Strategic innovation key for growth

14 Apr, 2019 - 00:04 0 Views
Strategic innovation key for growth

The Sunday News

Sithabile Gandi Ndlovu

AN innovation strategy is a plan used by an organisation or enterprise of any size to encourage advancements in technology or services usually by investing money in research and development activities. An innovation strategy is not about the selection of activities that are divergent from those of competitors (although that is the general misconception), but rather it is about creating products and services that are viable to the market and profitable as well. 

Technology in business is a growing necessity, innovation breeds business and since technology paves the way for it, it can therefore be concluded that businesses need technology to be sustained. The Information Technology (IT) Revolution, describes current economic, social, and technological trends beyond the industrial revolution. The main feature for the revolution is the growing economic, social and technological role of information. The IT revolution extends far beyond the technology sector, in any case all kinds of organisations not just tech companies are finding ways to leverage IT to improve their business processes. 

Both new and old economy firms must embrace IT as both can benefit from the revolution. Business leaders should however, work to create a competitive setting for all business survival and success in a high tech era. This can be achieved through investing in IT infrastructures and providing the right educational programs at adequate scale to meet new skill requirements of employees. It is important that leaders invest in the development of key competencies. Influencers must also insist that their organisations lead in effective use of new technologies and that the local provincial areas build a strong relationship with provincial areas abroad. The local provincial areas must understand the changing nature of their business environment and respond nimbly to its demands, this as a result will create the best environments for a firm and economic growth. 

Technology can be regarded as a primary source in economic development and there are various technological changes that have the potential to contribute significantly in the development of underdeveloped countries such as ours. Technology development and economic growth are inextricably interwoven. The level of technology is an important determinant of economic growth. If technology becomes constant the process of growth stops, hence it’s the technological progress which keeps the economy moving. Research shows that inventions and innovations have been largely responsible for rapid economic growth rate in developed countries. Studies have shown that technological advancement is even more important than capital formation, which is the net capital accumulated during an accounting period for a particular country. However, capital formation alone cannot bring out economic development, it can only do so up to a limited extent and the progress stops if there are no technological changes. 

Nations that have business leaders that spend more on science and technical infrastructure and development will tend to grow faster than other countries where accumulation of capital is a core for businesses and less is spent on technology investments.

As we have experienced a time of deteriorating growth in our economy and continued volatility, it is safe to assume that many business leaders are looking for policies that stimulate growth and create new jobs while cutting costs and increasing efficiency. It is not only one of the fastest growing industries with a potential to directly create millions of jobs but it is also an important enabler of innovation and development. 

The IT spending volume is the corporate spending for hardware, software, data centres, networks, and staff for both internal and outsourced IT services. Currently this volume is close to US$ 4 trillion per year across the globe. Meaning that if we were to put this number on an illustrative perspective and consider the global technology economy as a country and its yearly spending the GDP, it would be ranked the third largest economy between the economies of China and Japan, and more than double the size of the economy in the United Kingdom. 

Technology spending, gross margins and economic growth have a strong relationship when measured by productivity and GDP. Within most companies around the globe, in every industry technology investment is growing faster than revenues and in many cases faster than the GDP of any country. It must be clear to all companies that technology is vital to the success of their operations and to the global economy at large, but not being able to manage spending within a few years ahead will require an increasingly sophisticated way of looking at the world and at a company’s performance. Zimbabwean business leaders will need to go through a complete paradigm shift in order to appropriately implement the technological strategies that will impact the economic renaissance of the nation.

It is vital that organisations be realistic about the number of innovations they want to undertake at a given time. The riskiest thing is to take no risk however, organisations must be careful to avoid overdoing it. Technology is evolving at a rapid state and those that do not go aboard the “tech train” will surely get left behind.  

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