Understanding Innovation and How It Drives Excellence

By Prof. Dato' Dr. Zulfigar Yasin

September 2023 COVER STORY
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BACK IN THE 1970S, if I wanted to communicate with my pen pal in Manchester—a monthly labour of love—I proceeded to the Gelugor Post Office with a letter in hand and queued at the counter. Having purchased my stamps, I stuck them on the envelope, and the letter was ready to travel to England. There were red pillar boxes outside with an open slit—officiously labelled “Local” and “Overseas” into which I carefully deposited my white envelope on whose front was written the postal address of the recipient accompanied, in careful print, by the order “By Air Mail”. It would take 10 to 14 days before Michele would receive it. Patience is a virtue, I reminded myself.

How communication has changed since then! Today, it has become almost instantaneous!

First came the fax, then the emails, tweets (oops, we have moved to Threads, haven’t we?), and Facebook to expedite immediate response. The latest (I believe, as it is hard to keep up) are apps that communicate by artificial intelligence on your behalf. Innovations in the area of communications have certainly changed the world; though expected, one could not have imagined it means to be so immediate and ubiquitous.

What Is Innovation and How Is It Important?

Innovation is the implementing of new ideas, products, services or processes that significantly alters and solves existing problems. It involves creativity and research. Now, innovation is not limited to ground-breaking inventions; it can also encompass incremental improvements or adaptations that bring positive change.

The importance of innovation lies in its transformative impact on individuals, businesses, industries and society as a whole. Here are some key reasons why innovation is vital to the well-being of all of these:

1. Maintaining competitiveness: Organisations that embrace innovation are better equipped to respond to changing market demands and outperform their competitors.

2. Managing major problems: Complex challenges and wide-ranging and pressing issues, such as climate change, healthcare and poverty, by definition, are hard to solve, and call for innovative means to be mitigated.

3. Enhancing efficiency and productivity: Streamlining operations, reducing costs and enhancing productivity allow businesses to achieve higher levels of efficiency.

4. Growing a sustainability mindset: Adopting renewable energy, waste reduction practices and the use of eco-friendly products are necessary for creating a greener and more environment-conscious future.

5. Improving general quality of life: Innovations in healthcare, education and technology provide better access to essential services and enhance overall well-being.

6. Exploring new frontiers: Innovation pushes the boundaries of human knowledge, opening doors to new possibilities in various fields, including space exploration, artificial intelligence and biotechnology.

7. Achieving social progress: Innovation can empower marginalised communities, improve access to education and healthcare, and promote inclusivity and diversity.

8. Encouraging a culture of creativity: The innovation process, over time, helps to build a culture of continuous learning and constant improvement.

Innovations and Its Revolutions

We have seen how one technological innovation can spur subsequent innovations that cascade into new industries. The First Industrial Revolution, which started in the mid-18th century, known as the mechanisation revolution, was ignited by steam power and mechanisation. This era saw a momentous shift from manual labour to machine-based processes.

The Second Industrial Revolution (mid-19th century to the early 20th century), aptly termed the automation revolution, unfolded with the widespread use of electricity and the development of assembly lines and mass production techniques. This transformative period ushered in heightened productivity and efficiency in manufacturing, changing the face of industries forever.

The computer revolution marks the Third Industrial Revolution, sparked by the emergence of computers and automation technologies. It was then that the power of digital technology was harnessed and integrated into industrial processes. The result was improved precision, control and communication, and these drove industries towards new heights of excellence.

And now, we are in the midst of the Fourth Industrial Revolution, better known as Industry 4.0. It is characterised by advanced digitalisation and seamless industrial manufacturing and logistics integration. Industry 4.0 employs cutting-edge technologies like the Internet of Things (IoT), artificial intelligence (AI), big data and robotics to create smart factories and supply chains. These interconnected, automated and data-driven systems enable real-time decision-making, and enhance the efficiency and customisation of manufacturing and supply chain management.

The impact of Industry 4.0 goes far beyond individual factories; it holds the potential to revolutionise supply chain management by opening up new avenues in procurement, production, inventory management and retailing. The result? More agile, adaptable and responsive supply chains to elevate overall efficiency and customer satisfaction.

Innovations Lead To Excellence

Embracing and investing in innovation are key strategies for businesses aiming to maintain excellence in their respective fields. We see this in many cutting-edge industries. Innovations in the energy sector, particularly in renewable energy technologies like solar and wind power, have significantly contributed to sustainability and environmental responsibility. Companies and countries investing in renewable energy sources have reduced their carbon footprints and reliance on fossil fuels. This transition towards clean energy has positively impacted the environment and positioned them as leaders in the global energy landscape.

Space exploration companies like SpaceX have materialised the concept of reusable rockets, revolutionising the several-decades-old space industry. Reusability significantly reduces the cost of launching payloads into space, making space exploration economically viable. This innovation has set new standards in the aerospace industry, leading to excellence in space missions and a rapid increase in commercial satellite launches.

On the education front, communication technologies and the internet have led to the democratisation of knowledge. We see quality education being more widespread and available. In Brazil, educational technology (EdTech) companies like Descomplica have emerged to provide online educational resources and tutoring services to students, bridging gaps in access to quality education, especially in remote areas.

Closer to home, we all know Grab—a ride-hailing and on-demand transportation service founded in Malaysia. It has expanded its services beyond ride-hailing to include food and parcel delivery, along with financial services. Grab has become a leading super app in Southeast Asia, providing convenient and accessible services to millions of users across the region.

Innovation Roadblocks

The examples given may enthuse the reader. Still, in business and industry, the pursuit of innovation is a constant challenge; numerous barriers stand in the way.

Among these barriers, financial constraints loom large. Limited access to funding and soaring research and development costs can be daunting, especially for small-medium-sized enterprises (SMEs). In the services sector, the impact of financial barriers is palpable, stifling the potential for ground-breaking advancements.

Beyond financial hurdles, organisational culture and climate shape a company’s innovative spirit. One study [1] sheds light on the pivotal significance of a constructive culture in the adoption of evidence-based practices (EBP). In contrast, organisations plagued by a poor corporate climate exhibit a disconnect between prevailing practices and the willingness to embrace EBP.

The landscape of innovation is further influenced by market and policy obstacles. A recent study underscored the impact of market barriers, which encompass cost and knowledge barriers, inhibiting innovation investment and outcomes. Concurrently, stringent regulations or a lack of supportive policies exacerbate the challenges faced by those seeking to innovate.

Organisations must also grapple with internal factors that either enable or impede innovation. We now realise that the green market orientation and absorptive capacity of a company are vital to green innovation. While green market orientation bolsters green product innovation, green absorptive capacity enhances both green product and process innovation. A company’s internal dynamics significantly impact its ability to drive innovation.

Other barriers to innovation include risk aversion, employee resistance and limited technological knowledge. To overcome these multifaceted barriers and foster a culture of innovation, organisations must address their specific challenges head-on. Tailored strategies and a supportive environment are essential to empower businesses to break through barriers and unleash their innovative potential.

For innovations to be accepted, it is best to view them through the eye of the user and identify the role or contribution it plays in the larger picture. All these are precursors to forming a culture of excellence, one that is, fortunately, contagious.

Repositioning Penang For Excellence

Developing economies, such as Penang, face unique opportunities and challenges when it comes to harnessing the potential of 21st-century innovations. Excelling in this rapidly evolving landscape requires several bold strategies.

At the forefront of it all would be to embrace digital transformation. By prioritising digital infrastructure and promoting widespread internet connectivity and digital literacy, developing economies can participate in the global digital economy, access new markets and enhance overall efficiency.

Then comes investment in education and skills development. By nurturing a skilled workforce through education and vocational training (TVET) in technical, digital and entrepreneurial skills, individuals can better participate in the job market and become innovators themselves (read more in the Penang Monthly January 2023 issue).

This goes hand-in-hand with creating and nurturing a skilled workforce through industry-academia collaboration and sometimes even education reform. Attracting talent may involve competitive compensation and benefits, and I believe residing in Penang may stand as an attractive prospect for someone seeking to achieve work-life balance.

At this juncture, we can then foster innovative ecosystems to support new ideas and technologies. Governments, companies and universities can play a role by supporting research and development, providing funding and opportunities for start-ups, and implementing supportive policies. This symbiosis will encourage homegrown innovation and technology adoption.

As these entities buckle down to prioritise sustainable technologies, we can, as a developing economy, leapfrog traditional practices and adopt renewable energy, green transportation and resource-efficient methods.

We have seen that fostering entrepreneurship and supporting start-ups can drive innovation, job creation and economic diversification. Developing economies can nurture a thriving entrepreneurial ecosystem by providing access to funding, reducing bureaucratic barriers, and offering mentorship and support.

In fact, Penang has the potential to be the regional hub—building on its assets and showcasing innovative projects and carefully considered branding. Let us take the development of the fisheries and maritime industries here as an example. Consider this:

1. Penang lies at the entrance to the busiest shipping lane in the world—the Straits of Malacca.

2. Three of the most prominent maritime research facilities for fisheries are located here—the Centre for Marine and Coastal Studies (CEMACS, Universiti Sains Malaysia), the oldest marine research centre for Malaysia, the WorldFish Center (a renowned non-profit international organisation) and the Fisheries Research Institute (the research arm for the Department of Fisheries Malaysia).

3. The largest aquaculture complex in the nation is in Penang (next to the second bridge).

4. The public interest and support for the industry is huge. Malaysia’s per capita seafood consumption is among the highest in the world.

5. New innovations in biodiversity conservation and food security, such as the creation of the urban Middle Bank Marine Sanctuary, draw focus to the sustainable development of a climate-resilient future here.

6. Penang has already successfully strategised, positioned and identified herself as a World Heritage Site steeped in maritime tradition.

Carefully considered and planned right, Penang can be the future crucible for maritime innovations. After all, as a fuzzy-haired scientist once said: “The true sign of intelligence is not knowledge but imagination.” - Albert Einstein.


[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1712666/

Prof. Dato' Dr. Zulfigar Yasin

is a marine environmental scientist who is an Honourable Professor at Universiti Sains Malaysia and a visiting senior analyst at Penang Institute. His work now focuses on the sustainable development of the marine environment.