Globally there has been substantial demand for innovation and human capital in innovation as evinced by the growing number of innovation labs. More so, within the Asian region as having overtaken Europe in terms of the number of corporate innovation centers. Vietnam is no different and in fact ranks highest in terms of innovation performance amongst the lower-middle income group of nations and has, in the previous few years, outperformed wealthier nations such as India, Malaysia, and Philippines.
Innovation is currently a trigger word within the corporate world with recent survey data suggesting that the notion of innovation consistently ranks in the top-3 priorities for firms. There is also some evidence that firms who has invested heavily in innovation over the recent global health crisis demonstrated increased performance over their counterparts. However, whilst there is substantial interest in innovation, it is still a very difficult concept to define given its idiosyncratic nature to the firm, but what we do see is that very few firms are keen to be seen as non-participative within the innovation landscape.
This lack of a prototypical definition could potentially be an explanation for the lack of ability of firms to be able to scale their innovation investments so that it generates value for the firm. In other words, whilst firms are able to adopt isomorphic practices in emulating industry characteristics in terms innovation labs and sectorial antecedents for innovation infrastructure, the ensuing outcomes vary substantially between success and failure.
The same market report that indicated increased performance over COVID-19 for innovation-investment heavy firms, is also quick to point out that the proportion of firms who are able to scale innovation is an insignificant 20%. From an institutional perspective, this presents a challenging conundrum and one that has to be addressed. A review of the extant literature highlights three core areas – i) a lack of company culture, ii) poor consideration for intra- and inter-company collaborations, and iii) an absence of appreciation for organizational goals and alignment to corporate objectives. Put simply, firms have the specialisms and technical knowledge to innovate, but they lack the leadership infrastructure to coordinate, guide, and drive these resources towards achieving firm objectives.
So how do we confront this issue? With the launch of the new Innovation & Enterprise major at RMIT university, we engaged enterprise and business leaders as well as industry partners in conversation about innovation readiness and scalability to better understand the solutions to this corporate innovation and value gap. We also combined these conversations with a review the extant academic landscape for explanations to help address these phenomena. We discovered four broad interventions.
Firstly, there is a need to look beyond our organizations to drive innovation. Whilst utilizing and developing internal innovation resources is a good thing, augmenting these dynamics with external mechanisms can be one of the additional impulses towards narrowing the innovation and value gap.
Secondly, developing an understanding of organizational structure helps shape the initiation of these valuable innovation resources. Organizational structure here refers to both tangible structures such as branch networks and geographic location, as well as, less-tangible socio-political structural assemblies such as leadership and governance arrangements.
Thirdly, an appreciation for the necessity to cultivate and support diverse teams. Innovation is or can be a disruptive process, requiring organizations and their agents to better understand current pain-points and address any fixedness in thinking to generate solutions. Facilitating an environment that allows individuals to creatively disagree whilst at the same time supporting socio-psychological dimensions of such difficult discussions is important towards the innovation process.
Finally, there is a need to understand the regulatory landscape in relation to aligning this with organizational goals. Do note that innovation really only takes place in the face of obstacles and the local and international regulatory landscape helps to parametrize institutional innovation.
These broad interventions for narrowing the corporate innovation and value gap will also have implications on future generation, especially current and graduating students heading into the labor market. The comprehensive message is that there is a need to be mindful of skills complementarity and adaptability in light of the ensuing digital transformation of our economic systems.
Traditional skill sets will have to be augmented to accommodate such rapid transformation and there has to be awareness of the benefits of opportunities for collaboration. Whilst it is possible to innovation alone, we observe its greatest marginal benefits from working collectively and collaboratively both physically and digitally.
Seng Kiong Kok, Greeni Maheswari, Esmira Hackenberg, Tam Le
Innovation & Enterprise, RMIT University Vietnam, School of Business and Management, Ho Chi Minh City, Vietnam