“Innovation” is currently the most fashionable keyword in Vietnam's young business community. Many Vietnamese companies are investing in R&D departments, but which path of innovation best suits our country's market, people, and potential?
Chinese-style innovation
Henry Ford, the most influential figure in the American automobile industry, once said, “If I had asked consumers, they would only have wanted a faster horse!” Ford’s point was that relying on people’s stated needs would never lead American companies to breakthrough products. That is the American mindset: lead trends and create entirely new products, as Microsoft, Apple, Ford, Google and Facebook have done…
So how are the Chinese innovating as they aspire to overtake the Americans? Jack Ma, head of Alibaba, the world's largest e-commerce group, says: “China is a latecomer; our best approach is ‘micro-innovation.’” Alibaba, Tencent, and Baidu all exemplify this thinking. Tencent's WeChat messaging application, modeled after Viber and WhatsApp, leads the world in user numbers with nearly 400 million—more than twice WhatsApp's and three times Viber's.
They are currently preparing to acquire Dianping.com, a copy of Yelp, the American travel social networking site. Dianping.com has 130 million monthly users, up 186% from last year. According to Bloomberg, Dianping.com is preparing for a US IPO worth around USD 1 billion. Baidu, the “Google of China,” was the first Chinese company to enter the NASDAQ top 100 and holds more than 70% of the online search market in this billion-person country.
They also ranked 5th globally in Alexa's list of the most visited websites in May 2014, demonstrating a strong position. Alibaba, “China's first giant,” is a company modeled after America's eBay. With an early interface, trading methods and concept that were inexplicably similar to eBay's, Alibaba once faced considerable criticism from the Western world.
But today, they are the world’s largest e-commerce company, with total transaction value equal to eBay and Amazon.com combined. Alibaba’s IPO is also among the world’s most anticipated deals, with an estimated value exceeding 100 billion USD.
The most important factor behind Chinese companies' success is the country's highly favorable socioeconomic conditions: 1.3 billion people, rising per-capita income, and government support and protection… Capturing just 10% of the market gives companies 130 million users, a dream figure for U.S. companies.
And Israeli-Style Creativity
Israel, a tiny country with few resources, many enemies and greater pressures on all sides, innovates differently. After decades of research and adaptation to its country's high-risk environment, the Israeli innovation consultancy Systematic Innovative Thinking (SIT) introduced a new concept: creating from existing resources. SIT believes that constraints themselves drive creativity.
Israel has made innovation part of its national culture: it invests more in R&D than any other country, at 4,4% of national spending, compared with 2,5% in the United States. In 2013, only 60 Israeli startups opened offices in New York to seek investment; now that number exceeds 200.
After years of studying existing products, SIT proposed two main principles: “Closed World” and “Thinking order: form before function.” “Closed World” means we should not simply create a new product from nothing, but first use resources already around us to change existing products.
The ‘Form First, Function Later’ principle, by contrast, suggests that businesses first change a product’s shape and then identify new uses for it. SIT offers several tools for applying these principles, mainly by altering and rearranging a product’s components.
These principles are well suited to Israel's circumstances. Israel has very limited natural resources, with nearly 8 million people and more than 50% of its land desert, and a history of devastating wars. Israelis therefore calculate everything carefully to minimize waste. Products must directly meet users' needs to succeed quickly and avoid risks from changes in political and social conditions.
SIT’s two decades of research included analyzing many well-known products, comparing them with competitors, examining why some succeeded and others failed, and identifying the solutions best suited to small and medium-sized companies or projects with limited resources. By 2013, Israel had more than 4,800 startup projects, 70% of which invested in technology.
Many examples of SIT tools and principles are common all around us, such as ATMs, where banks simplify bank employees’ role into a machine with the same functions that is compact and economical, or tablets, where companies simplify and restructure desktop computers and mobile phones to create a new, useful handheld product.
With half its area covered by desert, Israel has used these tools to raise fish and grow crops in the desert, with drip irrigation and heat-sensing systems to ensure adequate watering and limit waste. This system has saved Israel hundreds of millions of USD annually and made it a major produce supplier to Europe; even the Netherlands buys flowers from Israel.
Most recently, Google acquired Israel's social network for drivers, Waze—which shares traffic congestion, restaurants, rest stops, and more—for USD 1.3 billion.
When Israelis and Americans want to change a product, they must answer hundreds of questions about its feasibility, usability and benefits for the company, customers and consumers. To save money and limit risk, Vietnamese businesses can try the Israeli approach: choose a core product, list its components, change their order or quantity, create a new product and identify its new functions and benefits. Be pragmatic and effective like the Israelis: begin innovating with the resources already around us.
Source: http://www.baomoi.com/Sang-tao-kieu-Tau-hay-Israel/76/14342643.epi
