Innovation does not mean R&D

True, we are now operating in a knowledge economy. That is, an economy where the central source of value is knowledge: a world where the one who has the most knowledge and produces the most number of innovations will be the winner of the day. However, I find it naïve to think that a country such as the Philippines should adopt a strong R&D position as its main strategy. An effective R&D strategy requires a lot of resources to be successful. Aside from that, R&D is but a small part in the whole process of innovation. Does the Philippines have the necessary resources to fund such a costly strategy? I don’t have any data on that, but I would be surprised if it did.

Don’t get me wrong. I’m not saying the Philippines should just give up in the race to get ahead. Certainly not! While I’ve been constantly disappointed by my country, I’ve not yet lost my sense of patriotism. All I am saying is that we should realise that knowledge generation is not monopolised by R&D. Knowledge is richer, more relevant, and perhaps even significantly cheaper when it is obtained from business relationships, be it relationships with suppliers, customers, and even competitors. In the Global CEO study conducted by IBM in 2006, they found that a great majority of the organisations they surveyed considered business relationships as the most important source of innovation than internal R&D.

That probably shouldn’t be taken to mean that R&D is irrelevant nowadays. More likely, it should be interpreted to mean that while R&D is still relevant especially in providing new technological advantages to organisations, business relationships are better at providing incremental innovations that it can profit from at a sooner time and with less resources. In short, before the Philippines thinks about using the big guns (i.e. R&D) of the knowledge economy, we should probably think about increasing our capabilities/capacities first.

Using the basics (i.e. strong, healthy business relationships) can help us do that.

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Filed under Innovation, Knowledge Management

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