In this article, we talk about the 12 most advanced countries in Asia.

Asian Century

The 21st century is exceedingly regarded as the Asian century, primarily due to the overall slowing economic growth in the Western world relative to Asia. McKinsey estimates suggest that Asia could account for over 50% of world’s GDP by 2040, with Asian consumers driving 40% of the world’s consumption by that time. 

Higher consumer demand results from an expanding middle class, with the World Economic Forum estimating that 2 out 3 members from the global middle class will be Asian by 2030. 

On the corporate front, Asian companies are adding an average of $19 trillion to the global economy every year, with Alibaba Group Holding Limited (NYSE:BABA), Toyota Motor Corporation (NYSE:TM), Sea Limited (NYSE:SE) and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) being some of the biggest names. 

The level of Asia’s technological development is also one of the highest in the world, with China, South Korea and Japan collectively contributing 30% share in exports in global Knowledge and Technology Intensive (KTI) industries. China’s share is 17%, while Japan and South Korea make up 7% and 6%, respectively, as of 2018, according to the US National Science Foundation.

Investment Trends

According to FDI Intelligence, Singapore was the biggest recipient of Greenfield Foreign Direct Investment (FDI) as for the first two quarters of 2022 within the ASEAN bloc. Foreign companies announced 142 projects in the city state that amount to over $8 billion. It was followed by China, with inflowing FDI at $6 billion for the same period.

When it comes to the annual outlook, India has surpassed China, receiving $60 billion in Greenfield FDI so far for 2022, while its outgoing Greenfield investments made up $35 billion according to numbers from the UN. Overall, Asian Greenfield FDI grew by 6% for the year. 

Asian Economic Sectors

The continent is represented across many sectors but by far, it dominates the manufacturing industry and within manufacturing, Asia’s greatest edge is in the chip industry. 

Almost the entire technological ecosystem in the world relies on Asia for chip manufacturing. The region accounts for a whopping 75% of the global chip manufacturing industry, with Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and Samsung Electronics Co., Ltd. (KSE:005930.KS) collectively accounting for a staggering 69% of the global market share. 

Both are frontier companies in chip technology, with the current fabrication process at 5nm. Taiwan Semiconductor Manufacturing Company (NYSE:TSM) and Samsung Electronics Co., Ltd. (KSE:005930.KS) are both expected to move to 2nm chips in 2025, pushing the limits of Moore’s law. 

The recent chip shortage due to supply chain constraints has resulted in the US and EU taking steps to enhance the domestic chip production capacity. However, experts believe such moves would not be cost effective. According to Boston Consulting Group, manufacturing chips in the US would cost 30% more to the US economy than relying on Taiwan, and 60% more than relying on China.  

In this respect, Asia is well placed to keep dominating the manufacturing sector, especially the chip industry and even increase its market share due to the cost advantage and manufacturing infrastructure. 

With the background established, let’s move on to the 12 most advanced countries in Asia.

Our Methodology

For our list of the most advanced countries in Asia, we’ve ranked them based on the R&D share of the countries’ GDP and the level of human development. The data for R&D spending comes from the World Bank. 

For human development, we’ve sourced the data from the Human Development Index (HDI) of 2021-22. It measures human development from a scale of 0 to 1, with higher scores corresponding to higher levels of development. 

The HDI metric is the geometric mean for the normalized indices for each of three key variables. These are life expectancy, level of education and GDP per capita. 

Other than that, we’ve discussed major corporations in the countries.

12. Indonesia

Human Development Index Score: 0.718

R&D share in 2020 GDP: 0.28%

Indonesia is a country located in Southeast Asia. It had a human development score of 0.718, corresponding to a high standard of living for its citizens. Indonesia spent 0.28% of its GDP on Research and Development in 2020. 

Some of the major foreign companies working in Indonesia include Alphabet Inc. (NASDAQ:GOOG), Toyota Motor Corporation (NYSE:TM) and Exxon Mobil Corporation (NYSE:XOM)

Foreign Direct Investment in the country grew by 64% in Q3, 2022 on YoY basis, primarily boosted by resource processing capabilities of the country, as announced by their Investment Minister Bahlil Lahadalia.

11. Georgia

Human Development Index Score: 0.802

R&D share in 2020 GDP: 0.30%

Georgia is located at the intersection of Europe and Asia. In 2020, the country spent 0.30% of its GDP on Research & Development and had a very high score of 0.802 in human development for the studied period of 2021-22. 

According to the National Statistics Office of Georgia, the country received $1.67 billion in FDI in 2022, with a YoY increase of 26%.

10. Thailand

Human Development Index Score: 0.800

R&D share in 2020 GDP: 1.14%

Thailand is located in Southeast Asia. The country has a booming services sector, comprising 58.3% of the country’s GDP in 2020, per the Bank of Ayudhya. Thailand’s industrial manufacturing output in 2021 was up 7.31% from the previous year, generating a total revenue of $137 billion.

Its human development score in the studied period of 2021-22 was very high at 0.800 and the country invested significantly in R&D in 2020, with the spending comprising 1.14% of its GDP.

9. Malaysia

Human Development Index Score: 0.803

R&D share in 2018 GDP: 1.04%

Malaysia is one of the most advanced countries in Asia, with a very high human development score of 0.803. Per the latest figures from the world bank, the country spent 1.04% of its GDP on Research and Development in 2018. 

Major foreign technology corporations have a presence in the country. These include Alphabet Inc. (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT).

8. Turkey

Human Development Index Score: 0.838

R&D share in 2020 GDP: 1.09%

Turkey, like Georgia, is located at the intersection of Europe and Asia, with 97% of its territory in the latter. As of 2022, it has a very high human development score of 0.838. The country spent 1.09% of its GDP on Research and Development in 2020. 

The information technology sector in the country is at an inflection point with startups like Getir, which provides a digital groceries-delivery app. It was founded in 2015, and is valued at close to $12 billion in 2022. 

Another notable ecommerce technology company from Turkey is D-Market Elektronik Hizmetler ve Ticaret A.S. (NASDAQ:HEPS), or simply known as Hepsiburada. On the other hand, major foreign corporations operating in the country include Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL).

Turkey has also made strides in drone technology, with its drones supplied to Ukraine proving highly effective against Russia.

7. Russia

Human Development Index Score: 0.822

R&D share in 2018 GDP: 1.10%

Many people think of Russia as being part of Europe but the country is too big that it is part of both Europe and Asia, making it a transcontinental nation. In terms of land, though, about 75% of Russia is located in Asia. 

Russia has a very high human development score of 0.822. As per the latest data on the country from the World Bank, Russia spent 1.10% of its  2018 GDP on Research and Development.

The country particularly stands out in military technology. It already matches the US strategically (not necessarily tactically) in stealth technology capabilities and has a lead over the US in strategically important hypersonic military technology.

On the IT front, Russia is home to some prominent companies like Yandex, Avito, VK and Wildberries. It was also host to some of the biggest US corporations like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL) and Alphabet Inc. (NASDAQ:GOOG), all of which have left the country since its invasion of Ukraine.

6. China

Human Development Index Score: 0.768

R&D share in 2020 GDP: 2.40%

China is the second largest economy in the world as of 2022 and is set to surpass the US and become the biggest global economy in the world in the next few decades as projected by various economic firms. 

Its human development score is a high 0.768. The country spends a significant portion of its GDP on R&D. In 2020, its Research-and-Development spending was 2.40% of its Gross Domestic Product. China has a huge share of global contribution in Knowledge-and-Technology-Intensive-Industries as well, as noted earlier. Its KTI output in exports was 17% of its GDP in 2018. 

China, like Russia, is also ahead of the US when it comes to hypersonic military technology. In terms of IT, Chinese corporations like Alibaba Group Holding Limited (NYSE:BABA) are some of the direct competitors of US-origin companies like Amazon.com, Inc. (NASDAQ:AMZN). 

5. Taiwan

Human Development Index Score: 0.916

R&D share in 2020 GDP: 3.63%

Taiwan is located in East Asia and is one of the most advanced countries in Asia. The share of R&D in Taiwan in 2020 was a considerable 3.63% of its GDP. Its human development score was also very high at 0.916 in 2022. 

Taiwan dominates the world’s chip industry with its TSMC company, which has a global market share of 53% as of 2022, easily surpassing any other chip manufacturing company on the planet. Other major technology companies in Taiwan include ASE Group and United Microelectronics Corporation.

4. Hong Kong

Human Development Index Score: 0.952

R&D share in 2020 GDP: 0.99%

Hong Kong’s human development score is very high at 0.952 according to HDI Index for 2021-22. Hong Kong spent 0.99% of its GDP in 2020 on Research and Development. As such, it has a thriving startup ecosystem that grew by 12% in 2021 to 3,755 companies. 

Notable of these companies include Insilico, a machine-learning-based drug discoverer and biomarker developer, and Ascentage Pharma, which develops small-molecule drugs for Cancer treatment. 3. Singapore

Human Development Index Score: 0.939

R&D share in 2019 GDP: 1.89%

Singapore is a city state in Southeast Asia. It is a highly developed country, with a human development score of 0.939. The country spent 1.89% of its 2019 GDP on Research and Development. The Science & Technology scene in Singapore is thriving, with over 2000 patent applications filed by the country’s residents in 2021. 

It is also one of the few countries in the world that have practically implemented novel technologies like robotics at a sizable scale. Reuters reported that Singapore has 605 robots in the workforce for every 10,000 humans. 

As of 2022, Singapore is home to nearly 10,000 startups, with Trax being one of the most notable, which provides computer vision software to retailers.

2. South Korea

Human Development Index Score: 0.925

R&D share in 2020 GDP: 4.81%

South Korea is one of the most advanced countries in East Asia. The country spent 4.81% of its GDP on Research and Development, which is significant as the country’s global contribution in R&D stood at nearly 7% in 2019, considerably higher than most countries. 

In the Global KTI output of 2019, South Korea’s contributions to computers and electronics development stood at 9%, making it one of the most innovative countries in Asia as well as the world. 

Some of its most notable technology-manufacturing companies are Samsung and LG (acronym for Life’s Good). The startup ecosystem in South Korea is also one of the most sophisticated in the world. According to Tracxn, a leading startup tracker, South Korea is home to nearly 7,000 startups as of 2022.

1. Japan

Human Development Index Score: 0.925

R&D share in 2020 GDP: 3.26%

Japan is the most advanced country in Asia, owing to very high human development, a 2021 GDP size of $5.1 trillion and high R&D and global KTI share. 

Its global output in Knowledge-and-Technology-Intensive industries was the third highest in the world in 2019 behind China and the US, at 8%.

Japan is a leading maker of robots in the world, accounting for the production of 45% of all the industrial robots in the world according to the International Federation of Robotics.

Its biggest robot-manufacturing companies include Toshiba, Toyota, Honda, Denso Corporation, FANUC and Epson among many others. Japan, as of 2022, is home to close to 6,000 startups according to Tracxn. Its most notable high-tech startups include JOLED, iSpace, Synspective and Astroscale.

You can also take a peek at 16 Biggest Hardware Companies in the World and 15 Most Advanced Countries in Education.

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Disclosure: none. 12 Most Advanced Countries in Asia is originally published on Insider Monkey.