27 November 2018

Is South East Asia ready for the Fourth Industrial Revolution? – The application of innovation, the Asian way

In the last part of this four-part series on the Fourth Industrial Revolution in South East Asia, I gave an overview of the challenges global companies face in South East Asia.

Now I want to further elaborate my observations on a concrete example and tell you, what companies must keep in mind if they want to adopt solutions in South East Asia and what Frugal has to do with all of this.

Balancing hard and soft issues need equal consideration – future ecosystem considerations

Engineers often fall into the trap of working hard on the facts and often miss the emotive dimensions, the softer conditions that often have as high a level of importance in decision-making. Those that can tap into this growing Asian flair for agility, appreciation, awareness of relationship importance on the ground and creativity to solve unique problems builds the greater connections. Hard facts only go so far.

I think we will see greater alliances and cooperation’s with Asian companies in the future. As the partnership recognition evolves and the needs for building ecosystems become increasingly recognized, the connectedness and the value of human connection, combined with deep domain knowledge will hold equal place in any decision, big or small.

By being more represented on the ground in S E Asia you spot existing patterns habits, structures and processes far quicker to address and find solutions too. You form bonds, deepen relationships. I can’t emphasize this enough.

Avoid Layering

I have seen on countless occasions that tendency to layer on global solutions that mirror other parts of the world and then attempted to simply try to adapt them to many parts of the developing world. Much of the message gets lost as it is too sophisticated for many listening, within developing countries.

Solutions are often proudly shown, even envied but are sometimes failing to connect to the reality of the local situations. I would tend to say German companies have often been guilty of this, over engineering or not relating to the context of another environment. When you are highly conscious of context, then you are listening more astutely and adapting more appropriately. When decisions are made it is as much about specification as it is “our” relationship. If you forget that, so often the order goes to those that built that relationship, investing in time, in personal (human) connectivity.

We need a far more vigorous adaptation of solutions that fit.

Of course, everyone wants the best and sometimes unfettered thinking from outside. This outside-in thinking can really push the best into something breathtaking. You do get that sort of thinking in S E Asia, but it is a real balance to strike and this is where close relationships count and those come from being often, living in the “zone” of understanding to see the connections.

Visitors can help build on vision, those seeking a legacy, based on local and global thinking and this combination effect, so often pays dividends for those taking the time for local understanding. Investing in a network of connections, recognizing personal ambitions and relating in unique ways ‘scores’ heavily in the whole of Asia.

The application of innovation, the Asian way

Over many years exposed to development work, I increasingly relate to applying a greater innovation application. That is on many occasions applying the principles of frugal and reverse innovation more times than not. We do need to build up innovation, don’t impose it top down. Solutions must fit economic and infrastructural necessities. We offer solutions designed in the Western World for developed markets and fail to really rethink them for developing country or we don’t change or adapt the message, we like to stay on “global message” and that can be a real mistake.

Often many of the designers of global solutions, lack local appreciation. Global coordination sometimes does not balance the ‘interplay’ between local and global, it sometimes tends to impose and that can be a real mistake. The more you can build local footprints, and seek to be (highly) adaptive, the closer you get to building a winning design that resonates. Sounds maybe obvious but it so often forgotten in the chase for global presence and ‘universal’ solutions.

I have found often when we look at poorer growth in some of these S E Asia countries, that global solutions are running ahead of market reality. We are fitting solutions that have global perspectives but constrained in the local application. This applies from consumer good to heavy industry solutions, often over-specified, complex in application and maintenance.

Adapting solutions sometimes need a more frugal application

The constraints placed on growth are often spending (wasted) time retrofitting as against applying Frugal Innovation: The Secret Weapon of Emerging Markets. Its aim is to purposely design complex products for adapted solutions. By scaling down complexity and finding a market scale solution, you can accelerate your business for a real ‘market fit’ set of opportunities that are far more achievable than you initially felt. It is recognizing the balance of local needs and global solutions. Frugal innovation has four key attributes— affordability, simplicity, quality, and sustainability.

Even within the Siemens R&D team in China, for instance, they set about the design of a high-end computed tomography (CT scanning) device that’s simple was enough for health professionals who are not doctors to use. Here the thinking was adapted from “frugal innovation and called “industrial design thinking. (Link)

Another example some time back was a medical device that equally benefitted from Siemens taking this frugal approach. A urinalysis machine originally developed through conventional processes was changed, adapted for China. The issue was the Chinese healthcare market craved a much simpler, less expensive piece of equipment. In response, Siemens created a microscope with automatic image processing that could identify solids in the sample. Its technology makes the frugal machine more accurate than chemical analysis done manually.

Frugal innovation is associated with resource-constrained and low-income emerging economies such as those of Africa, India, Asia, and China and given appropriate local resources can accelerate market penetration. We often forget how to push different types of innovation, to adapt to market conditions. If you have no dedicated team you miss many opportunities.

The balance of ‘yin and yang’

Now, all that might be obvious but believe me it is not. It takes hard work to apply local and global together. It is a sort of “yin and yang” of global business, searching for the right balance of industry advancement and seeking out the hard decisions to achieve progress and when you have Industrial Revolution 4.0 knocking on your door, you need to double down on your focus.

In summary of this post.

There are differences in considering how the Fourth Industry Revolution can be applied. Adapting to local needs, building a greater resource on the ground does offer that important key to “accelerating” solutions that do connect, connect locally, built on global expertise. S E Asia has ‘greater’ connecting needs to understand and relate too. Embracing all the facets of Innovation are important to consider so you can extract real value creation work out of embracing the connectivity potential within the Fourth Industrial Revolution

In the third part of this series, I want to provide a perspective on several different business opportunity angles within S. E. Asia that give it a certain uniqueness and many opportunities to chase down. The key message is an adaptation to local needs and considerations is far more important than often realized.

Read the other parts of the series “Is South East Asia ready for the Fourth Industrial Revolution?”:

Part 1: How big is the challenge really?

Part 3: What are the real opportunities to invest in in S E Asia

Part 4: The Roadmap for the Digital Revolution

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