Southeast Asian SMEs strive for breakthrough

INNOVATION is the cornerstone of progress that moves civilizations throughout history. However, if you focus on the landscape of Southeast Asia, with its rich cultural diversity and thriving economies, a glaring gap in innovation emerges. This makes us wonder why Southeast Asian countries are struggling despite their vibrant SME sector. Let’s explore this further and envision a Southeast Asian future where innovation is welcomed with open arms.

Historical stories — A reassessment of innovation in Southeast Asian context

When Southeast Asia reflects its ancient cultural achievements and impressive architectural marvels like Angkor Wat, a closer look reveals a significant difference in global influence. Despite these remarkable achievements, innovation in Southeast Asia has often remained localized and has not left a lasting mark on the world scale. Take for example the architectural masterpieces of the Khmer Empire, such as Angkor Wat. Although respected regionally, they have not received the same international attention as iconic structures from other parts of the world, such as India’s Taj Mahal or the Great Wall of China. Though there are many fascinating stories in Southeast Asia’s mythology and folklore, the region hasn’t seen any significant innovations that would put it on the map of the world’s leading innovators.

Present situation

As Southeast Asia’s small and medium-sized businesses (SMEs) adjust to the modern world, they confront several obstacles when attempting to compete in the global innovation arena. Compared to the global benchmark, the region’s patent applications are still remarkably modest. According to the Asean Intellectual Property Portal, Southeast Asia accounted for approximately 35,000 applications in global patent applications in 2022. This number is astonishingly low when you consider the region’s population of over 650 million. Contrasting this with leading innovators such as China and the United States, which have millions of patent applications, highlights that difference. World Intellectual Property Organization (WIPO) findings show that Southeast Asia’s patent activity remains disproportionately low compared to its population and economic potential. This reflects on how combined efforts to strengthen the environment of innovation in this field can raise its level globally. Some obstacles that stand against this innovation include budget limitations, documentation, and the emphasis on incremental innovations. The lack of patent applications highlights the necessity of developing an ecosystem that promotes creativity. Using robust R&D ecosystems and enabling regulations, nations like Singapore and Malaysia have made progress in this approach by encouraging innovation. This illustrates the link between technological advancement and a supportive atmosphere for creativity. Southeast Asian nations must give top priority to laws that encourage R&D spending, hasten the patent application procedure, and promote an innovative and risk-taking mentality if they hope to close the innovation gap. Fostering innovators also requires funding educational initiatives that promote entrepreneurship and critical thinking.

Mapping the next steps — developing an innovation ecosystem:

Southeast Asia will prosper when governments, corporations, and academic institutions work together to create an innovation hub that spans all industries. Fostering a strong innovation culture that requires strategic investment in infrastructure, encouraging SMEs to prioritize R&D and seamless collaboration between academia, industry and government is paramount to realizing this vision. Encouraging SMEs to invest in R&D is essential to innovation. Governments can implement policies that provide tax incentives or subsidies to companies engaged in R&D activities. For example, the Investment Authority of Thailand offers generous tax incentives to companies investing in R&D or operating in high-tech sectors. In order to encourage SMEs to take on ambitious projects and reduce the risks associated with innovation, governments can also offer support through grants, subsidies, and mentorship programs.

Conclusion

In summary, a fundamental change in strategy and mindset is necessary for Southeast Asia’s journey toward innovation. The first thing to work on is the mindset of people that should intend to make groundbreaking innovations and not just the modifications and improved versions of already existing inventions. Further they must be provided with a sage that should establish a future characterized by energy, inventiveness, and global innovation dominance by appreciating its previous successes and realizing its present difficulties. Southeast Asian SMEs now have the chance to take the lead in bringing about change and progress globally. Southeast Asia has the potential to become a worldwide force if it adopts innovation as one of its core values.