Research suggests that the selection of better projects, the integration of external stakeholders and the implementation of policies of incentive for risk, among other measures, may be good practices for opening new doors.
In recent times, innovation and adaptation to new technologies have become crucial for companies. While there are certain fears about the consequences this could have, there are also opportunities that have not been explored, despite the possible benefits of modernization.
The study “The micro-foundations of innovation processes in Latin American companies” is based on a survey of 721 companies in Latin America in order to understand how they come up with the processes that lead to new ways of innovating.
Among its main findings, the study showed that “Latin American companies manage their innovation processes with certain similarities to firms in developed countries, especially the United States. (...) Another important, but expected, result was the effect of the practices of foreign multinational companies in transferring innovation processes,” said Juan Pablo Torres, director of the Innovation Observatory of the Economics and Business Faculty of the University of Chile.
“One of the fundamental differences between innovation processes in Latin America and in developed countries is that the processes used to quantify the size of market opportunities are different,” he added.
The study concluded that “when companies manage their innovation processes based on the detection of opportunities and the reconfiguration of their tangible and intangible assets, they are more likely to improve on four objectives related to innovation: the development of new products and services, their returns, market share and diversification.”
Torres indicated that “having formal criteria for selecting the best projects, integrating external stakeholders into the innovation process, implementing incentives or compensation policies that reward not only success but also the risk (or failure) of employees or executives, and processes that enhance employees’ autonomy in favor of projects that benefit the company” are some of the points to emphasize in order to detect opportunities through innovation.
Francisco Pizarro, assistant director of R&D with industry at the Centro de Innovación UC, explained that “the fundamental structures of industry are changing and how they compete is no longer necessarily determined by the size of a company’s fixed assets, but rather by its speed and flexibility in adapting to new business models.”
Going even further, the expert stated that, “today, you innovate or die.”
Of course, he did not ignore the risks. “With the advent of industry 4.0, it is inevitable that some jobs are at risk. (...) Each revolution has opened up opportunities for growth and the development of new businesses, and the creation of new jobs. Companies should consider reconversion and training plans for their workforce, and adjust recruitment profiles in line with the new challenges,” said Pizarro.
To find out about investment opportunities in Chile, see this article.
Source: Diario Financiero