“THERE are no whole truths; all truths are half-truths. It is trying to treat them as whole truths that plays the devil,” said Alfred North Whiteheadan, an English mathematician and philosopher. And, rightly so.
Today, we often hear that innovation is required for job creation. That we must teach graduates to be industry ready. Or that good leadership comes from the top. Are these truths or half-truths?
Asean has faced, and continues to face many challenges, from the global economic crisis in 2008 to the political challenges within each nation. Despite this, the Organisation for Economic Co-operation and Development (OECD) has projected a 5.5 per cent average growth rate from 2013-2017.
We need to appreciate that this growth is the result of the demographic dividend enjoyed due to a young and vibrant population. However, this is not expected to last beyond 2030 and even now, in an increasingly connected and digital age, the clamour for job creation is getting louder.
The Brookings Institute of Washington, DC, offers us some valuable findings. In 1980, to generate US$1 million in manufacturing output, it took 25 jobs. That output could be achieved with just 6.5 jobs in 2015. Further back in history in 1979, to generate US$11 million, General Motors needed 840,000 workers whereas in 2012 Google needed fewer than 38,000 employees to generate US$14 billion! Innovation and entrepreneurship in technology caused those dramatic changes. And, it continues to this day.
What should Asean economies do to grow sustainably along with an inclusive economic agenda that leaves no one behind? The innovation march is on and we must be prepared. It is important to recognise that all three principal types of economies — factor-driven, efficiency-driven, and innovation-driven — are present in all national economies. But, their relative prevalence and contribution to economic development varies.
The World Economic Forum Global Competitiveness Report’s proposition is that each phase of economic development has a different optimal combination of these three activities. There are five key approaches that can be accommodated by economies at every stage of their economic growth.
One, embrace innovation. There needs to be a move away towards disruptive as opposed to just sustaining and efficiency type innovations, if economies are to ultimately grow.
From a countrywide economic standpoint, the first mover advantage may not be an advantage within the Asean context in its need to create jobs. Unless those first mover advantage is efficiently leveraged and the firm quickly achieves scale whilst still delivering cost reductions to the customer.
AirAsia Bhd is a good working example of that, hiring well over 6,000 employees. Asean firms need to invest in efficiency and sustaining- type innovations whilst constantly keeping an eye on the disruptions coming their way. This is done by looking at the significant forces, usually technological forces, impacting their industry. To keep a balance, they could spin off smaller firms that can readily embark on self-competing innovations. Such vulnerability measures reflect the intuitive wisdom of the entrepreneur at work.
Two, innovative leadership. Leadership is not solely about the leaders themselves, but what they do to make their employees great, their positive influence and ability to inspire.
Leadership is seen at all levels within organisations. More apparent today is the importance of the followers of leaders, and in turn their followers, that make a big difference to innovation within organisations. They must want to follow you, not because they are paid to do so. That makes a boss the “superboss”.
Asean may not be amongst the innovation driven economies yet, but our millennials already are, both in behaviour and mindset. In order to capture their imagination and harness their drive and potential, today’s leaders will need a “superboss” mentality. Millennials are prepared to be guided, not instructed, engaged and supported, not dictated to.
Three, collaborate for industry innovation. Collaboration to sustain and enhance innovation efficiency usually also means producing cheaper and cheaply. The automation involved will result in job reduction, either by head count or hours worked.
Until and unless new markets are found quickly, that are sufficiently large, it will not result in job creation. Collaboration is crucial. A good example is the recent strategic alliance between Johor Corporation and Siasum Robot Investment Co Ltd to create a Robotics Future City in Johor.
Four, learning to learn. Too often we hear the phrase: “we must prepare our graduates for industry”. But, what industries are we referring to? Is it the IT industry, banking, tourism, or airlines? History over the last 25 years has shown that those industries have undergone significant changes and will continue to do so. At no time has institutions of higher learning been able to prepare graduates as required by industry. In fact, thanks to technology and automation, there is even less of such jobs available for graduates. The reality is that institutionalised teaching will always play catch up to innovative industry changes.
Graduates must learn-to-learn so that they can be independent whilst filling gaps and adding value as required; be it for existing firms or their own businesses.
Five, fuel your innovation. Innovative ideas by themselves mean little. Exploit new innovative ideas through entrepreneurship. It will bring about economic growth and that much needed job creation.
Innovation is critical, but we need to appreciate its impact on nations. The increase in gross domestic product and productivity can also result in many who will be left behind. Conversely, the unbridled redistribution of wealth garnered from such innovation efforts can stagnate a nation’s growth opportunities. Thus, our dilemma.
A step in the right direction is to appreciate the half-truths through reflection and open discussions. In the short to midterm, inclusive growth must give way to innovation-driven growth.
This is a bitter pill, but the realities for a peaceable nation are what they are. Innovation’s growth needs to be tempered by inclusion across ethnicity, gender, demographic groups and regions. Innovation is the result of a nation’s enterprising human capital and right mindsets, nurtured through an uncompromising education system. Anything less is a compromise and no nation can afford to compromise job creation.
The writer is Deputy Dean of the Bank Rakyat School of Business and Entrepreneurship at Universiti Tun Abdul Razak (UNIRAZAK). He is also the Programme Director of the Entrepreneurship programmes in collaboration with Babson College, Boston, USA