Why Technology Is Building Asian Power
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In ancient times several Asian civilizations developed leading technological knowledge that contributed to their temporary economic predominance. By contrast, the world of the last centuries was largely designed by Western technologies, especially after the Industrial Revolution fostered immense innovation and growth in Europe and later in North America. In 1870 China was still the largest economy in the world but it was soon surpassed. The West consolidated its technological and economic global dominance. The rest of the planet, mostly poor and uneducated, was viewed in the West mainly as a source of raw materials and cheap untrained labor. But in the 21st century something is structurally changing.
In the last decades, the economies of most developing nations have been growing at a high and sustained pace, which turns them, technically, into “emerging economies” of various sizes. Although starting from a low base, the economic growth of those countries has been impressive. In the decade 2000-2009 the advanced economies grew at an average 1.8% annual rate, while in the developing and emerging economies that growth rate was 6.1%. This group of less developed nations already controls over half of the global economy.
Within the various regions of the world Asia is, by far, the main engine of the booming world economy.
In general, the acceleration of growth in the developing world owes a lot to factors such as globalization with its connectivity and a freer global trade system that gives them easier access to rich markets. But something else helped the developing world, especially Asia, to rapidly climb to unseen levels of material improvement, quality of life and prosperity – Technology.
Before China began opening, Japan and the “Asian Tigers” had begun not only prospering but also developing and using very advanced technologies.
China’s reforms and its opening to the international markets allowed its economy to expand overwhelmingly, consequently obtaining financial means to develop modern infrastructures, competitive companies and, gradually, much richer citizens. China was terribly poor just decades ago, relying on low technology and cheap workers, but now it is the biggest e-commerce market in the world, with ultra-modern technology everywhere.
Many Westerners feel confused with the projection of economic power from less developed regions, especially East Asia. But this is just the beginning of a New World. Technology in those nations is one of the many surprises for the West. The correlations of world technological power are deeply changing.
Developing nations are recovering the lost time with amazing speed. The examples of China and India are enlightening, but they only represent the beginning of a systemic new World Order that will be gradually more influenced by developing economies, which now contain 85% of humanity.
In this century centered on information technologies, China is already their largest exporter in the world, while India dominates one third of the world’s international outsourcing of software services. Both are nuclear powers. Together they represent over 1 third of the planet’s population. China became the global leader in fields like artificial intelligence and accelerates its space program, having landed a robot rover on Mars.
When China began its post-Mao economic modernization, it did so in areas such as Shenzhen and Zhuhai, then poor fishing villages. Quickly these regions became international powers in labor-intensive industries such as toys, footwear and textiles. But that time of low tech and cheap labor has passed and today those regions are full of high-tech companies leading in the world. Today Shenzhen has a population larger than London and it is the world’s capital of technological hardware development and a leading world center of telecommunications technology with companies like Huawei. It is also a leader in genomic sequencing.
India, despite the poverty of part of its population, already has a highly educated middle class and competent staff, being prominent in several sectors of state-of-the-art technology.
Industrialization in East Asian countries began with low added value products, poor technology and cheap labor. But that was a transitional phase, which naturally led to greater sophistication, increasing quality and strong presence in global markets. These nations began being competitive through price. Then, competitiveness became based on quality, disruptive innovation and top technologies.
China and India have something that no other country possesses, a massive potential internal market. The middle class in China is already numerically larger than the population of the United States or the European Union.
India and China began developing their economies by copying technologies to capture consumers around the world. But the time of copying is ending for these countries. Now, both countries already develop advanced research and became pioneers in several advanced technologies. China and India are the countries that now produce more graduates in science and technology. Climate change is creating a future huge market for renewable energies, but few know that China is already the world leader in this field.
China’s Lenovo is the world’s largest manufacturer of personal computers and South Korean Samsung is the top producer of smartphones. China produces more electric cars than Germany, the United States, Japan and France combined. Asia is climbing as a hub of technologies that will shape this century. Contrary to what some might think, Asian technological innovation and entrepreneurship spreads much beyond China and India. Most East Asian countries are impressively producing new business models, products and services based on frontline technologies.
The projected biggest economies (GDP) within 9 years (2030) will probably be China, India, the United States, Japan and Indonesia. That would mean that within less than a decade 4 of the 5 largest world economies would be in East and South Asia. In GDP terms China is already the biggest world economy.
Technology was a factor of Western dominance in the past. Now technology is becoming a pillar of Eastern emergence, particularly in East Asia. The gravity center of world power is flowing from the West to the East.
Asian tech is rising sharply. From technological prominence stems a more competitive economy, financial strength, political influence and military capacity. In other words, technology builds Power. We are seeing the birth of new patterns of Global Power.