What struck Microsoft executive Marshall Phelps at a recent series of conferences in developing nations was that government, business and academic leaders often asked him: "How can we invent the next Google?"

It's not that he took it as a slight that they said ‘Google’ and not ‘MSN’. What struck him was the view that a single big idea could transform a country overnight. "Not everything has to be the next big breakthrough," said Phelps, Microsoft’s corporate vice president for intellectual property, during an interview last week.

The key to building a prosperous economy is to create an environment that supports innovation, he said. Innovation can take place at a piecemeal pace and does not have to happen in one fell swoop - and usually, it doesn't.

Phelps had just finished a series of conferences on innovation co-sponsored by Microsoft in Indonesia, Malaysia and Thailand. The idea was to bring together national leaders and help them figure out how to encourage innovations that play to the strengths of their countries, and how to create an environment to ensure that innovation continues.

For example, Phelps said, in Indonesia many people are artistic, and the country has started to focus this talent on visual multimedia software. A drawback for the country is that around 65 percent of college graduates go abroad to find jobs.

In Thailand, government agencies tend to be aggressive and forward thinking, and that can help strengthen a number of industries. Medical tourism is booming there, and Thailand is growing into an automobile titan in Asia. Innovation can occur in any of these industries - especially with software, Phelps said.

The idea of drawing on local strengths can be applied to the US too, said Bob Hayward, a managing consultant in Thailand with Strat-etech Consulting. The US software industry is a by-product of a business environment that relies heavily on new technology for efficiency. "You must work with what's in your environment," Hayward said.

Malaysia is the most advanced of the three countries Phelps visited. It has high-tech parks and attracts investments from global technology companies, which in turn support innovation locally by providing training and engineering jobs that increase the skills of the work force. Malaysia also has strengths in building data centres, and in ‘Islamic finance’, a type of financing that does not charge interest for religious reasons.

South Korea is one country in the region that has developed so far in recent decades that it is now a technology leader in some areas. It's years ahead of other countries in certain types of internet applications because of its early focus on broadband. Its online gamers are famous, and a host of multiplayer games developed there, such as ‘Guild Wars’ and ‘The Legend of Mir 2’, have won acclaim outside Korea.