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Singapore, let’s get disruptive

Innovation is the key to whether Singapore surges ahead, or falls behind, in the years to come. How can businesses, organisations and people here reinvent themselves? TODAY kicks off a weekly series featuring advice from global and local innovation gurus.

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Innovation is the key to whether Singapore surges ahead, or falls behind, in the years to come. How can businesses, organisations and people here reinvent themselves? TODAY kicks off a weekly series featuring advice from global and local innovation gurus.

As Singapore companies feel the heat from fast-rising competition, how can disruptive innovation give them that all-crucial edge?

Explaining this in an email Q&A with TODAY is Scott Anthony, Managing Partner of Innosight — the innovation consulting firm co-founded by Harvard Professor Clayton Christensen, one of the world’s foremost business thinkers and the man behind the term “disruptive innovation”.

A widely-published author himself (most recently, of The Little Black Book of Innovation) and adviser to global corporations, Scott relocated from the United States to Singapore in 2010 to tap the booming opportunities for innovation in Asia.

He chairs the investment committee for IDEAS Ventures — which stands for Incubator for Disruptive Enterprise and Start-ups — a S$10-million fund run by Innosight in conjunction with Singapore’s National Research Foundation.

SINGAPORE HAS BEEN CONSISTENTLY RANKED AMONG THE TOP IN THE WORLD IN TERMS OF COMPETITIVENESS AND INNOVATION. BUT IS SOMETHING MISSING IN THE MANNER OF INNOVATION ADOPTED OR WHAT IS BEING ACHIEVED?

Singapore is a remarkable place. It is hard to believe when you live in this ultra-modern city that everything that exists was essentially created over the past five decades. The entire “Singapore Inc” story — the tight relationship between government and business, the focus on efficiency, investments in infrastructure and education — is at its heart an innovation success story.

However, there is something missing. Singaporean companies are great at what we would call sustaining or efficiency-related innovations, which are incremental improvements to existing products and services. But they are less good at managing disruptive innovation, the kind of breakthroughs that reach new customers and create new value networks and markets.

That presents a real challenge today as the pace of change in industries increases.

Companies really need to excel both at optimising today’s business and creating tomorrow’s business. There’s a cultural component to this. Most organisations that are good at disruptive innovation tend to be less hierarchical, more risk tolerant and more open to failing smartly. I think Singapore enterprises would benefit by looking at how innovation-friendly their cultures and organisational structures are.

HOW CAN DISRUPTIVE INNOVATION BE THE KEY FOR A DEVELOPED ECONOMY MUCH LIKE SINGAPORE’S WHICH FACES COMPETITION FROM LOWER-COST COUNTRIES RISING UP THE VALUE CHAIN? HOW CAN ONE BECOME A “DISRUPTIVE INNOVATION ECONOMY”?

There are two reasons why disruptive innovation matters to developed economies. First, countries have to determine how to deal with attackers armed with lower-cost business models. Second, countries have to ensure that they seize the opportunity to master the disruptive innovations that have the potential to create new industries.

I don’t think there are any good examples — yet — of countries that have really mastered disruptive innovation. But certainly you have companies in the region that have created disruptive growth businesses, like Alibaba in China and Airtel in India.

A disruptive innovation economy, in my mind, is one where the big companies either demonstrate the ability to reinvent themselves or they fail in the face of new disruptive attackers. One reason why the US economy has been so resilient is because it does this. IBM successfully transforms and continues to thrive. Kodak doesn’t, and goes bankrupt as Facebook, Instagram and a range of other companies disrupt it.

IF I WERE A BUSINESS OR ORGANISATION, WHY SHOULD I BE LOOKING FOR THE DISRUPTIVE INNOVATION ADVANTAGE? WHERE SHOULD I START LOOKING FOR ONE? AND WHAT, MOST FUNDAMENTALLY, DO I NEED TO KNOW IN ORDER TO CAPITALISE SUCCESSFULLY ON IT?

The disruptive innovation advantage is critical for both defensive and offensive purposes. On defence, history shows that disruptive innovation is the mechanism by which great companies fail. Leaders ignore or under-invest in disruptive innovation at their peril.

On the more positive side, disruptive innovation is the mechanism by which new markets are created and consumption increases. Organisations looking for new paths to growth, or to find ways to create new value for their customers, should embrace disruptive innovation.

The No 1 way to spot an opportunity is to look for circumstances where solving a problem is complicated, expensive or can only occur in fixed locations. Simplicity, affordability and accessibility are the hallmarks of disruptive innovation.

Leaders inside established organisations need to recognise that often, the greatest enemy lies within. Organisations are built to sustain today’s model, not create tomorrow’s. Established companies can master disruptive innovation, but it requires careful and active leadership.

HELP US VISUALISE HOW DISRUPTIVE INNOVATION APPLIES NOT JUST IN THE BUSINESS WORLD — BUT ALSO IN FIELDS AS WIDE-RANGING AS EDUCATION, SCIENCE, HEALTHCARE, GOVERNMENT SECTOR, SO ON.

The notion of disruptive innovation is transforming existing industries or creating new ones by making it easier and simpler for people to solve the problems they are facing in their lives.

In education, that could mean accessing material online rather than dealing with the inconvenience of going to a centralised location. Certainly, massive online open courses (MOOCs) like Coursera or edX is a move in this direction.

In healthcare, that could mean receiving basic care in a pharmacy instead of having to go see a doctor, or even using “smart” devices and mobile phone applications to enable self-care. In government, it could mean allowing citizens to access government services online, or even having people self-manage problems.

SINGAPORE, LIKE AMERICA, IS UNDERTAKING A FUNDAMENTAL REVIEW OF ITS EDUCATION SYSTEM. THOUGH BOTH HAVE WIDELY DIVERGENT MODELS, WHAT WOULD YOU SAY ARE SOME KEY PRINCIPLES TO TAKE AWAY ABOUT INNOVATING IN EDUCATION TODAY?

There are three common themes one sees in education. The first is there is a mismatch between the way most primary and secondary schools teach and what students truly need. Everyone learns differently, but everyone is taught the same way. Technology can help to address this problem, ensuring that the right material is taught to students at the right time in the right way.

The second is that we need to be careful of how we teach and measure students.

Today’s world changes so quickly that we need citizens that are creative, flexible, collaborative problem solvers. When we measure entirely on rote memorisation, we teach people how to be uncreative, inflexible and individual problem solvers.

The third is that higher education is on the verge of true transformation. There always will be a select number of schools that provide truly world-class education, where students attend those schools partially for the credential they receive and partially for the experience of being on campus. But the Internet is just a more cost- effective way to teach people specific skills. In the US, a whole class of universities might find their basic business model untenable in the future.

HOW PIVOTAL HAS THE INTERNET AND CROWD-SOURCING/OPEN SOURCE COLLABORATION BEEN TO TRANSFORMING THE NATURE OF INNOVATION? WHAT ARE THE IMPLICATIONS FOR GOVERNMENTS, ECONOMIES, COMPANIES, SOCIETY?

Anytime anyone studies where innovative ideas come from, they find that the most powerful ideas occur at intersections, where different disciplines and mindsets collide. The Internet and open source collaboration makes it ever easier for these intersections to occur, which spurs more breakthrough thinking.

Further, in a connected society ideas can spread in the blink of an eye. The implications of these shifts are very profound. It is at least one driver of a view advanced by our colleague Professor Rita McGrath, who argues that we are in a world where competitive advantage is an increasingly transitory notion. It also means that governments and companies have to be very good at quickly sensing and reacting to developments.

WHAT IS THE NEXT GREAT DISRUPTIVE TECHNOLOGY OR TREND — 3D PRINTING, SOMETHING ELSE?

There are three broad trends that I am watching. 3D printing is certainly one of them. Anyone who manufactures something should be thinking of the implications of the ability to quickly and cheaply create customised solutions in decentralised locations.

A second big trend is more scientific approaches to decision-making (what some might call “big data”). The ability to gather information, process that information and make decisions will enable all sorts of new markets and applications.

The third is machine-to-machine communication. As wireless technologies continue to increase in ubiquity and the cost of sensors goes down, we will see everything from truly smart homes to driverless cars.

One industry interestingly that sits in the intersections of all of these changes is healthcare.

In the next decade, I think we are going to see some phenomenal new disruptive business models in that industry. I hope some of them are born in Singapore!

Follow Scott Anthony on Twitter at @ScottDAnthony. More about Innosight at http://www.innosight.com

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