Developing East Asian countries underperform in adopting innovation

The World Bank said all 10 developing East Asian economies, except China, have innovated less than expected in relation to their per capita incomes.
By: | March 1, 2021

In its “Innovation Imperative for Developing East Asia” report, the World Bank covered 10 middle-income countries in the region – Cambodia, China, Indonesia, Lao PDR, Malaysia, Mongolia, Myanmar, the Philippines, Thailand and Vietnam. 

The report attributed the poor performance of nine of these countries to insufficient information on new technologies, uncertainties in projects, weak firm capabilities, poor staff skills, limited funding options and the lack of government support, which are usually not aligned with the needs of the private sector. 

“Countries in developing East Asia must find new and more effective ways to increase productivity growth as they seek to build on past economic success and move progressively from middle- to high-income status. Indeed, their high-income neighbours – Japan, the Republic of Korea and Singapore – have all used innovation as a vehicle to improve efficiency and boost their incomes with great success,” it said. 

A World Bank survey of researchers in the Philippines, Malaysia and Vietnam found that their governments have increased national research capacity, but the overall effect is still not clear. 

Only a small percentage of companies in the Philippines, Cambodia and Malaysia have invested and engaged in R&D, but even the most intensive of these still fall below the benchmark set by Israel. 

READ: Driving organisational growth with L&D as the focal point

The World Bank said more than 50% of innovating companies in the Philippines, Indonesia, Malaysia, Myanmar, Thailand, and Vietnam are struggling to employ new workers due to the lack of managerial and leadership skills and poor basic education, as seen in the low scores in international education assessment tests, according to BusinessWorld.