See Search Box
lower down this column for searches of Finfacts news pages. Where there may be
the odd special character missing from an older page, it's a problem that
developed when Interactive Tools upgraded to a new content management system.
Finfacts is Ireland's leading business information site and you are in its
business news section.
GE Global Innovation Barometer: Innovation seen as the answer to the challenges of job creation; Paradox of perceptions of countries in lead
By Michael Hennigan, Founder and Editor of Finfacts
Jan 27, 2011 - 3:48 AM
GE Global Innovation Barometer: Political and business
leaders are united in seeing innovation as the answer to
the challenges of job creation but there is an
interesting paradox on the perceptions of which
countries are in the lead.
On Tuesday in his State of the Union address, President
Obama said America faces a challenge to maintaining its
technological superiority, similar to what it faced in
1957 when it was shocked by the news that the Soviet
Union had launched its Sputnik satellite into Space.
“This is our generation’s Sputnik moment,”
instead of a goal of sending men to the moon, the US
challenge today is to develop world-class teachers,
engineers, cleaner energy, smarter scientists and faster
“With so many baby boomers retiring from our
classrooms, we want to prepare 100,000 new teachers in
the fields of science, technology, engineering, and
math,” he said.
Finfacts has often
highlighted the changing model of globalization.
A HSBC Bank report, which was published last summer says
investment in education and R&D is transforming Asia’s skills base. The model
where the West did the development work and the East took care of low value
production is dead. In future, forward looking businesses will take advantage of
the growing skills of Asian workers.
Asian economies are a major global source of skilled workers not
only in sectors such as engineering, technology, nanotechnology and sciences but
also in those such as ICT services and consultancy. The most obvious example is
probably India. Its leviathan Tata Group spans steel, cars and information
technology. Tata Consultancy Services, a multi-billion dollar enterprise based
in Mumbai, employs around 160,000 IT consultants in 42 countries. Wipro
Technologies and Infosys, both headquartered in Bangalore, home to India’s “Silicon
Valley” are also world names in ICT services, together employing more
than 220,000. Delhi’s HCL, meanwhile, one of India’s original
“garage” start-ups, is
giving all three a run for their money.
Ireland is among countries which need to move
beyond comfort food spin and fairytales; implement significant structural reform
and open its eyes to the challenges that will otherwise engulf it.
Applied Materials, one of the world's biggest supplier of machines that make
solar panels and computer chips, whose headquarters is in Santa Clara, in
Silicon Valley, along with Intel's, has transferred its chief technology officer
to China. Applied Materials has opened a research facility in Xi’an - - a city
about 600 miles southwest of Beijing, known for the discovery nearby of
2,200-year-old terra cotta warriors - - which has 47 universities and other
institutions of higher learning, churning out engineers with master’s degrees
who can be hired for $730 a month, according to the New York Times.
"There's a lot of evidence that what US companies do in China or India for example, actually has positive effects on the US economy in terms of jobs, research, sales, production, and investment in the United States," Dr. Laura Tyson, S.K. & Angela Chan Professor of Global Management at Berkeley University said to CNBC in Davos. Fred Bergsten, director of the Peterson Institute for International Economics and Sir Martin Sorrell, CEO of WPP also joined the discussion:
General Electric is America's biggest business
conglomerate. In 1892, inventor Thomas Edison's Edison
General Electric Company merged with a competitor, the
Thomson-Houston Company and formed the General Electric
Company. GE was one of the original 12 companies listed
on the newly-formed Dow
Jones Industrial Average in 1896 and is the only
survivor. Jeffrey Immelt is the ninth chairman of GE
and succeeded Jack Welch in 2001.
Last week, President Obama named Jeffrey Immelt to head
his outside panel of economic advisers, replacing former
Federal Reserve chairman Paul Volcker.
Immelt takes charge of the newly renamed President’s
Council on Jobs and Competitiveness, as the economy is
“in a different place” from where it was during
the financial crisis when Volcker was brought on, and
new ideas are needed to keep the momentum going.
On Wednesday, Jeffrey Immelt's GE launched the
Innovation Barometer (pdf), to coincide with the opening of
the World Economic Forum in Davos, Switzerland.
The barometer is based on an independent survey
of 1,000 business executives in
12 countries and it found that
95% of respondents
believe innovation is the main
lever for a more competitive
national economy. But just how
to accomplish that will take a
uniquely 21st century path, as
respondents are prioritizing
technology that addresses local
needs; looking for innovation
from smaller organizations; and
pursuing strategic partnerships
to make tangible innovation
happen. All of these areas are
converging as problems are now
bigger -- which involves a wider
system of players.
Beth Comstock, chief
marketing officer and senior
vice president, GE, said the
study illustrates that the rules
around innovation are changing.
Companies must “embrace a new
innovation paradigm that
promotes collaboration between
all players - - big, small,
public, and private - - fosters
creativity, and emphasizes
solutions that meet local
Comstock, who is a WEF
panelist this year, added that
the results reveal that “the new
face of innovation” has shifted
from “innovations that simply
make money to innovations that
also create good in people’s
lives.” In the survey, more than
three-quarters of executives
(77%) said they believe the
greatest innovations of the 21st
century will be those that help
address human needs, such as
improving health quality or
enhancing energy security, more
than those that simply create
the most profit. They believed
innovation would be a catalyst
for improving multiple areas of
citizens’ lives in the next 10
years, including health quality
(87%), environmental quality
(85%), energy security (82%),
and access to education (81%).
The survey also found that
there is a focus on new players
when it comes to innovating,
with 75% of respondents
saying that the way companies
innovate in the 21st century
will be “totally different” than
the way they innovated in the
past. The same
that more than ever, individuals
and small- to mid-size
enterprises (SMEs) will be as
innovative as large companies.
At the same time, 76%
of executives said that
innovation must be tailored to
local market needs.
In terms of collaborations,
86% said that 21st
century innovation is about
partnerships between several
entities as opposed to the
success of a single
Countries perceived as being the most innovative by
their peers don’t necessarily seem that optimistic about
their own innovation future.
For example, the survey asked executives to name the
three countries they viewed as the leading innovation
champions; the US topped the list with 67%,
followed by Germany (44%), Japan (43%), and China (35%).
Then, the survey explored the degree to which
executives believed innovation would improve the lives
of their countries’ citizens and the likelihood that
that improvement would happen based on current
conditions. Ironically, none of the top four countries
that were considered innovation champions by their peers
were optimistic about the power and prospect of
innovation. Both China and Japan were designated
“pessimists,” while the US and Germany were designated
“traditionalists,” falling in between optimism and
The survey suggests that
paradox may be due to perceived barriers to innovation
in specific countries. For example when asked what would
help their companies to innovate, 56% of
respondents in China cited the need for more financial
support from public authorities. In Japan, 36%
cited the need to work with universities and research
labs for product development.
In the survey, “optimists” were convinced that their
countries’ transformations will be innovation- and
education-driven. More than others, they believe
innovation is about partnerships with public authorities
and universities - - and about tapping into the creativity
of individuals and small- and medium- sized businesses.
For example, when comparing the results from optimists
such as Brazil to the global results, that country sees
a stronger appetite for innovation among its youth and
more positive results from public-private partnerships.
But, there are also challenges, as in Brazil’s case,
there’s a view that it’s harder for companies to
specifically partner with universities for their R&D
Alternatively, the outlook for
“traditionalists” - -
the camp that the US fell into - - is that innovation
has not changed that much and is mainly driven by hard
science. The view is that innovation is seen as serving
global markets or service needs, but not specifically
“pessimists” see that innovation
serves the common good, but that it’s mainly developed
in large companies. For example, Japan and South Korea,
which fell into the pessimist camp, were less inclined
to find society as a whole taking risks when it comes to
innovation. They also see less support from public
authorities for innovation - - and also see private
investors as staying too much on the sidelines.