Emerging Markets: A New Center for Global Innovation by Dr Shi, CEO and Founder of Suntech
- 29 February 2012
Dr. Zhengrong Shi, CEO and Founder of Suntech, reflects on last month's World Economic Forum in Davos, focusing on emerging markets as a new center for global innovation.
Set in the Swiss Alps, the World Economic Forum Annual Meeting in Davos converges global leaders to discuss the most pressing issues we are facing around the world today. Although the discussions this year centered on the financial crisis in Europe, I noticed an increased focus on the role of emerging markets like China and India in driving the global economy through innovation. Are political and business leaders beginning to recognize these countries’ contributions?
The discussions at Davos lead me to believe that the perceptions are changing, and rightly so.
The East was long considered the world’s factory workshop, churning out products conceived of and developed in other parts of the world. But today, government and industry in certain Asian countries are closing the gap with Europe and the United States when it comes to research and development, as well as pushing innovation in how goods and services are provided. In the process, they are bringing new ideas to market and in some cases changing the way entire industries function.
Take the example of the Indian multinational Tata Motors. With the middle-class boom in India, Tata diversified from commercial vehicles to develop one of the smallest cars in the world, with the goal of targeting the lower price point in the Indian domestic market; indeed, the booming middle class was searching for an affordable family carrier. The Tata Nano, one of the smallest cars in the world, became a hit In India amongst the Indian middle class.
In another example, Mumbai-based Godrej Group developed a low-cost refrigerator – billed as the $69 cooling unit for rural India — that can be powered by battery. ChotuKool started as a pilot project; today, it is hailed as a market success and is an example of innovation that helps create an entirely new market and value network.
Alibaba in China is re-inventing e-commerce through popular portals designed for various market segments with platforms such as Taobao, Tmall and eTao. Taobao today is the biggest B2C and C2C online shopping platform in China, registering more than RMB 40 billion in transactions last year.
Other examples abound with the stories of companies such as Grameen Bank of Bangladesh, BYD and Tencent of China, UNILAB of the Philippines, Bharti Airtel of India, and Asus of Taiwan.
At Davos, I met number of Asian entrepreneurs, and their collective vision for our global future was nothing short of inspiring.
Make no mistake – this rise of these Asian ‘tigers’ comes down to years of dedication and perseverance. There was no single glamorous or disruptive breakthrough — much less a made-for-TV moment. Rather their success was a culmination of hard work and incremental innovation.
Similarly, renewable energy companies in Asia have become global brands through increased emphasis on innovation, and the belief that renewable energy will assure our energy security for the future.
In Suzlon, Indian businessman Tulsi Tantihas built one of the world's largest wind turbine companies in an incredibly short amount of time. When Tanti started his company, the wind energy industry supply chain wasn’t efficient – the wind turbines were supplied by the manufacturer, installed by another company, and maintained by a third. By the time the wind turbine was up and running, the customer was often at his wit’s end. Tanti, realizing that a change was sorely needed, came up with the idea of offering a complete package of wind energy services. Suzlon would simply handle everything. The innovative aspect of Tanti's idea had more to do with the service he was providing than with any feat of engineering; but it would revolutionize the wind energy business.
At Suntech, we consider technological innovation to be the cornerstone of our success. All of Suntech’s research and development programs have a clear goal: to reduce the cost of harnessing solar energy and increase the performance of solar cells and panels. In fact, we have more staff working in our R&D departments than in sales and marketing, which is a clear indication of where our priorities lie.
Our innovations — which include identifying and incorporating alternative raw materials as well as continually tweaking our manufacturing processes — make our panels among the most efficient in the world, and allow us to offer our products at increasingly lower costs. This is helping spawn new markets for solar worldwide, especially as solar power approaches grid parity in more and more markets.
This success did not happen overnight; rather, it was the result of years of development by our laboratory scientists, alongside collaborations with leading solar research institutes at the University of New South Wales and Swinburne University.
Certainly, government support has been critical to the development of sustainable and fruitful technology markets, and thankfully, green energy initiatives meant to spur innovation are on the rise in Asia. In 2011, India posted the biggest growth in clean energy investment, rising 52% over the previous year to $10.3 billion.
Meanwhile, China has become the world’s second largest investor in renewable energy industry.
This bodes well for the emerging markets of Asia. I believe that we’ll continue to see certain countries develop into epicenters of innovation, with policy winds at their backs, a firm dedication to R&D investment, and a belief that technology can help change the world for the better.