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Saturday August 14, 2010

Creativity - the key to NEM’s success

THE New Economic Model (NEM) was unveiled in March and the 10th Malaysia Plan (2011-15) in June. These aim to transform Malaysian life and fortunes. At the heart is innovation.

The Prime Minister takes every opportunity to drive this home – to succeed, innovation must be pushed harder and harder until it becomes an integral part of the nation’s culture.

As a concept, innovation simply means the nurturing of talent for creativity. Here, creativity can be likened to producing something original and useful.

Viewed differently, to be creative means to deal with the classic creativity challenge of getting divergent thinking (producing unique ideas) and convergent thinking (putting ideas together to improve life) to work in tandem.

According to Prof Paul Torrance (who created the gold standard in creativity assessment), a creative person has an “unusual visual perspective”, matched with an “ability to synthesise diverse elements into meaningful products.”

It’s essentially about getting the left and right brains to operate as one. A recent IBM CEOs poll identified creativity as the No. 1 “leadership competency” of the future. Unfortunately, we don’t have such a culture.

A culture thing

Since Tun Mahathir Mohamad’s Look East policy, we have yet to succeed in emulating Japan’s innovation culture. Three main elements of this culture remain alien to us: its mentor system of management; acceptance of starting at the bottom to understand a firm’s workings at every level; and the Japanese function in unison as a workforce and the future of the firm. Whatever we have since achieved is still very much work in progress.

As a matter of public policy, we did try to create a Malaysian way of developing our own brand of creativity culture by: making Malaysia an attractive place to live, with security, good infrastructure and communications, within a unique and relaxed way of life that is multi-racial, multi-religious and multi-cultural, which foreigners can easily adapt to; and trying to position the nation as a base for foreign direct investments (FDIs) to come, expand and prosper, with widespread use of English.

We tried these to make up for what is special to the Japanese, but there was only limited success. We just don’t have the culture, and we can’t (and won’t) change readily enough to develop such a culture.

Earlier this year, in a column titled “On productivity and talent management”, I wrote: “Human capital lies at the core of innovation. Raising productivity requires a labour force of high calibre – committed, motivated and skilled enough to drive transformational change based on excellence over the long term. It’s about trapping potential through acquisition of new skill sets in designing new products and services, and devising new processes and systems to do things smarter and more efficiently. This requires ready access to a talent pool of critical skills and expertise.”

Frankly, we don’t as yet have such a pool. Therefore, we need to go back to basics. This means transforming our education system to emphasise meritocracy and lay the foundation for creative thinking and analysis from day one.

For a start, teaching curriculum, pedagogy and management of education have to be reformed. US President Barack Obama is right: “If we want success for our country, we can’t accept failure in our schools.” Fortunately, as evident from a recent supplement in The Economist magazine, creativity can be taught.

It starts with recognising the new view that creativity is part of normal brain function. The trick is to get the classic divergent-convergent creativity challenge working as a matter of habit.

First, we need to discard the emphasis on IQ in favour of CQ (creativity quotient). It is already proven that Torrance’s creativity index is a good predictor of kids’ creative accomplishments as adults.

According to Prof J. Plunker of Indiana University, the correlation to lifetime creative accomplishment was more than three times stronger for childhood CQ than childhood IQ. However, unlike IQ scores (which rise 10 points every generation because presumably, enriched environments produce smarter kids), CQ scores in the US and many other rich nations have fallen, of late.

This no doubt reflects that kids now spend more and more time in front of TVs and playing video games, rather than engaging in creative activities. Also, there’s the growing lack of creativity development in schools and at home.

The same decline is happening in Malaysia. Reform must adopt a problem-based learning approach – where education is revamped to emphasise ideas generation, curricula is driven by real-world enquiry, and pedagogy acquaints teachers with neuroscience of creativity.

Critics argue our kids already have too much to learn. This is a false trade-off. Creativity thrives on fact-finding and deep research.

High global curriculum standards can still be met – but it needs to be taught differently. Creativity is prized in Malaysia, but, we don’t seem to be committed politically to unlock it.

Continuing denial

We have not produced (and are unlikely to produce) talent in sufficient numbers to take us to the next level of becoming a high-income nation. For sure, what got us to where we are today will not get us to where we want to go. To begin with, we have to broaden the human capital base. For this, we need to transform our education system to secure at least a quality supply flow in the next generation.

Over the medium term, we will have to make do with a real commitment and practical flexibility to turn our 18- to 30-somethings, on the margin at least, into a productive workforce, given past damage – and retain them. By necessity, this will be sub-optimal. Better late than never.

In the end, it’s not just about sustaining economic growth. We are surrounded with matters of national and international importance crying for creative solutions – from striving for excellence to raising productivity to delivering quality healthcare.

Such solutions emerge from an open marketplace of ideas. These can be sustained by a workforce constantly contributing original ideas and being receptive to ideas of others. What is required is real leadership to effectively harness the vast energies engendered.

The Prime Minister is right in highlighting government as a key component of the creative ecosystem, in what he calls “bringing innovation into government and government into innovation.”

This is to enable the formulation of framework, regulation and policies that support and not hinder innovation. It’s a great policy move but in reality, the Government at large has yet to buy into this transformational change.

If you ask around – as far as talent development and retention goes – much of the Government remains in denial. President Ronald Reagan once said jokingly the nine most feared words in the English language are “I am from government and I am here to help.” This rings all too true!

Come on, get real

Studies by an old friend Prof Rajah Rasiah identified three underlying causes for Malaysia’s poor showing in last year’s FDI inflows, according to the 2010 World Investment Report – its narrow human capital base, absence of synergy between research and development labs and industry, and inadequate technological absorption, in the face of intensifying competition in Asia especially for talent.

Like it or not, the talent game is dynamic as it is intense. It is not good enough to have a set of policy responses to attract and retain talent. Weaknesses have to be dissected and addressed, and practical solutions neatly designed for effective implementation in a well coordinated fashion.

Most policy pronouncements reflect incentives offered by the Government which it considers attractive. Nobody bothers to ask the targeted talent what they want and what it takes to make them want to move.

The tendency is to assume that, given the right incentives, Malaysian talent overseas would move back and foreign talent is readily attracted to come to Malaysia. Hence, the dismal failure of the “brain-gain” programme. The approach is all wrong. Get real!

The bar on talent has since been raised. Fuelling the war for talent, enterprises in Asia are providing higher salaries and perks.

A sea change is taking place in the way businesses organise themselves, create wealth and market their brands and wares worldwide.

The rise of the Web and tech-based professions in logistics, biotech, life sciences and information technology put a premium on scientists, engineers, financial analysts and computer geeks.

In Asia, soft skills which were previously sidelined (such as adaptability, English and Chinese skills, ease in fitting into other cultures, negotiation and political savvy), are now in demand.

It’s no longer enough to be talented in Oracle and Java. Global experience, an ability to lead multicultural teams, and diplomatic know-how to move seamlessly across borders, are among the skills in short supply.

The globalised economy has changed everything. Indeed, businesses will ultimately have to rethink the way they recruit and steward talent.

Today, China and India are becoming sources of innovation. Already, these nations are benefiting from “brain-circulation”, with capital and talent returning after value-adding in skills and experience abroad.

This is occurring without government incentives. National ecosystems are evolving nicely for them. It’s happening simply because it makes good business sense. There is much Malaysia can learn from the new reality.

As wealth and power change hands, talent is no longer a buyer’s market for the traditional rich. By 2015, the International Monetary Fund projects that Asia-Pacific will make-up 45% of global gross domectic product as against 20% by the US and 17% by Euro-zone.

The talent drain can only get more intense. We now have a world where talent can be found anywhere. The problem is particularly acute in Asia and Latin America, where breakneck growth is pushing management to the limit.

The talent crunch is real. Throwing money and incentives at talent won’t necessarily solve the problem. We need to think long-term and re-think old ways.

To do that, corporations are already investing to create the talent they lack, going so far as to establish their own universities to shape raw recruits into corporate leaders. In the end, nations need to have a workable process to recognise talent, fast-track careers, and provide fresh opportunities; essentially, to understand what makes them tick.

It needs high-potential programmes to attract and retain key talent within an ecosystem that provides for high living standards, where security and rule of law are taken for granted.

But, risks remain in the global economy. Concerns of citizens must be addressed by developing and investing in them. The quality of tertiary and vocational education has to be raised as a matter of priority. Imported talent will reinforce local talent; only bring in people who can contribute. Striking the right balance is vital.

>Former banker Dr Lin is a Harvard-educated economist and a British Chartered Scientist who now spends time writing, teaching and promoting the public interest. Feedback is most welcome at starbiz@thestar.com.my.

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