The views expressed in this presentation are the views of the author and do not necessarily reflect

the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development
Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee
the accuracy of the data included in this paper and accepts no responsibility for any consequences
of their use. Terminology used may not necessarily be consistent with ADB official terms.

What Drives Innovation in Asia?

Discussant: Dr. Bihong Huang

Research fellow, ADBI
13 Feb 2020

Copyright © 2020 by Asian Development Bank Institute. All rights reserved.

Report Summary
• The report first plots the current landscape of
innovation in Asia and concludes that Asia has
become one of the global hubs of innovative activity.
• The report then examines the role of human capital
in innovation in developing Asia and underscores
the importance of education system and
entrepreneurial ecosystem in fostering an
innovative culture.
• In the last part, the report analyzes the role of
intellectual property rights, financial architecture and
cities in advancing innovation activities
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Comment 1: Innovation network in Asia
The Asian innovation network is increasingly localized in terms
of concentration of talent, capital and technology
Talent: China and India could account for more than 60 percent of STEM
graduates in major economies by 2030.

Technology:
• Japan: robotics, AI and healthcare
• Korea: ICT, smart factories and farms, future vehicles and data economy
• Singapore: service and digital economy, urban solutions, smart manufacturing
• China: internet, AI, digital economy, 5G and quantum computing

Capital
• Japan and China tend to raise startup funds domestically while emerging
and frontier Asia are experiencing strong capital inflows from Advanced
Asia and China
• In 2018, 71 percent of venture capital funding in Asia is intraregional.

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Comment 1: Innovation network in Asia

• Advanced Asia and China: provide strong innovation

foundations, capital and knowledge to power innovation in
other Asian economies
• Emerging and Frontier Asia offer huge opportunities to
deploy proven business models, capital and innovative ideas
• The Asian innovation network not only help emerging and
frontier Asia participate in the GVC, but also facilitate the
sharing of new ideas and foster the next wave of technology
breakthroughs.

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Comment 2: Innovation in digital Age
• Digital economy in Asia is expected to triple in size
and reach $240 billion by 2025
• Investment in knowledge-based capital grew at a
compound annual rate of 6.4 percent between 2006
and 2016
• Preparing SMEs for innovation in digital age
• Facilitate the entrepreneurship
• Reach wider and more sophisticated customers both offline
and online
• Leverage the power of big data for innovation

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Comment 3: measurement of
innovation for Asian private companies
Most reports and research on this topic rely on WBES
• Subjective indicator
• Old cross-section data (2012, 2013, 2014)
• Limited sample
Establish a comparative country data platform
• construct country and regional innovation index
• generate regular reports
• updating and upgrading ADB SME monitor 2014

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Conclusion
Innovation is the fundamental force for Asia to achieve
sustainable growth and avoid middle income trap
The Asia century of innovation has begun. Further
actions are needed

• Strengthening regional integration in innovation

• Preparing SMEs and startups for innovation in the digital age
• Establishing a data platform to monitor the regional
innovation activity and flow of funds for innovation

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Thank you very much!