Over the last couple of weeks, I have been using my annual leave to catch up with some long overdue reading.
One of the books that I revisited was the autobiography of Jack Welch, the former CEO of global conglomerate General Electric and someone who is widely acknowledged to be one of the most astute and successful businessmen of the last 100 years.
Obviously, there are many quotable sayings from the great man but one that I think that is pertinent to the challenges facing today’s economy is one he made at a symposium in Boston back in 2006 where he said that although people often think innovation is limited to practical scientific advances, it’s about much more than that. In fact, Welch always believed that to innovate something is as important as inventing it.
In fact, a study from Jack Welch’s old employer GE showed that innovation is a key tool in developing a competitive advantage in a global economy but that businesses do not do that on their own. In fact, increasing collaboration between businesses is seen as a major competitive tool with the main reasons for doing this being access to new technologies and markets. Of course, there are also challenges in working with others including worries about a lack of confidentiality, trust and talent-poaching.
For Welsh firms, this presents a particular challenge, especially given our location on the periphery of Europe, although the relative openness that is found in many innovative companies in Wales could, if developed properly with the right support for global interactions, enable growth in some key sectors such as life sciences and creative industries.
Certainly, greater collaboration with universities, as well as with other companies, could begin to make a real difference to the relative innovativeness of Welsh business.
For creative organisations looking to develop greater opportunities, business leaders are increasingly rejecting the old orthodoxy regarding innovation, namely that the linear model of first creating a product and then continuing to develop it is no longer sufficient. Instead, senior executives are putting increased efforts on better understanding their customers and anticipating the evolutions of new market spaces as the key prerequisites for successful innovation.
Of particular importance to Welsh executives looking to enhance their businesses is the finding that developing these new approaches and models requires courage of conviction, a greater tolerance for risk and a leadership culture willing to think and act dramatically differently.
Another major consideration for the innovative organisation is the development, attraction and retention of talent, especially as improving the creativity and technical prowess of the workforce is seen as key to unlocking innovation potential.
In particular, a better alignment of the education system with business needs remains a top priority for many executives, especially in training individuals with the skills and abilities to unlock the new business environment being created around the world.
For the Welsh Government, there is certainly a challenge to realign its skills policy to ensure that businesses, academia and government can work together to cultivate a more innovative workforce that has the ability to react quickly to changes in the world economy.
There is also a real opportunity for at least one Welsh business school to break out of the traditional model and develop a more entrepreneurial and innovative curriculum that is more in step with the changing needs of business. However, talent is not only developed internally and senior executives also expressed concern that governments, through misplaced immigration policies, are restricting the flow of global talent and thus having a negative impact on the ability of businesses to innovate.
Following Brexit, there is still much to do by the UK Government in ensuring that the best entrepreneurs and innovators make Britain their location of choice for their future careers.
Indeed, the global business community sees a clear role for government as a steward of the innovation ecosystem, and for creating a policy framework that fosters innovation, creates stability and supports robust international trade. However, this can only succeed if we have leaders across government, business and the university sector that are willing to champion innovation across the Welsh economy as well as within their own organisations.
And as Jack Welch famously said, the future “will not belong to ‘managers’ or those who can make the numbers dance. The world will belong to passionate, driven leaders – people who not only have enormous amounts of energy but who can energise those whom they lead”.
Those are the people we need in Wales to drive forward and innovative economy over the next few years.