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Significance of developing innovation strategy for business growth

Mohammad Ashraful Islam Khan | March 30, 2023 00:00:00

A worker at a textile factory in Dhaka —Collected Photo

In today's rapidly evolving business landscape, achieving success requires consideration of multiple factors. Among these, the importance of innovation strategy cannot be overstated. In essence, an innovative strategy is a deliberate plan implemented by businesses, organisations, and brands to optimise the development and delivery of their products and services. This is especially critical for companies seeking to gain a competitive edge in their respective industries, a trend that is becoming increasingly prevalent in Bangladesh's telecom, FMCG sector etc.

The world's leading and most innovative organisations recognise the value of a well-defined innovation strategy. According to a Harvard Business Review article, without an innovation strategy, innovation improvement efforts can easily become a grab bag of much-touted best practices. Furthermore, without a cohesive innovation strategy, different departments within an organisation may inadvertently pursue conflicting goals, even in the presence of a clearly articulated business strategy.

Business innovation strategy has become a cornerstone of success for organisations worldwide. The approach to innovation strategy can vary greatly, depending on the cultural, economic, and regulatory context of different regions. For example, in Silicon Valley, a hotbed of technological innovation, the focus tends to be on disruption and rapidly scaling innovative ideas. In contrast, in Europe, innovation is often more incremental, with a focus on refining and improving existing products and services.

One example of a big company that practises an innovation strategy that can be followed by all is Google. Google has a well-established culture of innovation, with a dedicated team of engineers and designers constantly working to create new and innovative products and services. Google also embraces a "fail fast" philosophy, which means that they encourage employees to take risks and try new things, even if they may not succeed.

In emerging markets such as India and China, innovation strategies are often centred around frugal innovation, finding ways to deliver affordable products and services to a large population with limited resources. Meanwhile, in Japan, innovation is often a collaborative effort between companies, government, and academia, known as "Open Innovation."

Despite these differences, successful innovation strategies share some common elements, such as willingness to experiment, focus on customer needs, and a culture that values creativity and risk-taking. As the global business landscape continues to evolve, organisations will need to adapt their innovation strategies to remain competitive and relevant in their respective markets.

Bangladesh's business landscape has witnessed a growing emphasis on adopting innovative strategies to gain a competitive edge in recent years. Companies across various industries, including telecom and FMCG, have recognised the need to incorporate innovation into their business strategies. This has manifested in different ways, such as offering new products and services, improving existing ones, and streamlining processes for better efficiency.

There are indications that these efforts are yielding positive results. For instance, some telecom companies have introduced innovative services such as mobile financial services, which have garnered significant uptake. In the FMCG sector, some companies have launched new products that have suited the consumers well, resulting in increased market share.

Business model innovation is a critical aspect of innovation that involves the transformation of business operations, as exemplified by disruptive companies like Uber and Pathao. These companies have significantly changed the landscape of transportation services to the point where traditional taxi cabs have become a rare sight in many cities. This underscores the profound impact that business model innovation can have on established industries and the broader economy.

However, there is still room for improvement. The regulatory environment in Bangladesh can be challenging for businesses looking to innovate, with lengthy bureaucratic processes and unclear policies hindering progress. Additionally, there is a need for greater investment in research and development to fuel innovation.

Overall, while there are signs that businesses in Bangladesh are making progress in adopting innovative strategies, there is still much work to be done to unlock their full potential. Berger Bangladesh, a leading paint manufacturer in the country, has been actively incorporating innovative strategies into its operations to maintain its market leadership position. One of the ways Berger Bangladesh has introduced innovative products is by leveraging technology. For example, the company has developed a colour-matching app that enables customers to find the perfect shade of paint for their needs. Berger Bangladesh's focus on innovation has enabled it to remain competitive in the market and cater to evolving customer needs. Unilever Bangladesh is incorporating innovation into its operations by investing in sustainable practices. The company has launched several initiatives focused on reducing its environmental footprint, such as using renewable energy sources and reducing plastic waste. Unilever Bangladesh, a leading consumer goods company in the country, has also launched innovative products, such as its Lifebuoy handwashing station, which enables communities without access to clean water to maintain proper hand hygiene.

The textile sector in Bangladesh has also been adopting innovative strategies to remain competitive in the global market. One way textile companies are introducing innovative products is by using sustainable materials and manufacturing practices. For instance, some companies are incorporating recycled fibers into their products, or using eco-friendly dyeing techniques that reduce water usage and chemical waste.

In addition, textile companies in Bangladesh are incorporating innovative technologies into their operations. For example, some companies are using automation and artificial intelligence to improve efficiency and productivity. Others are using 3D printing technology to create new designs and prototypes. Textile companies in Bangladesh are also collaborating with international brands and designers to introduce new products and designs. This has enabled them to access new markets and gain exposure to global trends.

The government of Bangladesh has been taking various initiatives to promote innovation and entrepreneurship in the country. One of the key initiatives is the establishment of "Innovation Design and Entrepreneurship Academy" (iDEA), which provides support to startups and entrepreneurs through mentorship, training, and funding opportunities.

The government has also launched the "Digital Bangladesh" initiative, which aims to transform the country into a knowledge-based society by leveraging technology and innovation. Under this initiative, the government has been promoting the use of digital technologies in various sectors, including education, healthcare, and governance.

In addition, the government has established several incubation centres and technology parks to support the growth of startups and innovation. These centres provide access to resources such as funding, mentorship, and infrastructure to help startups develop and grow.

The government has also introduced various policies and programmes to promote innovation and entrepreneurship in specific sectors such as agriculture, ICT, and renewable energy. For example, the "Agro-Processing Policy" aims to promote innovation in the agriculture sector by encouraging the development of value-added products and services.

Overall, the government has been taking significant steps to promote innovation and entrepreneurship in the country. By providing support to startups and entrepreneurs, promoting the use of digital technologies, and establishing incubation centres and technology parks, the government is creating an environment that fosters innovation and supports the growth of the economy.

Private sector in Bangladesh faces several challenges in implementing innovative strategies. One of the key challenges is a lack of access to finance, particularly for startups and small and medium enterprises (SMEs). Many businesses struggle to obtain the necessary funding to invest in research and development or to scale their operations.

Another challenge is a lack of skilled human resource, particularly in the areas of science, technology, engineering, and mathematics (STEM). This shortage of skilled workers can limit a business's ability to develop and implement innovative strategies. Additionally, the business environment in Bangladesh can be complex and bureaucratic, with regulations and procedures that can be difficult for businesses to navigate. This may lead to delays in implementing innovative strategies or obtaining necessary approvals.

While the private sector in Bangladesh is making strides towards innovation, there are still significant challenges that need to be addressed in order to fully leverage the potential of innovation to drive economic growth and development.

Foreign direct investment (FDI) can play an important role in promoting innovation and entrepreneurship in Bangladesh. FDI can bring in new technologies, knowledge, and expertise, as well as provide access to larger markets and sources of capital. This can help local businesses to improve competitiveness and expand their operations.

Over the years, Bangladesh has been successful in attracting FDI in a number of sectors, including garments, textiles, and information technology. In recent years, the government has also been taking steps to further encourage FDI, such as through simplifying procedures for obtaining investment licenses and reducing bureaucratic red tape.

However, there are still challenges to attracting FDI to Bangladesh, including issues related to infrastructure, political stability, and labour productivity. In addition, the COVID-19 pandemic has had a significant impact on global investment flows, with many investors becoming more cautious and risk-averse.

Despite these challenges, there is significant potential for FDI to contribute to the growth of innovation and entrepreneurship in Bangladesh. By continuing to improve the investment climate and addressing the challenges that investors face, Bangladesh can attract more FDI and help local businesses to realise their full potential.

Innovation is crucial for the development and progress of society, as it drives economic growth, creates jobs, and solves social challenges. Innovation involves the creation and implementation of new ideas, products, and processes that add value to society.

Innovation is especially important for future generations, as it creates a foundation for sustained economic growth and development. By encouraging innovation today, we can help to ensure that future generations have access to new and improved technologies, better healthcare, and more efficient and sustainable ways of living.

The writer is an enthusiastic management consultant with a keen interest in growth strategy, operations optimization, fintech, and supply chain.

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