How Asia Can Rev Up Its Engine
Two years have passed since the worst of the financial typhoons that shattered Asia's prosperity. Economic growth has rebounded smartly. Most countries in the region are racking up record exports and hard currency reserves. Yet this remains a perilous recovery, one that disguises deep, intertwined problems ranging from corruption to rotten financial systems to poor corporate management.
The burst of tech-savvy startups and the explosion of technology-related spending in the region herald a new beginning for many companies and countries. Increasingly, Asians see that their future is in spurring innovative companies, not financing lumbering dinosaurs that crank out low-profit commodity items. The formidable scientific and engineering talent throughout the region, especially in northeast Asia, augurs well for a knowledge-intensive economy that can build on its traditional strengths in manufacturing to find more profitable niches. And in that environment, economic and corporate success will depend on openness, accountability, and merit.
But this revolution has a long way to go. Basic education must encourage risk-taking instead of rote learning. Better links must be built between government-sponsored research institutes and industry so that technology can be commercialized rather than languish unused. Venture capital, stock markets, and banks need to encourage innovation. Salarymen need to be encouraged to take the leap to become entrepreneurs. All Asians need to know that to get rich is glorious. They may also learn that to fail is O.K., too.
It's not easy to build a risk-taking, bottoms-up economic system, especially in a region where past success owes much to heavy-handed governments. This is a revolution that will be every bit as hard as building the mass-produced manufacturing economies of the last generation. But the cost of failure will be a region that is hobbled even as the pace of technological and economic change accelerates in much of the rest of the world. There is really no choice.