Mapping APEC's Innovation Strategy
Innovation is the specific instrument of entrepreneurship... the act that endows resources with a new capacity to create wealth.
To some people, the game of soccer seems pretty straightforward: You run, you pass the ball, you kick, and then you try to score a goal. But any World Cup aficionado knows that the game is a lot more complex. Team managers define tactical game plans and team players react on the fly to ever changing environments. Teams that can accomplish these things usually do well and emerge as champions.
Granted, strategising to win in a soccer game is far less complicated than devising ways to create innovation; yet the elements in the game - planning, adapting and cooperating - provide the basic tenets of what is needed to foster an innovative Asia-Pacific.
In a way not too different, APEC is a forum in which members plan, adapt and cooperate to champion knowledge-based economies. APEC is approaching the art of innovation tactically with a solid game plan - a plan that supports knowledge work productivity (education, intellectual property protection and ICT infrastructure) and one that brings governments and businesses closer together (public-private partnership). In effect, APEC is making success in innovation less of a hit-or-miss affair and more of a sure-win situation.
Throughout the 1990s, when the term 'knowledge-based economy' was the buzzword of the time, APEC adopted a narrative of development that puts entrepreneurs and technological change right at the heart of economies and economic growth. This year, with Japan serving as host economy, the same idea of how innovation and knowledge is central to the region's prosperity is enshrined in the new APEC Growth Strategy.
That's why today part of APEC's innovation plan is squarely focused on empowering the region's small and medium enterprises (SMEs) and its entrepreneurs, building their capacity to engage in international trade, and encouraging them to fully exploit technological changes. It is widely known that these small enterprises and the entrepreneurs who run them represent the bulk of all businesses in the Asia-Pacific.
Anne Pigeon, Senior Policy Advisor at Industry Canada notes that while the percentage of innovative SMEs (those that contribute to a knowledge-based economy) is significantly smaller than the average number of foundation SMEs (those that contribute to a traditional economy), the former account for nearly half of the jobs created. "They [innovative SMEs] really punch above their weight," says Pigeon.
For this reason, supporting and helping to develop small innovative firms in high-productivity industries such as information technology, biotechnology and green ICT is important for the region and for future growth. Indeed, bolstering these dynamic innovative firms stands as an integral part of APEC's priority to ensure that growth in the Asia-Pacific is not only innovative, but also balanced, inclusive, sustainable and secure.
So far, APEC has been working hard to foster innovation and advance the innovative growth agenda. Numerous APEC-funded projects on promoting innovation systems, boosting ICT infrastructure, and cultivating human resource and skills development have been undertaken.
For instance, in terms of ICT infrastructure, APEC has - between 2000 and 2005 - helped triple internet access throughout the region and is now working towards guaranteeing universal access to broadband by 2015. Essentially, APEC is taking big steps to transform the region into an Asia-Pacific Information Society.
To help members make the necessary changes domestically, APEC has developed a "Digital Prosperity Checklist" which outlines specific actions economies can take to use ICTs as catalysts for economic growth and development. These actions cover enhancing ICT-related infrastructure, investment, innovation, intellectual capital, information flows, and integration. What this means is that APEC is helping less industrialised economies and small companies with innovative ideas to achieve long-term competitiveness.
More recently, in July 2010, APEC launched a groundbreaking Cross-border Privacy Enforcement Arrangement (CPEA) to enable greater regional cooperation on data privacy law enforcement. This will make cross-border flows of personal information more secure and accessible, thus protecting consumers and facilitating e-commerce.
"There is a 'knowledge revolution' going on today," said Cher Wang, Chair of HTC Corporation (known widely for their high-tech smartphones), at an APEC Business Advisory Council (ABAC) Knowledge-Based Growth Symposium held in Chinese Taipei in May. During the Symposium government officials, academics and prominent business leaders like Wang considered new trends in innovation and technology.
In her presentation, Wang emphasised that new ICT technologies are a key component of knowledge-based growth. She outlined its myriad benefits and highlighted the example of energy conservation as one of ICT's many advantages. Specifically, through the use of internet-enabled smart grids and smart utility meters, more efficient planning and management of power distribution will follow, and as a result energy intensity can be lowered, she added.
Taking the ICT agenda another step forward, Peter Barnes, President of Censiomax Inc., an IT business consultancy, highlighted a new independent ICT study commissioned by ABAC. This broad-based study will provide an up-to-date overview of ICT access and availability in the APEC region and extract best practice examples for economies to work towards. The preliminary findings of the study will be discussed at ABAC's upcoming meeting in Bangkok, Thailand in August.
Barnes noted that the study is predicated on the view that high costs are a barrier for some small companies to fully utilise ICTs and also that some economies' ICT policies may not adequately address the needs of these companies. His solution is simple: "Build the infrastructure; make it affordable, and the ICT applications, IT education and skills training will follow."
At its core, the study seeks to not only raise output, but importantly ensure that everyone across the board has the opportunity to thrive in a globalised market economy. In a digital age, this is becoming an increasingly common reality as innovation levels off the playing field and a greater number of firms with innovative ideas get into the global value chain.
"Match education output with industry needs; develop ICT and professional competencies; and instil a self-study approach and lifelong learning." These are some of the recommendations of Fauziah Talib, Managing Partner of IQ-Quest Company, an SME based in Brunei Darussalam. Her views and those of her colleagues will be conveyed to APEC Leaders at the year-end APEC Economic Leaders' Meeting in Yokohama, Japan.
With collaborative APEC initiatives on the one hand and valuable inputs from the business community on the other, the prospects of making innovation successful in the region are bright.
"Innovation is the specific instrument of entrepreneurship... the act that endows resources with a new capacity to create wealth," says Peter Drucker, the late business scholar. In the same way, as APEC's innovation strategy bolsters small companies and its entrepreneurs, innovation will be the major driver of the region's growth as it leads to new products, increased productivity and a more stable and sustainable future.