Part 1 – Intro
An examination of the world’s most influential ideas from antiquity to modern times
can provide us with a framework in which to understand ourselves, the world around
us, and how economies and business may advance. Ideas are the fundamental building
blocks of civilisation, sometimes empowering nations, and at other times stunting
their development. Ideas shape the way we do business and can be the catalyst for
dramatic transformations in companies. The most powerful ideas have a permanent
impact on society, altering the way we live and view the world around us.
This article will show how different continents have at different times in world history
been responsible for advancing humanity’s store of ideas, discuss what is needed to
foster ideas and innovation, and explore why it is important for countries and
businesses to do so continually. Finally, the article will look at the evidence
supporting the view that Asia might be on the verge of taking leadership in
technological innovation and scientific advancement once again – after a hiatus of
five centuries.
Part 2 – A brief history of ideas
Despite its obvious importance, the history of ideas is a subject rarely given an airing
– possibly because it requires committed scholarship in a diverse range of subjects.
One historian who took on the daunting task of compiling a history of human
intellectual development was Peter Watson, who revealed in his book Ideas how
different regions of the world have taken turns to contribute to humanity’s intellectual
development from before the dawn of civilisation to modern times.1
Cave art and carvings found by palaeontologists indicate that a global creative
explosion took place between 60,000-40,000 BC, marking the first step in mankind’s
intellectual development. By 14,000 BC, people in Asia and the Middle East started
domesticating plants and animals, and some three thousand years ago began also to
use clay. By 5,500 BC, writing was born in India according to some scholars,
although others believe Mesopotamia – the region occupied by modern Iraq, eastern
Syria, southeastern Turkey, and southwest Iran – was its birthplace. Mesopotamia is
also credited as the home of the first work of literary fiction, the library, legal code,
the alphabet, astronomy and the wheel.
By 585 BC, Europe was embarking on its own course of scientific and philosophical
discovery in Greece, where solar eclipses and other astronomical observations were
being recorded, and a new system of government was appearing. In the second
century BC, paper was invented in China, while the concepts of resurrection, a
messiah and Judaism were taking root in Israel. By 170 AD, the four Christian
Gospels emerged. Four centuries later Muhammad was born.
Around 500 AD, India became the fountain of world influencing ideas. A Hindu
mathematician of that era was credited with calculating pi at 3.1416, discovering the
length of the solar year to be 365.358 days and observing the earth to be round, some
1,000 years before Copernicus made the same discoveries. Around 750 AD, China’s
knowledge of papermaking finally reached the West.

One of the most fascinating periods in the history of human intellectual development
was then about to unfold. During the Middle Ages, China led the world in its
technological achievements and intellectual sophistication by such a wide margin, it
would in some cases take several centuries for the rest of the world to catch up with
some of its ideas. This includes many of the inventions that drove the nation’s
extraordinary seafaring exploits. China, for example, had been using rudders on ships
since 400 AD but it was not until almost 800 years later that Western shipbuilders
would do the same. China had discovered the magnetic compass as early as 80 AD,
yet it was not until around 1300 AD that Europeans would make the same discovery.
Part 3 – In what environment can ideas thrive?
One of the questions that have fascinated historians throughout modern times is how
China, with its vastly superior scientific knowledge and intellectual sophistication
during the Middle Ages, could have been overtaken by Europe. Watson regards this
as the most important puzzle historians can solve, given that the dramatic acceleration
of intellectual development in Europe that occurred between 1000 AD and 1500 AD
gave shape to the Western World’s present economic hegemony and technological
leadership.2
As the Middle and Far East fell behind, the West would from 1750 to 1950s become
the wellspring of world changing ideas and achievements, including the introduction
of the factory and mass production, the invention of the steam engine, the harnessing
of electricity, the birth of modern chemistry, the concept of research, and the growth
of new areas of academic endeavour, including sociology, geology, statistics and
particle physics. The two most profound scientific ideas of the 20th century – the
uncovering of the gene, which transformed our understanding of our bodies and the
mechanism controlling the creation of life, and the discovery of the quantum, which
brought about a new way of looking at matter and the universe – also came from
Western scientists.
According to Watson, there are several academic theories explaining the rise of the
Western intellectual and economic hegemony. These theories provide us with
important clues as to how society can be aligned to maximise its potential for
generating ideas.
Among some of the more compelling theories, historian Janet Abu-Lughod suggests
the rise of the West was facilitated largely by diseases, which swept through the world
in the 13th and 14th centuries. These plague epidemics decimated populations in the
major trading entrepots of the Middle East and China, but left Europeans relatively
unharmed. With trade in the East severely disrupted, Europe stole a march, helped by
wealth garnered from new trade routes that European ships had established across the
Atlantic.
Another theory advanced by Cambridge-based historian Joseph Needham is that when
the Chinese invention of gunpowder reached Europe, it was the catalyst for political
change that would benefit scientific endeavours. Needham believes guns brought
about the downfall of feudalism in Europe, allowing the forward-looking mercantile
class, which was closely associated with scientific advancement, to flourish. China,
by contrast, remained under a feudalistic system of rule, upheld by the mandarinate,

which had proven effective in keeping the country stable but stifled its potential for
generating new ideas.
Other historians believe differences between the scholastic systems of the East and
West played a major role. The theory is that mediaeval Chinese and Middle East
scholarships discouraged independent thought, because the competence of a scholar
was judged by his master. Europe, on the other hand, had adopted a scholastic system
from ancient Greek tradition, which emphasised the sharing of knowledge and
organised scepticism, thereby stimulating the development of new ideas.
The theory, which has received the most attention however, relates to the unification
of European continent by the Christian church. Historians championing this theory
believe the rise of a trans-national class of scholars across Europe’s early universities
was the source of the continent’s sudden intellectual acceleration. These scholars,
spoke the same language (Latin), were trained in the same classical texts, and shared
the same approach and values bound by Christianity, which gave them a common
framework for collaboration and knowledge sharing.
Part 4 – In what environment can ideas be translated into progress?
While history can teach us much about the complex mixture of economic,
governmental, cultural or sociological factors that can give rise to a society capable of
producing world influencing ideas, we need to turn to the present day to understand
what are the optimal conditions for translating those ideas into progress. INSEAD
Business School recently attempted to define what a nation needs to meet today’s
challenge of innovation in its Global Innovation Index, a study which attempts to
assess and rank countries for their ability to generate and profit from innovation.3
What the index reveals is that to generate progress through ideas, a country needs to
be fully committed on many levels. A nation must have a robust and transparent legal
and regulatory framework, excellent business schools and science institutes, a sound
banking system, and supportive government policies. It must educate an adequate
number of science and engineering graduates, build efficient transport infrastructure,
and develop advanced communications networks. As the private sector is an
important driver of innovation, a nation must also ensure businesses have access to
financing and abide by high corporate governance standards. Lastly, the INSEAD
study noted a nation must be technologically sophisticated, as indicated by factors
such as internet usage.
Part 5 – Where the present and past deviate – acceleration in intellectual
development.
Where the dynamics of producing ideas and innovation has changed, especially in the
past twenty years, is in the way we communicate. The pervasiveness of cheap and
reliable technologies for communication and information dissemination – such as
email, websites, search engines, blogs and instant messaging – has created a global
platform for knowledge sharing, which functions 24/7.
Since the beginning of this century alone, the number of people using the internet has
grown 203%. In China, the number of internet users has expanded at an annual rate of

20% in the past three years to 137 million. The number of mobile phone subscribers
around the world has also experienced rapid growth, rising at a rate of 25% per year
in the last few years to around 2.6 billion people currently, representing a penetration
rate approaching 40%. In China, there are currently an estimated 443 million mobile
phone subscribers.
As more people get connected and their use of communications technology becomes
more sophisticated, exchanging information has become near instantaneous and
unrestricted by geographical boundaries. New models of how people can collaborate
on research and work have subsequently sprung up, such as the open source research
model, leading to exponential growth in the flow of potentially world changing ideas
and innovation.
According to technology commentator Ray Kurzweil, the world achieved more
technological advancements in the first 20 years of the 20th century than the whole of
the 19th century. Kurzweil argues that through an analysis of the history of
technology one can observe that the rate of technological change is not linear but
exponential. Kurzweil points to the exponential growth in the power of computer
hardware technology as evidence of this trend.4
Part 6 – Ideas equals opportunities
The importance of ideas and innovation is well acknowledged by governments these
days. Ideas and their effective application – namely innovation – are considered by
leading business thinkers as the biggest driver of productivity gains. One US research
study claims innovation accounts for as much as 80% of increases in productivity in
the US. It has been argued by some scholars that productivity gains, in turn, provide
the main thrust of growth for a modern economy.5 Indeed, according to the Nobel
Prize winning economist Robert Solow, anything that allows an economy to add to its
output without requiring more labour and capital will produce sustained economic
progress.
In the US, the Department of Commerce states leadership in science and technology
as one of the keys to maintaining US global competitiveness. The European Council
of Ministers last year approved the Competitiveness and Innovation Framework
Programme, a €3.2 billion scheme to promote innovation and boost the
competitiveness of European businesses. The European Union is targeting, albeit
unsuccessfully, to raise its research and development spending to 3% of GDP.
Meanwhile, China is looking to raise its research funding to 2.5% of GDP by 2020.
China is not the only developing country to recognise the key role that productive
research and technology capabilities can play in developing a modern economy.
Brazil last year released US$200 million in funds for scientific research and passed
laws to encourage innovation. In Eastern Europe, Estonia laid the foundations to build
a knowledge-based economy through one of the continent’s most advanced
telecommunications networks, low internet connectivity costs and high rates of
computer literacy, and has started to reap the rewards through an explosion in
enterprise software innovations.6

Part 7 – Driving innovation in business
More than most, business leaders understand the power of ideas and innovation to
drive growth or affect much needed business change amid the globalisation of
markets. The 21st century enterprise faces competition from both domestic and
foreign rivals, and must be prepared to innovate in order to differentiate itself in a
globally integrated marketplace. It must also be prepared to quickly adapt to change
or to reinvent itself, as the exponential growth in ideas may lead to the introduction of
new business models that render its established businesses obsolete.
We also think it is important to understand the dynamics of working with ideas. Greg
Stevens and James Burley’s research on product development is enlightening on this
issue, showing that out of 3,000 raw ideas, only 300 would actually be submitted as a
proposal, only 9 would make it to the development phase and just 1.7 would make it
to a launch. Ultimately, only one out of 3,000 raw ideas would actually become a
commercial success.7 The authors said that understanding these odds, managing the
expectations of those involved, and calculating the future benefits from spending on
innovation held the key to success.
But as the history of business shows, for every one good idea, there are numerous
failed ones. Possibly the most infamous was Coca-Cola’s decision in 1985 to change
the formula of its prized beverage. The subsequent outrage expressed by Coke
drinkers forced the company to reinstate the old formula almost as fast as it had
dropped it. The lesson for all of us may be that the road to innovation is fraught with
risk, although businesses and nations must still walk it in order to survive and stay
competitive.
An Example
To encourage innovation at ING Insurance Asia/Pacific (ING), we emphasise the need to
think independently, experiment with new concepts and share ideas and thoughts. To put
some of these principles into practice ING established an “idea factory”. The unit provides
a platform for people to identify and work together creatively on new ideas either
generated by themselves or colleagues to keep the company on a path of continuous
improvement and excellence. One of the successes of the idea factory was to develop a
corporate blogging site through which ING can now engage with stakeholders, including
clients, distributors and employees. It is becoming another major source of ideas to keep
improving our business.
Part 8 – Is China’s star on the ascendancy
As we progress in the 21st century, it is interesting to see the possible beginning of an
epoch in which Asia – and China in particular – can compete with or even outdo the
West in scientific advancements and technological innovation. President Hu Jintao
has predicted that “by the end of 2020…China will achieve more scientific and
technological breakthroughs of great world influence, qualifying it to join the ranks of
the world’s most innovative countries’.

Far from empty rhetoric, the president’s words are backed by an astonishing level of
investment into research and development programs around the Mainland. Since
1999, China’s spending on research and development (R&D) has been increasing at
rate of more than 20% per year and is targeted to reach 2.5% GDP by 2020. China has
already overtaken Japan as the second largest R&D investor, behind only the US,
according to a recent science and technology study released by the Organisation for
Economic Co-operation and Development.8 China’s research drive is, according to
United Kingdom-based think-tank Demos, “the most ambitious programme of
research investment since John F. Kennedy embarked on the moon race”.9
Another important source of funding for China’s scientists and engineers is foreign
direct investment. With private enterprise taking their R&D needs down the same
route as their manufacturing requirements - out into the global market - China and
other Asian countries such as India and Korea, are benefiting from an increasing share
of the international flow of enterprise research dollars at the expense of the traditional
hubs of research – Europe, Japan and the US. Foreign direct investment in China in
2006 topped US$63 billion, up 5% over 2005.
This inflow of capital into China is driven by improving infrastructure and
regulations, farsighted policies, such as attractive tax breaks for foreign investors, and
a growing pool of talent. According to the OECD technology study, the number of
researchers in China surged 77% between 1995 and 2004 to a total of 926,000, again
second only to the US with 1.3 million researchers.
In a recent report compiled by 15 US enterprise and industry associations, prominent
US business leaders warned their country’s policy makers that with Asian education
systems creating science and engineering graduates far faster than the US – four times
as fast in the case of China – US competitive advantages in technology and
innovation could quickly slip.10 While the US does attract a significant number of
talented researchers from abroad, a Harvard Business School report noted that
policies are in place in China to attract back these people and draw on the knowledge,
practices and mindset they have absorbed from working abroad.11
As with many Western countries, China is also negotiating scientific cooperation and
exchange agreements with other countries, including the US, countries of the
European Union, and many Asian states, in which knowledge would be shared.
Part 9 - Summary
Throughout history, new ideas have been closely linked to social and economic
progress. As developing and developed countries alike recognise today, it is not only
important to generate such ideas, but also to create an environment through policies,
education, international cooperation and investment in which those ideas can blossom
into successful innovation and ongoing improvements in everything we do.
In an age when all the world’s useable land has been carved up, natural resources
have been divided, and goods and services have become commoditised, ideas and
innovation are the new currency, which both governments and private sector
enterprises must learn to nurture.

1
Peter Watson, Ideas (London: Phoenix, 2006)
2
Ibid. 433-455
3
Soumitra Dutta, INSEAD and Simon Caulkin, “The world’s top innovators”, World
Business Review (January-February 2007)
4
Ray Kurzweil, “The law of accelerating returns”, KurzweilAI.net (March 2001)
5
William Brody, “Compete – or else”, Innovation (November-December 2005)
6
Soumitra Dutta, INSEAD and Simon Caulkin, op. cit.
7
Greg Stevens and James Burley, “3,000 Raw Ideas = 1 Commercial Success!”,
Research Technology Management (May-June 1997)
8
Organisation for Economic Co-operation and Development, OECD Science,
Technology and Industry Outlook 2006 (London: OECD Publishing, 2006)
9
Charles Leadbeater and James Wilsdon, China: The next science superpower?
(London: Demos, 2007)
10
AeA, Business Roundtable, Business-Higher Education Forum, Computer Systems
Policy Project, Council on Competitiveness, Information Technology Association of
America, Information Technology Industry Council, Minority Business Roundtable,
National Association of Manufacturers, National Defense Industrial Association,
Semiconductor
Industry Association, Software & Information Industry Association, TechNet,
Telecommunications Industry Association, and the U.S. Chamber of Commerce,
Tapping America’s Potential: The Education for Innovation Initiative
11
Sean Silverthorne, “Report from China: The new entrepreneurs”, Harvard Business
School Working Knowledge (October 2006)