Building for success: Establishing an innovation framework in Malaysia

  • TECH
  • Wednesday, 02 Jul 2014

Cultivating innovation: Chen advises Malaysian companies to create an environment where workers can take risks and bring up great ideas.

More and more Malaysian businesses have begun to recognise the importance of innovation this year, with many working towards becoming “disruptive ready” organisations. 

According to the 2014 General Electric (GE) Global Innovation Barometer, an international survey conducted across 26 countries including Malaysia, 89% of local respondents were of the view that innovation is a positive force which has helped improve the nation’s standard of living over the past 10 years. 

“Malaysia is still at the preliminary stages of innovation,” says Dr Xiangli Chen, vice president and chief technology officer of GE Research and Development (R&D) Centre in Shanghai, China. 

“Organisations here continue to look to the government to drive innovation and most do not see small and medium enterprises (SMEs) and startups as playing a significant role.” 

GE’s survey also reported that 32% of respondents preferred to see government subsidies or incentives allocated only for local startups whereas a larger percentage (54%) were of the opinion that it should be made available for both local as well as international businesses. 

In addition, the survey found that 63% of Malaysian executives recognised the need to encourage creative behaviour and disruptive processes within their organisations in order to innovate successfully. 

Collaboration was also seen as an effective means for innovation by 75% of respondents, with 64% claiming there has been growth in their revenue as a result of such activities. 

Meanwhile, 72% of respondents said they believed innovation ought to be a structured process, as compared to only 28% who said that innovation should involve spontaneity. 

The survey also showed that 58% of Malaysian companies highly valued predictive analytics, while 83% identified understanding customers and anticipating market evolutions as crucial for a favourable outcome. 

Conquering challenges 

However, several challenges still remain for Malaysian organisations in their quest for innovation. Among the outstanding issues are the lack of talent or inadequate skills, which was highlighted by 28% of the respondents in the survey. The incapacity to scale up to reach wider or even international markets was another difficulty faced by 26% of the companies. 

“You have to grow local talent,” emphasises Dr Chen. “I think universities need to step up and re-examine at how they educate technical talent. There needs to be better ways of linking students to the industry.” 

He adds that companies also have a role to play in training workers to become better innovators. 

“Create an environment where people can take risks and bring up great ideas and get sponsorships,” advises Dr Chen. 

Although he admits that attracting external talent is one of the quickest ways of building up a talent pool, he cautions that this is not a sustainable model. 

“It’s expensive and temporary, but I think it’s useful in the early stages of developing your talent pool in order to have experts with experience from other markets,” he points out. 

This is the second year in which Malaysia has participated in the GE Global Innovation Barometer. 

On the whole, the results were encouraging although the local innovation landscape is still viewed as being rather conservative in comparison to other neighbouring countries, particularly Singapore and Indonesia. 

Foreign respondents have reportedly viewed Malaysia’s progress very critically, with only 23% saying that Malaysia has developed a framework that’s conducive for innovation. However, 34% of Malaysian respondents said they felt there has been a great improvement this year compared to 2013 (an increase from 22% in last year’s survey). 

Related stories:
Igniting innovation: Collaboration, prioritisation and analytics
Leading through innovation

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