Pacific tech is different than Silicon Valley tech. It is more hardware-oriented, makes more, uses more engineering, and is financed and managed on different principles that in many ways are more sound.

So in adding Pacific tech to your portfolio of Silicon Valley stocks, you’re diversifying not just regionally but in a host of other ways, too. Both types of tech are central to the emerging 21st-century economy, but Pacific tech is far less likely to get lost on the way there.

Much of the difference between Pacific and Silicon Valley tech comes down to culture. The United States prizes entrepreneurship, and has financial, educational and other structures in place to encourage it. East Asian cultures are much more team-oriented—especially Japan, but even Korea and China place a much lower value on individual achievement than does the culture of the United States.

Even the best engineers tend to stay at Pacific tech companies for long periods. Often they stay in one place for their entire careers, and they focus on the quality and innovativeness of the projects they are working on, rather than the chance to join a start-up. As a result, companies accumulate and value experienced and knowledgeable engineers, keeping most of their human “intellectual property” in-house, rather than losing it to competitors.

So companies are forced to work on more innovative and cutting-edge things if they don’t want to lose their best engineers.

They also use open sourcing more and contribute more to it, since it often provides a cost advantage, which tends to allow standardization among manufacturers rather than dependence on shaky proprietary systems.

As a result of the different career structure, engineers have more stable jobs and will work more steadily rather than in bursts. Quality is important, both for cultural reasons and because the engineers will have a long-term association with a single company.

Pacific tech companies are often conglomerates, drawing on expertise in one sector of the business to advance others, and tend to manufacture in-house—the display market, for example, is open only to those with massive display plants, almost all in Asia. Customer needs will be given a high priority, even ahead of far-reaching vision. In Pacific countries with lower wages, it will be cost-effective to train much larger teams of engineers than in Silicon Valley, at a fraction of the cost.

The financial system is also different. There is much less venture capital, and certainly much less indigenous venture capital. Companies rely much more on banks for financing, leading them to value stability and long-term commitment in their business activities and employees. In contrast to Silicon Valley, bad ideas don’t get funded, so the best engineers tend to be employed by well-established companies with sound businesses rather than being trapped in failing start-ups.

As a result of these differences, Pacific tech has a different industry structure and capabilities than Silicon Valley. Silicon Valley has poured in huge resources to software, which is a business in which barriers to entry are difficult to build and keep.

Conversely, hardware is highly developed and manufacturing tends to take place in Asia, even when ownership and branding are U.S.-based. For an example of this, see our story on Hon Hai Precision Industries, on page 4. Also, see the accompanying table on flash-storage technology.

Including a new entrant, our Pacific Wealth Portfolio has five Pacific tech companies, each having large endowments of specialized intellectual property and benefiting from massive barriers to entry. Indeed, they can expect to be substantial beneficiaries from the Trans-Pacific Partnership treaty, which increases the protections for intellectual property.

Yaskawa Electric (OTC: YASKY), in our Conservative Portfolio, is a leading Japanese manufacturer of industrial robots and motion-control systems. It is a typical Pacific tech company in that it is focused on manufacturing things and is highly stable, having been founded in 1915, with a long-standing core of specialized engineers and massive intellectual property represented by patents worldwide.

LG Display (NYSE: LPL), in our Aggressive Portfolio, is a Korean company affiliated with the LG conglomerate and the dominant manufacturer of display screens, with over a 20% market share worldwide. It’s also a leader in the cutting-edge technology of organic LED screens and manufacturer of the screen for the Apple Watch. Again, it is a massive holder of intellectual property, with 26,518 patents at the end of 2014, manufacturing in Korea and China.

Nintendo (OTC: NTDOY), a Japanese company in our Aggressive Portfolio, is one of the three leading video-game-console manufacturers, along with Microsoft and Sony. It pioneered the Wii motion-sensitive game-control system, giving it an advantage with the casual and sports gamer over the Sony PlayStation and the Microsoft X-Box. Like Yaskawa and LG Display, it owns a large number of patents, most recently one for a hands-off system that monitors sleep quality.

Trend Micro (OTC: TMICY), a Japanese company in our Aggressive Portfolio, is a leader in Internet security, thus focusing on software rather than hardware, as do most other Pacific tech companies. However, it combines their characteristic of massive intellectual property ownership and stability in corporate structure.

And our new entrant, Hon Hai Precision Industries (OTC: HNHPF), a Taiwanese company in our Conservative Portfolio, is a specialist manufacturer and assembler of consumer electronic hardware, with intellectual property and patents in areas such as product design; it files more patents in Taiwan than any other corporate entity.