Malaysian execs high on innovation readiness index: GE Survey

By Edwin Yapp May 31, 2016

‘Optimistic’ about innovation, but actual innovativeness not measured
Talent still an issue to be resolved to prepare for Industrial Internet age

Malaysian execs high on innovation readiness index: GE Survey

A NEW study by General Electric indicates that compared with their peers globally, Malaysian executives are generally optimistic about what the future would bring in the age of the industrial Internet.

But while these optimistic sentiments were captured in the biennial 2016 GE Global Innovation Barometer Survey, GE Malaysia chief operating officer Azli Mohamed conceded that the gist of the survey centred on the perception ‘innovation readiness’ instead of actually measuring how innovative companies actually are.

“The task to actually measure innovation is done by AIM (Agensi Inovasi Malaysia), which has done a number of studies focusing on local companies and how to benchmark them,” Azli (pic above) told a media briefing on the GE survey results on May 25.

Also present at the briefing was Abdullah Arshad, executive vice president for corporate sector innovation and strategic impact projects at AIM, who was asked what the agency had been doing to measure actual innovation in Malaysian companies.

He said that AIM is currently creating awareness of the need for such innovation indices and is getting companies to understand what AIM wants to measure, in line with an initiative announced by Prime Minister Najib Razak in August 2014.

That initiative instructed AIM to develop the National Corporation Innovation Index (NCII) as a benchmarking tool.

“The NCII is about indexing our local companies and benchmarking how innovative they are,” said AIM’s Abdullah.

“However, the Securities Commission Malaysia has advised us that not all Malaysian companies are ready for such an exercise.

“We are also mindful that if we start evaluating now, such results may affect Malaysian companies’ business and investor confidence,” he added.

Abdullah said AIM is working towards evaluating Malaysian companies in the coming years, and “hopefully by 2018, we will have something.”

Industrial age optimism

GE’s perception-based survey questioned 2,700 innovation business executives, including 100 from Malaysia, and nearly 1,350 ‘innovation-educated’ members of the public, across 23 countries.

A high percentage of Malaysian executives ‘feel optimistic’ (76% vs 68% globally), ‘excited’ (67% vs 61%) and ‘confident’ (72% vs 60%) about the prospect of entering the fourth industrial revolution, otherwise known as the age of the Industrial Internet.

GE defines the Industrial Internet as the next wave of innovation impacting the way the world connects and optimises machines.

Other common terms used to describe this is the Internet of Things or the Internet of Everything.

With the use of sensors, advanced analytics and machine learning, GE believes that the fourth industrial revolution is transforming the way machines connect and communicate, thereby enabling productivity and efficiency gains.

In terms of innovation strategy, 79% of Malaysian businesses (vs 68% globally) have ‘a clear and defined innovation strategy.’

The report also noted that while more Malaysian business executives have a clear process and structure in place to manage innovation as compared with the global average (48% vs 42%), the reliance on consumer research as a foundation for innovation (42% vs 35%) and turning data and analytics into actionable decision-making tools (40% vs 40%) are the most challenging best practices that they are currently facing.

Talent challenge … again

Alarmingly, the study also noted that many of the innovation challenges that faced Malaysian executives from the last survey conducted in 2014 remain, including a shortage of talent.

Talent remains a major challenge, with three-in-four businesses (74% vs 71% in 2014 and 58% globally) seeking a workforce that is creative (64% vs 54% globally) and problem-solving (58% vs 56% globally).

Azli said that while corporate Malaysia has readily embraced innovation, the innovation ecosystem needs to be further elevated in order to have an impact on the nation’s growth.

“One of the most difficult things to teach and to learn is innovation – the ability to do things differently from how it was done before to bring about beneficial change, not only for an organisation but also the larger community and subsequently, the country.

Pressed further as to what can be done now to address the talent shortage, Azli acknowledged that no one company can address this issue alone.

He argued that for its part, GE has been involved in helping shape Malaysian universities’ education curriculum and that it will continue to do so.

Malaysian execs high on innovation readiness index: GE Survey “We plan to have a more interactive, hands-on approach rather than just focusing on the theoretical. For example, we do a lot of reality checks through sharing sessions with GE leaders,” he said.

In a panel session before the survey results were unveiled, Google Malaysia head of marketing Jon Day (pic) recommended that Malaysian companies do more to offer real work experiences to students, rather than just focusing on the university side of things.

“At Google, we offer internship so that they can get experience,” he said. “This way, we help connect them to real work experience and put innovation behaviour into work.”

Related Stories: