…is probably buried deep in his/her books/lab equipment/ science kit somewhere in China or Japan (or India).
A recent survey reveals that “only one in five Americans believe that the “next Bill Gates” will come from the United States“.
Further, “practically half of all Americans (49 percent) believe that the next great technology leader will come from either China or Japan.”
The picture gets more complicated when the data is drilled down. There is a generational difference in perceptions re. Japan and China’s ability to produce the next Mr Gates…and amongst higher-income earners, US is still considered to be the place where the next Bill Gates would come from (followed by India and China).
The complete results are here and a full analysis (incl. cross-tab results) is here
Interesting quote from a fairly balanced article about the challenges facing India and China in the years to come (“Alarm bells ring for ‘growing’ India, China”):
“While the two countries face very different challenges, Pei Minxin of Carnegie Endowment for International Peace, a Washington-based think tank, said India could outperform China in the next decade.
“If I have to pick and choose, I would pick India as the country that is most likely to outperform China in the next decade or so, probably even longer,” he said.”
A feature on “Investing in Japan” in yesterday’s Wall Street Journal (Dec 14, ’06, Pg 6) caught my eye with a very powerful and compelling graphic of the size of the economy.
It had a map of Japan with different regions and a comparison of their GDPs with different countries (See scanned map here).
The graphic immediately brought to mind a point I have made several times before about the indifference that most people have about Japan. In spite of the economic ascendancy of China and India (which is no doubt relentless and will continue for a long time), Japan remains the world’s second largest economy ($4.7 trillion in ’05 vs. $2.2 trillion for China*) and a showcase of leading-edge technology in mobile communications, displays, new materials and more recently solar and alternative energy (see Shin’s recent comment on my post about parking lot solar panels).
So it is surprising that not more people pay attention to what is happening there in terms of technology and innovation.
What drives this apathy?
No doubt distance is a barrier – but more than that, it may be a business culture that is still notoriously difficult to understand (in terms of decision-making and process) and formal behaviour that is inscrutable to most observers. I will shut up at this point as no doubt my good friend Shin will have something to say on this…(Shin, feel free to rip me apart if I am out of touch…)
Having said that, things are changing…In the last few years that I began visiting Japan once again (after a hiatus of almost five years), I have met VCs like Shin and Mori (who sound more like Silicon Valley than anywhere in Japan), have seen shoe-shine boys outside Tokyo station and have consistently found things cheaper than in London (not to mention the Japan-only models of products which are a style apart)
And slowly but steadily, more and more gaijins seem to be paying attention to what is going on in the country. I will certainly be watching for many years to come.
* Although on a PPP basis, China at $8.8 trillion is more than double Japan at $4.0 trillion; India is a shade below at $3.66 trillion
I first met Susan Leiby back in August at the ASVC Event that we did in Palo Alto.
After the panel, Susan (who is a Senior Consultant at SRI) and I talked about the innovation eco-systems in India and China and how they were evolving…Susan mentioned that SRI was, in fact, conducting a survey to identify the strengths and weaknesses with regards innovation in India and China relative to the United States.
A few weeks ago, Susan sent me the results from the survey and graciously granted me permission to reproduce a couple of slides on this blog.
The slides make for an interesting comparison. The biggest surprise to me was that respondents to the survey* perceived “China and India at or near parity with the U.S. in ‘ICT development,’ ‘quality of human capital’ and ‘government receptivity’ by 2015”
…that’s very interesting – especially the point about “quality of human capital”…
There were also several qualitative comments on why the US is vulnerable to loosing its leadership (in tech & innovation). I will mention just two:
“(the US government’s) ill-conceived regulations and protectionism. Examples: U.S. financial markets are losing their attractiveness because of regulations such as Sarbanes-Oxley. Because of telecommunications regulations, the U.S. has become a third-world country for mobile communications and broadband”. (sic)
“(the)… Arrogance and complacency of leadership…not enough emphasis on education; High costs and inability to learn about “developing” countries…”
* The National Innovation Systems survey was carried out by SRI Consulting Business Intelligence and polled entrepreneurs, VCs, and CTOs or other people directly involved with technology development in India/China.
Several months ago, I wrote a post on how some of the best small companies and start-ups were going global from Day One of their operations.
Then, a few weeks ago, I wrote about a small Indian company, funded by Sequoia that, in a bold and ambitious move to go global, had opened a coffee shop in (of all the places) Vienna in the heart of Europe…
Last week, I read Part II of this story: “Cafe Coffee Day, India’s largest coffee cafe chain, has opened its second outlet in Vienna…” The company’s Director, Naresh Malhotra said, “We are planning to open more outlets in and around Vienna and, by establishing ourselves in Austria, we plan to enter the German coffee market.”
Its marketing head said, “…we are on a constant lookout for every potential opportunity“.
I suspect that this is just the beginning.
It is not just large, stolid European and US businesses that will face the brunt of competition from China and India…mom-and-pop coffee shops are vulnerable too.
What is neat is the way that these small companies are managing the challenge of cultural barriers…Café Coffee Day claims “…our differentiating factor is that we have employed for service a young team that has been hired locally.”
The article quoted Arvind Singhal of Technopak Advisors as saying that, “”The very reason why they (Coffee Day) are looking out of the country may be because they have realised that the market has reached saturation here.”
For a moment I thought I was reading the story of how Japanese companies became global leaders in their markets…
HBS Working Knowledge recently carried a story on the latest Business Competitiveness Index report titled, “U.S. Tops Business Competitiveness Index 2006″. The annual survey is carried out by Michael Porter’s Institute for Strategy and Competitiveness at HBS.
Not Surprising bits:
1. United States topped the list
2. India improved and China fell in their respective rankings (vs. last year)
3. China’s “decline was driven especially by higher levels of corruption, weaker assessment of buyer sophistication, and concerns about labor relations”
4. India’s move up was “aided by improvements in its business environment and increasing levels of company sophistication”
Surprising (to me) bits:
1. Germany was second on the list (impressive)…due to from its orientation on exports, the unique competitive positions of its companies, and the quality of its legal and regulatory framework.
2. The gap between India (at 27th) and China (at 64th)
I believe India scored on intensity of local competition, financial market sophistication, and intellectual property protection + sophistication of company operations (which the report says, can account for “80 percent of the variation in GDP per capita across countries“)
There is also a video interview with Porter here.