Malaysian executives more satisfied with govt support for innovation than their global counterparts
However, key concerns are lack of entrepreneurial culture in education system plus red tape
THE majority of senior business leaders in Malaysia who responded to a survey on innovation gave a resounding thumbs-up to the Malaysian Government’s various programs to inculcate innovativeness, in stark contrast to their counterparts overseas.
In the GE Global Innovation Barometer, 65% of Malaysian business executives report that Malaysia has an environment strongly conducive to innovation – behind only India, Singapore, Israel and the United Arab Emirates – while only 29% of executives from the other countries in the survey thought so well of Malaysia (click charts at the bottom to enlarge).
GE Asean chief executive officer Stuart Dean (pic) attributed this difference to Malaysia not marketing itself properly on all it has done, to the business community in other countries. “More has to be done here,” he said at a Feb 4 briefing for local media in Kuala Lumpur.
He noted that the Government has identified innovation as a key factor to drive the Economic Transformation Program (ETP), which aims to transform the country into a high-income economy. “Many of the Entry Point Projects (EPPs) under the ETP are indeed very innovative,” he added.
The GE Global Innovation Barometer was commissioned to explore how business leaders around the world view drivers and barriers to innovation and how those perceptions influence strategy.
The survey, commissioned by GE and conducted by StrategyOne, polled 3,000 senior business executives across 25 countries, including Malaysia, Indonesia and Vietnam. All the executives, from a similar variety of industries, were actively involved in their organizations’ innovation strategies.
“It is very clear that most (85%) Malaysian executives feel that innovation is very important to their businesses, and they also recognize the key factors needed to drive innovation, such as collaboration,” Dean said.
The Malaysian average is slightly lower than the global average of 91% who feel that innovation is a strategic priority for their company.
These Malaysian executives felt that the types of innovation that would drive their business include:
Improvement of existing products or services (mentioned by 72%);
Development of new business processes (mentioned by 67%, higher than the global average); and
Development of entirely new products (mentioned by 66%).
Also, 65% of Malaysian respondents mention the development of new business models as a promising way to boost future performance, higher than the global average of 52%.
“One possible reason for this is the enormous success of the AirAsia business model in transforming the regional aviation landscape,” said Dean. “There’s nothing like a local best practice to lead the way.”
Malaysian business executives had good marks for the Malaysian Government’s support and programs for innovation (click table to enlarge).
They were more satisfied than the global average when it came to government support, especially over the budget allocated to supporting innovative companies. The Malaysian Government also got high marks for being more efficient and coordinated when it came to supporting innovation.
“Here, high marks and commendations must be given to bodies like Agensi Inovasi Malaysia (AIM) and its CEO Mark Rozario, who have been doing a tremendous job to drive the innovation agenda,” said Dean.
The respondents also felt that Malaysian society is more accepting of taking risks as part of the innovation process; is more supportive of innovation; and that there is a stronger appetite for innovation among younger generation than the global average.
However, Dean said there were key concerns about education. “Many of the Malaysian respondents that there should be more collaboration between universities and industry,” he noted. “Really great innovation occurs when there is great collaboration between universities and industry, as Silicon Valley so often illustrates.”
These executives also said there was a need for a stronger entrepreneurial culture in the education system, and less bureaucracy and red tape.
To innovate successfully, Malaysian respondents identify key abilities their businesses need to master as:
Understand customers and anticipate market evolutions (82%), a result in line with the global average;
Identify and work collaboratively with the best business partners (75%), nine points above the global average;
Attract and retain innovative people (67%);
Develop new technology (62%); and
Mining data inside and outside the company (in line with the global sample priority with 57% of respondents mentioning it as a key ability vs. 53% of the global sample) 50% of Malaysian respondents believe that the development of new business models is crucial vs. 45% of the global sample.
The Malaysian executives also identified similar factors that drive innovation as their global counterparts, among them being collaboration.
“One of the things that GE has learned over the last 25 years is that many factors are involved in innovation, and one of it is that we cannot go it alone – either as GE or in the United States,” said Dean.
“Innovation is truly a global phenomenon, and you need to be able to work with others,” he said on the need for collaboration.
85% of Malaysian respondents report that their firm has been increasingly looking at innovation through the collaborative angle;
93% of respondents strongly agree their firm would be more successful at innovation through partnership than if their company went about it alone; and
Innovation can start from all kinds of economic actors (over 88% of Malaysian respondents in 2013 believe that small and medium enterprises and Individuals can be as innovative as large companies).
The reasons they cite for collaborative innovation include the ability to enter new markets (77%); scale up (75%, above the global average); and access new technology (74%).
“All in all, I have to say that Malaysian is well on its way towards becoming an innovation-driven economy, but is not there just yet,” said Dean.
An Environment Conducive to Innovation:
Signs of anxiety amongst business leaders: GE innovation study
New AIM chief aims to deliver
Asean businesses starting to take innovation seriously: Survey
Giving our own start-ups a fair shake
Malaysian online consumers less likely to be early adopters: Nielsen survey
Point: ‘Make Malaysia a nation second to none’
Counterpoint: PM’s Genovasi drive just doesn’t jive
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