Less clear is the big picture that will develop as economies transform further in Asia - moving from producer, to dynamic consumer market for exports, to an emerging source of business ideas.

These twists and turns in the Asia transformation surfaced at a recent UPS-sponsored global conference in Paris - the second in the company's series of Longitudes gatherings. Featuring world-class political, economic, academic and supply-chain thought leaders, Longitudes blends a variety of perspectives to map an emerging world of synchronized commerce.

Speaking on the impact of Asia on European commerce, Paris session leaders Dr. Arnoud De Meyer, professor of technology management at INSEAD, and William Fung, managing director of Li & Fung Ltd. of Hong Kong, challenged participants to think of Asia in a new light. "Of course, Asian nations have become great places to source goods and services," De Meyer said. "But think of them also as presenting Europe and the U.S. with market opportunities, and with ideas."

De Meyer believes we're really just at the beginnings of an interconnected global economy that's characterized by increasing cross-border trade and networking technologies like the Internet.

That economy's infancy has been greatly influenced by the outsourcing of manufacturing and services like information technology, and by an entirely new way of looking at supply chains.

Manufacturers and retailers now use sophisticated supply chain resources to extend their production-to-customer linkages around the world - an approach that drives top- and bottom-line growth.

Thus far, the shining star of the supply chain revolution has been the growth of manufacturing sourcing opportunities in Asia. In China alone, more than a billion dollars in foreign direct investments arrive each week. This has catapulted China to become the world's sixth-largest economy. It's expected to be the second most active trading nation by the end of the decade.

Although outsourcing of production to China has also siphoned manufacturing and services jobs from the West, the "China price" of imports has held down inflation and put money in American and European consumers' pockets.

And then, there's the impending market opportunity presented to Western nations. According to the Chinese Academy of Social Sciences, between 250 and 300 million Chinese people can now be classified as middle class. This number is expected to more than double by the year 2020.

Right now, China's domestic market is the world's fourth largest for consumer electronics. Each month, 5 million new subscribers in China sign up for mobile phone service. China's new housing construction is growing by 33 percent a year and its home improvement market is estimated at US$50 billion annually. Also, China is an expanding market for services. It's now the world's fastest-growing life insurance market.

For developed Western economies, the emergence of China and other Asian national economies has been a paradox - an immediate source of anxiety on the one hand, yet a growing export opportunity on the other.

Although the United States has an escalating trade deficit with China, its ratio of exports to imports is about even. Europe and Japan have become major exporters into China. While Western business leaders have embraced Asian nations as a source of manufacturing, and are beginning to realize the emergence of a rising middle class as a market for their goods, there is another development of equal significance.

Now business leaders are looking to Asia as a source for ideas, and one area where they're learning best practices is in the field of supply chain management. Forward-thinking Asian companies are taking advantage of process improvements to re-write the definition of supply chain efficiency.

One is William Fung's company - Li & Fung. Li & Fung has created a network of 5,000 suppliers in more than 40 countries to create the best worldwide supply chain for each specific order it receives from its retailing clients.

A typical order can involve production at six factories and in three different countries. Selection decisions are based on capacity, quotas, price, speed and quality. One of the products Li & Fung makes is a talking plush toy. The plush fabric is made in Korea, which has the technology to make the fabric. The whole toy is assembled in Shanghai, but the talking chip is customized in Taiwan.

For Li & Fung, each supply chain is constructed around the initial product idea, and involves the entire design process. "It's an approach that delivers value by satisfying consumer tastes," Fung said. "It also builds in contingencies against disruption. And it takes advantage of big-picture cost savings."

Li & Fung views the producer cost as only 25 percent of the picture. By taking a holistic view, the firm can attack the other 75 percent of the soft costs in getting a product from point A to B. Those costs include transportation, cost of in-store delivery, duties, shrinkage, insurance, overhead and even the cost of product markdowns and lost sales due to inventory errors. In short, Li & Fung is far-flung in its collaborative supply chain vision. Its multi-resource network drives top- and bottom-line value, and it mitigates risks of supply chain disruption through contingency resources.

This sort of supply chain innovation has laid the groundwork for what De Meyer sees as nations continuing to specialize in what they do best, and to use their expanding knowledge base to become sources of ideas about products.

China's expertise lies in manufacturing, electronics and assembling consumer goods, De Meyer said. And China now has five times as many researchers as France, he added. It only stands to reason that Asia will be a growing wellspring of ideas and intellectual capital. Progressive Western business leaders - particularly those facing more complexity, more demanding competition and expanding research and design costs - will embrace these new sources of ideas.

A good example recently reported by BusinessWeek is cell phone innovation. It's estimated that some 70 percent of cell phone development can result from a common design platform that might be refined and outsourced from original design manufacturers in Asia. A Western cell phone company can avoid the costs of platform development and focus on its core expertise -- customer knowledge. This allows it to add differentiating elements - the graphics, packaging and other creative elements.

Each "idea" supplier in the global network builds on its core expertise in a quick, efficient model - from the Asian hardware design experts, to the Western creative experts who best understand their customers' desires and tastes. It's a natural extension of the Li & Fung supply chain model that, reduced to its essence, puts the right resources in the right places at the right times.

De Meyer suggests that discerning Western companies, including manufacturers, will learn lessons from China and India on innovating for vast masses of people with low spending power. They'll learn from Japan in fashion, and from Korea in film production.

Great ideas will spring from R&D around the world. And great companies will leverage the globe's best brainpower. It's an evolution that suggests further specialization and further shifts in where work might be performed. Yet, it also suggests great opportunity to use new resources to put all the pieces together to create breakthrough products and experiences for customers.

"Great ideas will spring from research and development in Asia and from Asian customers," De Meyer said. "Those ideas may well have an impact on what we do in Europe and the U.S. And the first people who can sense those ideas, bring them back, and roll them out in the U.S. and Europe will be the ones who will be successful."