Chindia, Business Innovation Models & Western Enterprises

Strategic advantage should be viewed in dynamic terms as opposed to static terms wrote,M/sJohn Hagel & John Seely Brown. They argued that while traditionally strategic advantage was based on geographic distance or core competencies(typically static),increasingly the only sustainable edge has to do with the capacity to accelerate capability building.We recently covered Bweek's Chindia perspective. John Hagel adds his perspective on this issue - as a regular following the developments in this region - his views carry a special value - Here he rightly points out that three powerful forms of business innovation - open distribution, lean manufacturing & open production are propelling the economic growth of India and China. Lean process management – is heavily inspired by Toyota’s management innovations - Indian companies are applying these management techniques to rapidly improve the performance of a broad range of administrative business processes. He recommends that the western companies learn these techniques in their administrative business processes, or outsource and offshore these business processes to Indian companies who are mastering these techniques.
The two other forms of business innovation emerging in India and China – open distribution and open production - are largely being pioneered within these countries - they are not inspired by management practices in other countries. Open distribution innovation focuses on customer facing business operations while open production concentrates on product development and manufacturing activities. These related share some basic principles - incremental innovation, modular design, focus on both product & process and third party mobildation to aggressively roll out amongst others.
Western companies would do well to study, understand and, wherever possible, adopt these business innovations in their own companies. To some extent, these management techniques can be accessed through outsourcing relationships, but these innovations span the full scope of a company’s operations. As we covered earlier,western enterprises not participating in the mass-market segment of emerging economies, are clearly missing out on opportunities to develop the capabilities needed to compete back home & globally. This is amongst Asia's contribution to the world at large - in a flat world - these matter a lot more.

Category :Globalisation, Asia, Innovation.