Innovation, Adapt to change and Productivity interrelationship in Telecommunications Industry. |
Article Summary |
for Economic Analysis(ECO740) |
Prepared for: ASSOC. PROF. DR. AZIZ SULAIMAN
The Telecommunications industry is currently undergoing changes due to globalization and new technological developments. Links between technologies within the technological system will change over time and affect the structure of the industrial network and firm behavior. Thus, organizations that successfully align service roles with advanced information technology can achieve comparative advantages in the marketplace (Youngdahl and Loomba, 2000).
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Innovation is a continuous process of discovery, learning and application of new technologies
and techniques from many sources. Many of the techniques and processes are cumulative
and interdependent, and the technological capacity of a firm may also be influenced by external factors such as the educational system, the research infrastructure and the functioning of the capital markets.( Someshwar, 2001)
Telecommunications services companies are very dependent on human intellectual capital. Adequate training must be given to new staff so that they possess the right knowledge and skills. The staff must possess the right attitude and develop critical thinking and innovativeness.
Telecommunications’ players need to be innovative and creative in order to be world class Telecommunications providers.
Firms innovate to increase their productivity and profitability, which can occur via reductions in costs, improvements in sales, or a combination of both. The outcome of product innovations should be observable in increased sales and market shares. Process innovation are undertaken mainly to reduce production costs but often also pursue other objectives such as better service to customers, more flexible production, reduce pollution, satisfy safety norms and other regulations (Petr Hanel, 2008)
Harris’ (1999) literature survey identifies three key productivity drivers: investment in machinery and equipment; human capital; and openness to trade an investment, all within an overall framework where innovation creates the opportunities for growth. Through innovation, Malaysia had increased in level of productivity. In 2010, Malaysia registered the highest productivity growth of 5.8% compared with Organization of Economic Cooperation and Development (OECD) countries, like Republic of Korea (4.9%), Japan (4.1%), Sweden (4.4%) Germany (3.5%), USA (2.7%) and Finland (2.7%). The average productivity growth of the OECD countries was 2.8% in 2010. During the period of 2001-2010, the growth in TFP was 1.5% contributing 32.9% to national economic growth. The result shows that Government efforts to increase the contribution of TFP were effective where creativity, innovation and better management practices as well as higher added value investment contributed significantly towards the growth. (productivity report 2010/2011- MPC)
Industries’ ability adapt to the change make workers to be more innovative
For firms to be innovative, there must be awareness throughout the organisation of the need for innovation. Along with the streamlining of operations and processes to improve product and service delivery, the mindset of employees needs to change. Innovation requires change, and in the business environment, resistance to change is deleterious to organizations. The ability to continuously adapt to change enables firms to achieve sustainable value creation and competitive advantage (Innovation Management Incorporated, 1999).
The people aspect is critical....