Corporate Innovation: Are we Malaysians doing enough?
Almost 90% of corporates believed that the after happening Covid-19 will permanently alter the way they operate their business over the next 5 years.77% of business decision-makers in Malaysia have learned that innovation is now a ‘must’ for them to respond quickly to market challenges and opportunities, and ensure business resilience.
Why is Corporate Innovation more relevant than ever?
A recent survey by Mckinsey [1], reveals that the Covid-19 timeline crisis presents an opportunity that few feel equipped to pursue, as 85% expressed concerns that the COVID-19 crisis will have a lasting impact on their customers’ needs and wants over the span of the next 5 years. To further substantiate the need for corporations, almost 52% of Fortune 500 companies since the year 2000 have either gone bankrupt, acquired, or ceased to exist, according to Harvard Business Review. From the perspective as an entrepreneur, such statistics emphasise the significance of prioritising innovation in your company.
Statistically however, only few feel prepared to tackle the challenges in the current climate:
Only a slight portion of 21% have the resources, leads and commitment to actually pursue newer heights successfully.
Two third (⅔) of the people surveyed believe that this will be the most challenging moment in their executive career.
In essence - Doing business is much harder now. What stands contrary however, is that 75% also agreed that the crisis will definitely create significant new opportunities of growth for certain industries.
Where Are We Currently Standing?
On the global perspective, Malaysia is currently ranked 37th, and is quickly climbing up the rankings according to the Global Innovation Index report in 2022 [2]. As stated by Samira Suffian, CECO of Commerce Asia [3], corporate innovation is still at an early stage in Malaysia, despite some companies being capable of embracing it more quickly than their peers.
Ranking on the 20th place in terms of GDP amongst emerging markets, Malaysia is receiving attention from the outside world as the 38th largest economy in the global scale. Malaysia is also a startup-conscious country in the sense of having one of the strongest startup economies among the Southeast Asia area, being ranked 4th place overall. Also, as one of the advanced countries on a global scale, Malaysia is predominantly populated by businesses from the tertiary sector, namely both Manufacturing and Services sector, which is the most adjacent to the concept of innovation out of the three established sectors.
In accordance with Accenture (NYSE: ACN) Wise Pivot C-level survey [4], Malaysian companies strategically approach the topic of innovation with the purpose to unlock value in new business opportunities, without the need to leverage said innovations to revitalise their core business.
Exhibit 1: International Patent Applications Within Asia-Pacific Region
As observed with Exhibit 1, a count of 143 successful international patent applications in recent years justify that Malaysia is a leading force of global scale innovation among the ASEAN countries, and is completely capable of causing impact on a global level; only to be outpaced by both Singapore and India in numbers alone.
Are you doing enough to stay ahead?
Most Malaysian companies are confined within the approach of the Culture of Innovation as a business element out of consideration for viable long term returns; hence only 17.9% of the companies are investing great efforts in staying ahead of competition with disruptive innovation. This is evident that as most Malaysian organisations are not yet major innovators; awareness of innovation and recognition of its importance is growing, but the companies have yet to excel at innovation.
We have identified 4 levels to measure the innovation maturity within an organisation, which is defined by the following traits and qualities in the brief description below:
What are the priorities of the corporations for the next 12 months?
74 per cent (74%) of the chief executive officers (CEOs) in Malaysia believe global economic growth will experience a declining trajectory over the next 12 months, while 73 per cent (73%) globally share the same sentiments, said PricewaterhouseCoopers (PwC) in an article by The Star on 19th January 2023. Here are some of our predictions for the top business and technology trends in 2023.
1. Reducing technology experimentation and shifting focus to building scale, adaptability, and resilience
After a turbulent year of political war, tech valuations buble, skyrocketing inflation, and aggressive rate hikes, modern corporations are focused on building recession-resistant portfolios. Despite the incentives provided by the Malaysian government for private sectors to get involved, the private sectors remain cautious of their allocations and the health of its cash flow.
2. Wide adaptation of corporate responsibility
Corporate responsibility is growing in importance, as sustainable development goals (SDG) and environmental, social, and corporate Governance (ESG) become standard industry terms.
With the evolution of regulations and reporting practices, Bursa Malaysia imposing higher sustainability reporting standards, and the launching of ESG advisory services and access to green financing options, there is a growing degree of pressure on organisations to collect and report data that accurately reflects their ESG activity.
3. Supply Chain Stability, Safety, and Security
Supply chains face another year of volatility and inflationary pressure. The year 2020-21 saw multiple layoffs while quarantine put the global market in flux. Air and sea freight prices skyrocketed, and shipments made before Covid-19 caused congestion in port. Companies will further invest into supply chain management to lower operation costs, match up with market demands, and faster reaction to supply chain threats.
4. Unlock value with data and AI in productivity and decision making
Companies will be implementing automation and AI to improve productivity, decision-making with an integrated data platform, data build on a trusted platform, data management solutions and eventually unlocking cost and operational efficiencies with data and AI – freeing both time and budgets for more innovative work that can drive business value.
5. Employees as Supervisors and Users of AI
Continuous employee engagement and proactive, personalised career guidance that an AI workplace can deliver at scale and will also help organisations retain talent. The future of work relies on making decisions based on data. Enabling employees to have an analyst’s mind and make data-driven decisions is especially important as AI democratises data analytics processes.
