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Reinventing the wheel for new consumers
By Thomas McGuckin |
April 20, 2013, Saturday
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Print Edition
Print Edition
THE Auto Shanghai 2013, which runs from April 21-29, is probably the highest profile event for the global automotive industry. It has the largest number of exhibitors, the most new model and concept introductions, extensive media coverage and over 800,000 expected visitors.
It's a "major" event in the largest market, where all automotive players are focused and competing for their share. Through all the glitz, glitter and glamour, this event provides a valuable snapshot into each company's innovation prowess and distinguishes those moving forward from those standing still or falling back. Let's stop for a moment and look at the concept of innovation. It is sometimes confused with invention, but the Latin roots of these words clearly make a distinction.
Many times, governments and companies seek significant breakthroughs by looking to their research and development centers for solutions. These are certainly key to discovering new technologies, advanced materials and applications. However, inventions may actually have no value or use, nor deliver results.
China, which is confronting issues such as pollution, congestion, and per-capita income differentials, recognizes the profound impact innovation can have on society and has made it a high priority.
Successful companies innovate continuously, relentlessly. It's the culmination of taking calculated risks based on data, ingenuity and governance. Innovation is part of their overall corporate DNA. People are encouraged to try new ideas without fear of failure. Equally important, there is a governance mechanism to quickly cut off failed directions and preserve valuable resources. These failed attempts do not diminish the innovative spirit; they actually provide learning and make these companies stronger.
Innovation is not the pursuit of a single stroke of genius, but rather a strategic effort to address a significant issue. Innovation is not reliant on an individual or restricted to those in a lab, but rather a process that harnesses the collective efforts of an organization in a purposeful manner.
Companies without innovation embedded in their corporate souls cannot lead or sometimes even survive. As market conditions and regulatory policies change, those companies struggle to quickly adapt or be resourceful.
Let's apply this thinking to the automotive sector in China, which has experienced remarkable growth in the past decade.
Challenging and competitive
Current indicators suggest that this current decade will be much more challenging and competitive. It is times like these when companies and management teams are tested to see if they can navigate through the uncertainty and volatility to deliver positive performance. Innovation is core to their success, let alone survival.
Often innovation is born out of unique dynamics and necessity. China is certainly fertile ground in this respect. A recent Organization for Economic Cooperation and Development report noted that China will become the largest economy by 2016. This will mark the first time in world history that the largest economy does not also have the highest per-capita income.
This unprecedented situation will have a significant and lasting impact on the automotive industry. For the past 50 years or so, the automotive industry was essentially focused on developing and engineering vehicles and services for those at the top of the global economic ladder. However, with about 85 percent of automotive growth in emerging markets, according to PwC Autofacts forecast, China finds itself in a unique and enviable position.
China has enormous scale to leverage in the design, development, and engineering and financing a product and service solution that meets this lower economic parameter, without sacrificing safety, efficiency and sustainability. Such a solution would unlock enormous value in China and, perhaps, in the new developing and emerging markets.
China also has a unique joint venture structural dynamic that can stoke new ideas, processes, materials and products. Innovation is about constructive collaboration and relies upon diverse areas of expertise along the automotive value chain. Thus, the joint venture format in China provides a very special environment to leverage know-how, develop new solutions and co-invest.
Innovation cannot be attained through imitation. This approach actually hinders advancement, holds back collaboration, creates collateral damage and, most of all, undermines credibility and trust.
These types of activities ultimately do not benefit the company, the consumer or the society because they don't push the edge out, close gaps, build lasting relationships or actually challenge others. Simply stated, innovation creates their future.
It's a "major" event in the largest market, where all automotive players are focused and competing for their share. Through all the glitz, glitter and glamour, this event provides a valuable snapshot into each company's innovation prowess and distinguishes those moving forward from those standing still or falling back. Let's stop for a moment and look at the concept of innovation. It is sometimes confused with invention, but the Latin roots of these words clearly make a distinction.
Many times, governments and companies seek significant breakthroughs by looking to their research and development centers for solutions. These are certainly key to discovering new technologies, advanced materials and applications. However, inventions may actually have no value or use, nor deliver results.
China, which is confronting issues such as pollution, congestion, and per-capita income differentials, recognizes the profound impact innovation can have on society and has made it a high priority.
Successful companies innovate continuously, relentlessly. It's the culmination of taking calculated risks based on data, ingenuity and governance. Innovation is part of their overall corporate DNA. People are encouraged to try new ideas without fear of failure. Equally important, there is a governance mechanism to quickly cut off failed directions and preserve valuable resources. These failed attempts do not diminish the innovative spirit; they actually provide learning and make these companies stronger.
Innovation is not the pursuit of a single stroke of genius, but rather a strategic effort to address a significant issue. Innovation is not reliant on an individual or restricted to those in a lab, but rather a process that harnesses the collective efforts of an organization in a purposeful manner.
Companies without innovation embedded in their corporate souls cannot lead or sometimes even survive. As market conditions and regulatory policies change, those companies struggle to quickly adapt or be resourceful.
Let's apply this thinking to the automotive sector in China, which has experienced remarkable growth in the past decade.
Challenging and competitive
Current indicators suggest that this current decade will be much more challenging and competitive. It is times like these when companies and management teams are tested to see if they can navigate through the uncertainty and volatility to deliver positive performance. Innovation is core to their success, let alone survival.
Often innovation is born out of unique dynamics and necessity. China is certainly fertile ground in this respect. A recent Organization for Economic Cooperation and Development report noted that China will become the largest economy by 2016. This will mark the first time in world history that the largest economy does not also have the highest per-capita income.
This unprecedented situation will have a significant and lasting impact on the automotive industry. For the past 50 years or so, the automotive industry was essentially focused on developing and engineering vehicles and services for those at the top of the global economic ladder. However, with about 85 percent of automotive growth in emerging markets, according to PwC Autofacts forecast, China finds itself in a unique and enviable position.
China has enormous scale to leverage in the design, development, and engineering and financing a product and service solution that meets this lower economic parameter, without sacrificing safety, efficiency and sustainability. Such a solution would unlock enormous value in China and, perhaps, in the new developing and emerging markets.
China also has a unique joint venture structural dynamic that can stoke new ideas, processes, materials and products. Innovation is about constructive collaboration and relies upon diverse areas of expertise along the automotive value chain. Thus, the joint venture format in China provides a very special environment to leverage know-how, develop new solutions and co-invest.
Innovation cannot be attained through imitation. This approach actually hinders advancement, holds back collaboration, creates collateral damage and, most of all, undermines credibility and trust.
These types of activities ultimately do not benefit the company, the consumer or the society because they don't push the edge out, close gaps, build lasting relationships or actually challenge others. Simply stated, innovation creates their future.
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