Leading through innovation

  • TECH
  • Wednesday, 02 Jul 2014

If you’re a technopreneur operating within an emerging market, take heart: Innovation can come from anywhere and you stand just as good a chance as anyone to break new ground in your realm of expertise. In fact, it seems like the odds may even be stacked in your favour lately. 

“Emerging markets have taken off dramatically in the last 10 to 20 years,” observes Dr Xiangli Chen, vice president and chief technology officer of the General Electric (GE) Research and Development (R&D) Centre in Shanghai, China. 

“The growth of emerging markets is much faster than developed markets. There will be more ideas coming from emerging markets because of the demand. The pain experienced by customers is much more severe in such places and I think that’s a big driver for innovation. When you have an unsolved problem, that’s when innovation can happen really fast.” 

He explains that it is becoming more common nowadays for innovation and new technology to flow from developing markets to developed ones. GE terms this as reverse innovation. 

For example, its research centre in Shanghai had initially started off five years ago by transferring technology for GE’s medical equipment from the company’s North American operations, he says. The team in China started localising the design of the machines by sourcing materials from the local supply chain. 

Today, they are developing their own range of next-generation medical equipment which not only cost less but is able to handle greater volume to meet the demands of a larger population such as that of China’s. 

“Instead of being an exporter of machines from the North American market, we are now a creator of technology and ideas that are rooted in market evolution,” Dr Chen says. “This is an important transformation over the last decade for a company like GE.” 

Emphasis on practicality 

According to Dr Chen, an innovative spirit lies at the very heart of GE’s corporate culture, and it is this characteristic that has enabled the company to achieve most of its past successes. Currently, the company invests around US$5bil to US$6bil (RM16bil to RM19bil) annually for R&D activities, which comes up to around 5% to 10% of the GE’s global revenue. 

“Innovation for GE is rooted in the needs of the market,” he says. “It’s about building a bridge between science and technology, and customers by making a product they can use.” 

According to Dr Chen, GE now practices the concept of open innovation. This is where the company works collaboratively with external parties to co-develop its products. 

“We cannot just create all the ideas and innovation within GE and then deliver the products to our customers. That’s not good anymore,” Dr Chen points out. “We now have a very open process where we engage customers and identify issues in the early stages of product development.” 

“The emphasis here is on co-creation. It’s only in the last 10 years or so that we’ve become much more open in our innovation process. We realise that engaging customers early on and bringing in partners to come up with solutions is important. It’s a win-win situation.” 

Dr Chen also highlights that it’s crucial to bear in mind that advancement in technology itself may not always be the answer that customers are looking for. 

“There are many examples in the innovation process where solutions itself are more important, and it’s not just about advancing state-of-the-art technology,” he explains. 

Order in creativity 

Although innovation is often viewed as being the result of out-of-the-box thinking, Dr Chen says great ideas can also be birthed through a process driven approach. 

“Sometimes processes can suffocate creativity, but in our case, it has provided us with a high probability of success year after year,” he claims. 

For instance, Dr Chen says GE organises what the company calls Session Ts every year (the T here refers to “technology”). 

“This is the session where three major business functions get together: marketing, technology and research. They will discuss innovation ideas within one to three days, and then proceed to prioritise on the opportunities for investment over the next three to five years,” he says. 

Despite describing this as being a “very disciplined approach”, Dr Chen adds that it is not a fixed process either. There is still plenty of room for changes to be made on a weekly or monthly basis, depending on the ongoing discussions which take place within the organisation. 

Furthermore, he shares that 10% out of GE’s annual R&D investment is dedicated to what he terms as “wild ideas”. 

“That’s where disruptive thinking can be encouraged, but it should not be where the majority of funds go. We still have a responsibility to customers to deliver reliable products. However, a small portion of resources should be set aside to stimulate risk taking,” Dr Chen says. 

He adds that larger corporations can learn valuable lessons from startups as the former often tends to lose out in terms of responding in a timely manner to meet changing market demands. 

“The methods for innovating are converging. We are now also looking into how we can do certain things the startup way,” he says. 

Related stories:
Building for success: Establishing an innovation framework in Malaysia
Igniting innovation: Collaboration, prioritisation and analytics

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