The Singapore Commentator

At a roundtable discussion on entrepreneurship education organised by the National University of Singapore Stanford University and University of California, Berkeley yesterday, Acting Minister for Education Tharman Shanmugaratnam said that Asia has entered the knowledge-based economy.

“Growth will be innovation-driven, not efficiency-driven,” he said, adding that the most successful countries are those that “build and sustain vibrant innovation systems”.

While I agree that innovation has become an important source of competitive advantage for businesses, I would disagree with the notion that innovation and efficiency are mutually exclusive factors.

Innovation is more than just about being able to introduce new products or services. Great companies are also able to use innovation to drive operational efficiencies. One often feeds the other.

For example, Dell sells computers. But Dell’s computers are not particularly innovative. What is innovative is Dell’s efficient build-to-order business model that minimises inventories and cost and gives it a competitive advantage.

While innovation has become the latest buzzword in business, let’s not get carried away with it and forget that there are other important factors in achieving business success.