How would you like to live in Hyderabad?

Rob Bryant, a fine chemicals consultant based in the UK, had a provocative essay called Can Asia innovate? published in Scrip in January.

Given the far lower margins to which most Asian companies operate (bar those in Japan) compared to their European counterparts, improving the efficiency of processes would seem to be a good idea. Yet the majority of Asian pharmaceutical manufacturing processes remain inefficient, often polluting and generally second-rate.

Bryant suggests that Europe benefits from an innovation-friendly culture that is absent in Asia.

It is certainly intriguing that Asian social traditions tend to avoid intellectual confrontation and that people are educated to respect the status quo to a degree that Europeans could not tolerate.... Perhaps a talent for asking difficult, and even annoying, questions is one of Europe's competitive advantages in the pharmaceutical industry.

If that's so, it hasn't stopped pharma fine chemicals manufacturing from migrating to Asia. Companies in India and China can easily undercut Western companies on cost. However, Bryant notes, competition among Asian companies has cut even their margins to the bone. He says the only room for reducing costs is improved processes, and he suggests that Asian companies will have to turn to Western technologists for that.

Europeans must be quick-witted enough to take advantage of this opportunity to continue to participate in API manufacture in this way. By inventing better processes to replace the older ones employed in Asia, they can participate actively in these countries' success and, where scale of manufacture allows, even compete successfully from a Western production base.

If not Hyderabad, how about Shenzhen?