Innovation Premium
A survey by the Singapore Business Federation (SBF) found that more than 40 per cent of local small and medium sized enterprises (SMEs) plan to invest in IT, employee training or machinery and equipment this year, while only 6 per cent will invest in intellectual property.
These efforts, what experts would call “low-hanging fruits”. are confined to two areas of productivity out of six categories defined under the Government Productivity and Innovation Credit (PIC) scheme,
The game-changers are the four neglected PIC areas, namely, research and development; design projects; acquiring or licensing intellectual property rights; and registering original intellectual property.
Results from experiences in other countries, such as US indicated that innovation boosts a company’s earning, speeds growth, ensures an advantage over competitors, and appeals to shareholders. The authors of “The Innovation Premiums” book defined it as when businesses that deliver earning growth based on a continuous streams of new products and services and new ways of doing business, the innovation premium.
Next generation methods beckon companies to venture forth to a new territory when they can
- create and capture new value in new ways
- spark new products, services, processes, and businesses
- create new rules and opportunities for competitive advantage and breakthrough outcomes
Ronald and Tom highlight this approach as not a single breakthrough that creates value and growth. Rather, it is a high-performance engine powered by the five cylinders of strategy, process, resources, organization, and learning. It is sparked by an adventurous spirit and a farsighted vision that is not distracted by the proximity of the next milestone.
- Drive innovation across the entire enterprise to create value
- To leverage technology and competency to drive sustainable innovation and capture competitive advantage
One company that excels in this and doing very well in the market place is Canon inc., and may indeed be ” a lone world among Japanese companies”, as the media are wont to describe it.
The “platforms” they undertaken, are informal structures, lose coalitions of people roughly organized around particular areas of expertise. Canon’s innovation strategy combines a commitment to creating new platforms for growth and innovation with a willingness to find new partners to secure leadership in those platforms.
SMEs may not have the size and expertise to go it alone in innovating new products and services, in view that Singapore is small and costly market. To achieve that, companies need to look overseas or band together within an industry. Either solution may be difficult to implement without a hand from the Government. One example is to build partnership between large firms and SMEs in collaborating of new products. Two SMEs, Super Pak Manufacturing and Mega Plus Technology, helped HP indigo create new packaging for its ink canisters and in return gained new manufacturing knowledge and expansion into new product lines, a scheme under Spring’s intra-industry collaboration scheme, to help SMEs grow.
The government has recently headed down this route by expanding the use of the Innovation & Capability Voucher, which gives up to $40.000 in cash per company to upgrade its capabilities.
Rather than focus on short term targets, all should recognise that the productivity drive will be for the long haul, and design incentives accordingly. Creativity and innovation are not catch phrases but the way to go, to survive and proper in these economically intewined world of ours.
Reuben H C Ong (a.k.a Reubeno)
website http://www.reubenointernet.com/
email: reubeno@reubenointernet.com
