Malaysia’s Performance in 2016 GE Global Innovation Barometer

TOPLINE REPORT

19-Jan-16

Hafiza Atha Ahmad

1.0 INTRODUCTION

The GE Global Innovation Barometer (GE GIB), now in its fifth edition was released on 19th January 2016. Spanning across 23 countries, it is an international opinion survey of senior innovation executives all actively engaged in the management of their firm’s innovation strategy. This year the GE GIB also surveyed the view of informed publics in 13 countries.

The Barometer explores how the perceptionof innovation is changing in a complex, globalized environment, and how they appreciate the framework for innovation their country has developed. In addition, it explore the perception of Informed Publics on the impact and value of innovation, the associated responsibilities with driving and supporting innovation and their opinions on the future of works.

2.0 MALAYSIA’S PERFORMANCE

There are four key focuses of the findings:

a) A welcome revolution

b) Embracing new models and technologies

c) Disruptive innovation: the solution and the challenge

d) Everybody's starting up

A welcome revolution

How does the prospect of entering a fourth Industrial Revolution make you feel?

  • The Business Executives in Malaysia are 76% OPTIMISTIC, 72% CONFIDENT, 71% CURIOUS,66% EMPOWERED, 67% EXCITED and 55% IN CONTROL about the prospect of entering a 4th Industrial Revolution. The 4th Industrial Revolution or the ‘Industrial Internet’ - is the next wave of innovation impacting the way the world connects and optimizes machines. Through the use of sensors, advanced analytics and brilliant machines, the 4th Industrial Revolution is profoundly transforming the way machines connect and communicate, enabling productivity and efficiency gains, anticipating maintenance before breakdowns occur and transforming today’s workforce.

Embracing new models and technologies

How important do you think the following elements are for a company to be able to innovate successfully?

  • In 2015,65% of business executive in Malaysia recognisesthe importance to be able to innovate successfully using big data and analytics to improve strategic knowledge and inform decision-making (2014: 58%).

Has the revenue and profit generated by collaborative innovation activities been growing over the last year? (% yes)

  • In 2015,81% agreedthat the revenue and profit generated by collaborative innovation activities has increased (2014:64%).

Is your firm open to sharing the revenue stream or the revenue losses that could be generated through a collaborative innovation initiative? (% yes)

  • 70% of firm in Malaysia is open to sharing both the gains and risks of collaborating.

Disruptive innovation: the solution and the challenge

How far does the difficulty to come up with radical and disruptive ideasprevent businesses ability to innovate efficiently?

  • In 2015, 69% executives report difficulty coming up with disruptive innovation(2014: 65%). A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances.

How much do you agree or disagree with more and more businesses face “Digital Darwinism” – becoming obsolete as technology is evolving faster that they can adapt?

  • 88% executives agree that more businesses face Digital Darwinism and Fear of Becoming Obsolete (FOBO).

How much do you agree or disagree with regulations around privacy and data protection are preventing businesses from launching and adopting more radical or transformative innovations?

  • 68% agreeregulations around privacy and data protection are preventing businesses from adopting more radical or transformative innovations.
  • 69% agree regulations around privacy and data protection are preventing businesses from launching more radical or transformative innovations.

Everybody's starting up

Incremental innovation (improving existing products and solution) or breakthrough innovation (launching products that are completely new and have the ability to disrupt their market) is the most relevant innovation strategies approach by the company?

  • 59% prefer incremental innovation as the most relevant innovation strategies approach.

Protect the core business or bringing innovative products and/or services to market as fast as possible is the most relevant to the company’s approach?

  • 64% prefer to protect the core business as much as possible, so it continues to generate the profitability needed to support research and innovation efforts rather than bringing innovative products and/or services to market as fast as possible without worrying about the short term impact it can have on the core business.

Maximising performance of existing revenue streams and business model or opening up new revenue streams and inventing new business models is the most relevant to the company’s approach

  • 53% prefer to make most of existing revenue streams and business model.

Does your company have a clear innovation strategy?

  • 79% confirm that the company has a clear innovation strategy.

Risk taking is a challenge that prevents businesses ability to innovate efficiently.

  • 60% agree that risk taking is a challenge preventing businesses ability to innovate efficiently, the incapacity of the business to take risks.

How does your company currently perform against these success criteria of to be ready to accept a long term ROI to allow breakthrough innovation?

  • Only 20% is readyto accept a long term ROI to allow breakthrough innovation.

The reports also include supporting findings such as workforce, digital revolution and impact of automation. Malaysia’s performances on these findings are:

  • 70% agree that the current education system is adapted to fulfillthe private sectors’ demand for new talent and skills.
  • 42% agree businesses should play an active role in educating their employees for the digital revolution.
  • 42% agree businesses have the responsibility to skill their workers for a digital reality particularly to retool re-skill and find new uses for the labour force.
  • 59% perceived that digital revolution will have a positive impact on employment.
  • 45% agree there will be impact of automation on job roles: drive a displacement of tasks in favor of machines.
  • 41% business executives agree that the potential negative impact for lower-skilled workers is not a concern. Limit job opportunities and/or drive wages down for individuals with lower skills is among the outcomes of impact of automation on job roles.
  • 62% business executives agree on the opportunities automation can create such as offer workers opportunities to assume new, potentially higher-value roles and responsibilities.
  • 50% business executives agree that automation will have benefit such as workplace safety.

3.0 HIGHLIGHT OF THE REPORT

Key take-away from the report includes the following:

  • 61% are using Big Data and analytics to improve decision-making up from 53% in 2014. Where 73% of the companies had increased their ability to analyse large amounts of data in the last year, up from 43% in 2014 and 59% are seeing a positive outcome from the Big Data investments.
  • 68% of global executives are optimistic about the 4th Industrial Revolution or Industrial Internet. The sentiment analysis dimensions also include confidence (60%), curious (70%), empowered (62%), excited (61%) and in control (59%).
  • On Innovation landscape, 86% of executives believe Advanced Manufacturing will radically transform the industrial sector and only 17% is fear of potential negative impact of digital revolution on employment.
  • 45% of High Tech / IT executives are likely to favor breakthrough innovation. GE also found that speed of innovation and time-to-market is an increasingly critical differentiator. 46% of executives prioritize getting to market as quickly as possible to keep an edge on the competition, even if this means having an imperfect product or service and improving it along the way.
  • 73% measure the contribution of innovation to their business performance. 68% have a clear innovation strategy and 62% of that still struggle to come up with radical and disruptive ideas. GE found that just over half of enterprises (58%) are investing in the improvement of existing products or services, and 34% are investing the in the development of new business models.

4.0 METHODOLOGY

The research was commissioned by GE and conducted by Edelman Berland between 13 October to 7 December 2015. Asurvey was conducted among 2,748 business executives of which 1,915 are c-suite level across 23 countries. The respondents’ line of work involves taking part in their company’s innovation process or policies. They are responsible for making decisions related to innovation, product development or research and development (R&D) activities in their company. This year GE GIB also includes 1,346 respondents from the public across 13 nations. These public respondents are from university education or above, in the upper quartile income of their country, regularly consume top tier business news publications, and usually follow public policy matters in the news.

The full report is accessible at