The city of Cupertino, California, is only about 15km from Stanford University, where I teach and live. It is home to the headquarters of Apple, a global leader in the computer and smartphone industries. It is also home to many Indian and Chinese engineers who are essential to Silicon Valley's technological innovation. One can easily find a variety of Asian restaurants and shops along the palm tree-lined streets -- an interesting Californian scene with a distinctly Asian flavor.

Many Asians -- businesspeople, officials and experts -- visit Silicon Valley hoping to unlock its secrets, to learn why it is such a hotbed of innovation. One known "secret" here, often overlooked by Asian visitors, is the importance of cultural diversity. More than half of the area's startups, including Intel, Yahoo, eBay and Google, were established by immigrants, and these companies owe much of their success to the contributions of Chinese and Indian engineers. Cultural diversity can be found throughout the schools, stores and streets, as well as the enterprises, there.

In Israel, too

The circumstances are quite similar in Israel, another economy known for technological innovation. Following the collapse of the Soviet Union in the early 1990s, Israel admitted about 850,000 immigrants. More than 40 percent of the new arrivals were college professors, scientists and engineers, many of whom had abundant experience in research and development. These people played a critical role in promoting economic development and scientific and technological innovation in Israel. Many languages besides Hebrew can be heard on the streets of Tel Aviv, one of the country's largest cities.

It is no accident that Silicon Valley and Israel have become global high-tech centers. They opened their doors to a wide range of talented immigrants. Above all, an atypical sociocultural ecosystem -- a culture that respects and promotes the value of diversity -- is alive in both places.

In the United States, diversity is a key criterion in college admissions and faculty recruitment. Although "affirmative action" has disappeared in many parts of the country, diversity has come to play a key role in American university policies. Most American colleges, including Stanford, have a "diversity office" to promote diversity among students, faculty and staff. At Stanford, white students constitute less than 40 percent of the student body, and almost a quarter of the faculty come from minority groups. Similarly, only five of the 16 staff members at our Shorenstein Asia-Pacific Research Center are Caucasian, with the rest from ethnic and national minorities.

 The same can be said of leading American corporations, many of which have institutionalized "diversity management" to capitalize on the range of individual differences and talents to increase organizational effectiveness. Of course, basic knowledge and skills are prerequisites. But Americans seem to firmly believe that having a variety of backgrounds and experiences can help hatch new ideas and innovative technologies. Perhaps this is why they say that culture accounts for 90 percent of the innovation in products from Silicon Valley, with technology claiming only 10 percent.

The power of diversity

Scott E. Page, professor of complex systems, political science and economics at the University of Michigan, shows in his book "The Difference" how "the power of diversity creates better groups, firms, schools, and societies." In his view, collections of people with diverse perspectives and heuristics outperform collections of people who rely on homogeneous ones, and the key to optimizing efficiency in a group is diversity. In this work, Page pays particular attention to the importance of "identity diversity," that is, differences in race, ethnicity, gender, social status and the like.

To be sure, Asian countries such as Japan and South Korea are different from settler societies such as the U.S. With the influx of foreigners, however, even such ethnically homogeneous Asian societies are becoming multiethnic. In addition to unskilled labor and foreign brides, the number of overseas students and professors is rising at Japanese and South Korean universities, while Japanese and South Korean companies are actively hiring foreign professionals. Both countries are opening their doors to foreigners, though in limited numbers, and have made multiculturalism a key policy objective.

Still, they fall far short of recognizing the value of diversity. While Japanese and South Korean institutes of higher learning have been trying to attract more foreign students, they have been doing so mainly to make up for the declining student population at home and because university ranking agencies use the ratio of foreign students and professors as a key yardstick for measuring internationalization. The approaches of these two countries to multiculturalism are also largely focused on assimilating foreigners into their own cultures and systems. People from abroad are seldom accepted as "permanent" members of their societies or regarded as valuable assets. Japan and South Korea may have become multiethnic, but they are not multicultural.

One of the biggest challenges facing foreign residents in Japan and South Korea is the lack of understanding of their religious and cultural beliefs. Indian engineers working in South Korea complain of the poor acceptance of Indians by the local population, and of an especially poor understanding of their religion and culture. Foreign professors teaching at Japanese universities tell me they live as "foreigners," never accepted into the "inner" circles. It is unlikely that these talented people would like to work long term for universities and enterprises that are unable to embrace differences in skin color and culture. Under these circumstances, even if some foreign professionals happen to be hired, they may not be able to realize the full potential of their abilities, let alone bring about innovation.

All these people with different ethnic and national backgrounds should no longer be regarded simply as "temporary" residents to fill particular needs. Rather, by promoting the cultural diversity of Japanese and South Korean society, they should be viewed as important assets and potential sources of innovation. It is an urgent but difficult task to institutionalize the value of diversity in societies long accustomed to the notion of a single-race nation.

Born on campuses

A country's global competitiveness can hardly be improved if its society is reluctant to respect differences and understand other groups. Universities, in particular, should help their students experience diversity through the regular curriculum and extracurricular activities. Foreign students can serve as excellent resources for promoting diversity. Universities are ideal settings for various groups of students to meet, generate new ideas and interact with one another. It is no accident that many of the innovative ideas associated with Microsoft, Yahoo, Google and Facebook were all born on American university campuses, where diversity is embraced.

Empirical research should be carried out to examine how cultural diversity can bring about technological innovation in Japanese and South Korean society. Based on such studies, governments and private enterprises should take into account diversity in personnel hiring, training, management and evaluation. These same institutions should also systematically work to create and support an organizational culture that values diversity.

Could those Indian and Chinese engineers working in Silicon Valley have brought about the same kind of technological innovation if they had remained in their own countries? Could they accomplish the same feat in Japan and South Korea? How can Asian countries create the kind of ecosystem necessary for promoting a flexible culture of accommodating a broad spectrum of talents? We first need to reflect deeply on these questions before trying to emulate the success of Silicon Valley.

Shin recently coauthored the paper, "Embracing Diversity in Higher Education: Comparing Discourses in the U.S., Europe, and Asia" with Yonsei University Professor Rennie J. Moon. It is one outcome of their research project, Diversity and Tolerance in Korea and Asia. This Nikkei Asian Review article was originally carried on Nov. 20 and reposted with permission.

A middle class is emerging in China, and simultaneously, its population is rapidly aging. These two phenomena are impacting the country’s traditional consumer habits, including spending on healthcare. Experts say private-sector services are one important part of the future of China’s healthcare system, and perhaps also a sign of what’s to come for other countries in the region. Entrepreneurs can provide innovative services that cater widely to consumers and support a shift toward integrated care for health promotion and long-term management of chronic disease, also supplementing resources available in traditional public facilities.

Three experts visited the Walter H. Shorenstein Asia-Pacific Research Center and shared perspectives on those trends at the panel discussion, “Healthcare Entrepreneurs in East Asia: Innovations in Primary Care and Beyond,” hosted by the Asia Health Policy Program.

Historically, healthcare services in China have been almost entirely government-run. A patient would go to a public clinic, stand in a queue, and receive treatment within a few hours – being referred elsewhere if additional treatment was required.

Now, the private sector is growing, based on the promise of improved care and an enhanced experience, both removing the waiting line and ushering in new technologies. The government has also issued several policies encouraging “social capital” investment in health and fitness services.

The private sector for preventative care services now holds around fifteen percent of the entire marketplace in China, and “is expected to get much bigger over the next five years,” said Lee Ligang Zhang, the founding chairman and chief executive officer of iKang, a healthcare group based in Beijing.

Zhang oversees the company’s operation of 50 self-owned healthcare centers and an extended network of 300 affiliates. iKang is one of many groups catering to a growing consumer base of corporate workers and senior managers seeking care outside of the public system.

Comparative view

Increased development of premium healthcare facilities is not only emerging in China, but also in neighboring Taiwan. Since 1995, Taiwan implemented a national health insurance system, and has been lauded for its success in service provision.

Taiwan transitioned its healthcare market to universal coverage. Under this system, a patient can essentially “shop around” and select where to go for services, most of which are covered under the country’s insurance collective system at public or private providers.

“On average, every Taiwanese goes to see a doctor 14 times a year, compared to five times a year in the United States, and two times [a year] in China,” said Dr. Fred Hun-Jean Yang, a physician and chairman of MissionCare, Inc.

Such numbers reflect the higher availability of services compared to China, he said. Even as a small island, Taiwan has over 15,000 clinics and the price for services is generally affordable for the average citizen. Despite this availability of public and private services, Taiwan’s newer healthcare entrepreneurs seek to fill a market demand shaped by similar factors as in China. Yang says technology and the efficiency of the private sector healthcare system is attracting new consumers.

Missioncare is headquartered in northern Taiwan’s Taoyuan City and consists of four community hospitals with a larger network of clinics across the country as well as coordinated long-term care services for the elderly and those with chronic disease. The group has already expanded into China, and plans to integrate healthcare innovations, such as wearable monitoring and mobile payment.

Patient-centric service

Chinese citizens, particularly those with greater expendable income, are more willing to pay out-of-pocket for an improved patient experience, the panelists said.

“The consumer psyche is important,” said Dr. Wei Siang Yu, the founder of the Borderless Healthcare Group (BHG), a group of companies based in Singapore that focuses largely on health telecommunications.

One perspective is that consumers desire a “high-end” environment made possible by tailored design aesthetics and effective branding. Guided by this trend, Yu, a business executive and physician by training, started the “smart cities, smart homes” initiative at BHG.

BHG is now launching an incubator model in Shanghai, which combines intelligent design aesthetics with patient care, and is planning to localize such centers across China. The model is referred to as an “experience center,” rather than a hospital or clinic, and healthcare services – examinations, operations and value-added activities like wellness and education activities – are all centralized in one location.

Looking ahead, Yu said healthcare is likely to move even further away from the traditional hospital setting, and more toward experiential and home-based care models.

Japan is often cited for failing to capitalize on its innovative technologies and design aesthetics in global markets, but the advent of cloud computing provides new opportunities, says Kenji Kushida, the research associate for the Japan Program at the Walter H. Shorenstein Asia-Pacific Research Center (APARC), in a new coauthored op-ed.

In Nikkei Asian Review, Kushida writes with Martin Kenney, a professor of community and regional development at the University of California, Davis, that Japan’s market has a strong record of developing high-quality hardware and services, particularly in the consumer electronics and digital content industries, but a majority remains domestic.

Often referred to as the “Galapagos syndrome,” Japan is a technology leader but its output is largely confined to its own borders. The term compares the country’s industry to the Galapagos Islands, located off the coast of Ecuador, where geographic isolation has led to unique evolutionary development.

Kushida, who heads a new research project on Silicon Valley-Japan relationships, and Kenney note that many of the high-end core components in products from U.S. and Asian manufacturers are Japanese, despite loss of visibility on the final product.

The authors also say the rise of global cloud-computing services offers an immense opportunity for Japan, and a way to escape the Galapagos syndrome and enhance its global competitiveness.

The full op-ed can be found on Nikkei Asian Review online.

The Japan Studies Program co-hosted a delegation of government officials from six Japanese prefectures and business leaders from California in late July. The event was part of a two-day conference and initiative, led by the U.S.-Japan Council, to promote bilateral economic collaboration between the two countries.

A summary of the event can be found on the U.S.-Japan Council website.