are now more powerful than the once powerhouses of Coke and Unilever etc … and we can definitely expect to see it with Asia versus the West … so the next time someone say’s innovation is where the money is at, think about the way they do it in Asia and just hope the Chinese and Indians never get it together because with their two astounding skill-sets [Manufacturing and Technology] they could quite simply end up ruling the World!
17 Comments so far
Leave a comment