Rethinking the Asian Innovation Engine

Although there are some significant differences, Japan, Korea and China share similar characteristics in their innovation framework.

Japan used to be a cheap product exporter, and then developed into a high-tech powerhouse.

Korea followed suit, becoming a high-tech machine in some areas.

China is following the similar innovation trajectory from being cheap product producer to becoming ODMs

Japan, Korea and China have been able to export to the U.S. with their currencies undervalued and the USD inflated. They have also been the U.S. bond holders.

It can be contended that MNCs have benefited most from this peculiar East and West relationship: the U.S. being the consumer market and mercantilist trading partners being net exporters and bond holders.

There are also geopolitical issues involved in this global production/innovation framework.

Further, the innovation engine across the Asian countries have been more hampered than helped by their big governments, big banks and big corporations over the long run.

They all have faced (is facing) asset bubbles, which have afflicted them.