Technology and innovation necessary for firm development
Economy in the today world is not separate from other indicators Technology and Innovation has taken the world particularly developed world with the boom and economy has developed in many parts of the world. This is linked to how much value is being added to the product and how much technology transfer is associated to accumulating human capital and growth thus adding value to the economy.
For any firm to grow and develop first and foremost thing to look into is local culture starting from the language to product in its initial phase. This can be best explained by taking into the example Xiaomi a company which started from a small room back in 2009-10. Over the period of 9-10 years period, this company first focused on getting its logo linked to language with specific meanings.
Second, it didn’t only focus on a single device, objective of the company was linked to build and innovate using technology and human capital. This linked to innovation and technology has resulted in 196M devices and appliances of the company connected with over millions of employees in its set-up. During this period devices not only mobile phones, home appliances, computers and other applications are being manufactured along with inter-connection i.e. devices of different type are interconnected to each other while following application.
Pakistani firms don’t have significant contribution to the economy because of rigid policies which leads to tougher market competition in the region. Due to tougher market competition and protectionist policy firms cannot enter into the market
Success of this use of innovative technology has now resulted in Xiaomi Company to come up with camera in the mobile of the quality. This will thus result in getting rid of big devices in the long run.
Third, localization is the key concept for any industry to develop. Localization not only include translating devices for user satisfaction into other languages but also have people from different region in the different parts of the world. This approach of localization helps in building the devices more user compatible and with improved user interface. This has been the concept followed by Xiaomi and because of this Xiaomi has developed into the firm.
Fourth, as a firm it has been observed that for turning a firm into the brand retaining employees is an important strategy. This retaining of employees is through enhanced capacity development programs and making technology and skill transfer part of such programs. Because of this strategy, Xiaomi as a firm has developed itself into a brand and this itself has led to more product development and expanding the network of products across the globe.
Based on above four observations now looking into the firms in Pakistan, it can be observed that firms though have sound strategy and significant business in the region but none of the firm has satisfactory system to follow thus either they are restricted to one product which either have competition in the region or have limited market access. This thus leads firm to grow weak and this thus results in weak economic contribution.
Second, looking into the firm structure in Pakistan because of lack of interest in technology transfer even at local level employees don’t have significant development to foresee their future and growth in the area. This thus leads to quality compromising and therefore products developed suffers because of quality.
Third, Pakistani firms don’t have significant contribution to the economy because of rigid policies which leads to tougher market competition in the region. Due to tougher market competition and protectionist policy firms cannot enter into the market. Due to such rigid policies and monopolistic approach existing market players do come up with strong associations thus not allowing new entrants into the market.
So what needs to be done in this case for a Pakistani firm to learn from this example and how these things will help in improving the doing business ranking of the country.
First and foremost, thing for firms to focus in Pakistan is to discourage the current approach which also include protectionist policy. This will not only open up the market but will also bring in competition leading to innovation in the products. This will thus improve the quality of products leading to growth of the industry and boosting the economy.
Second, the primary focus of the commodity should be made dependent on culture and way of use. Within this the primary focus should be branding of end product and focusing on how market views the product. Within this there comes a primary role for firms and institutes within and outside. Within firm to improve branding there is need to focus on localization approach i.e. how a product can be inculcated into the existing society and how society will respond to it. This approach will help in improving the product and making it more user friendly in the end.
Third, focus of the firm should not be only product in one dimension or a single product. There should be focus on technology and innovation value chain which is possible through opening up of the market leading to business-business integration. Further through this approach there will be the possibility of firm developing new products thus developing bigger connections within the market and with the consumers.
fourth, focus should be on human capital accumulation for which there is need to have strong retention policies. These retention policies should not only include monetary incentives but also equal opportunities for all to develop in terms of skills and capabilities. For this purpose, firm should focus on developing such programs, agendas and schedules that it fits people working in each department. Further this objective can be achieved with the help of technology value chain. Within technology value chain focus should be on transfer of technology to labor working in partner firms respectively.
Thus, in short for firms in Pakistan there is need to discourage protectionist policy, culture and way of usage of products, localization, technology and innovation value chain along with accumulation of human capital in the form of retention policies with the introduction of new programs for capacity development.
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The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.