Local enterprises will have no choice but to embrace innovation in response to cut-throat global competition and unfavorable macroeconomic sentiment, a management specialist said yesterday.
"How can we survive in the 21st century in [relation] to the rising powers, especially China's economy? The key word is `innovation,'" said Kenichi Ohmae, a professor at the University of California in Los Angeles and a consultant who has written more than 100 books, mainly focusing on business and sociopolitical analyses.
Ohmae was addressing a forum held by the Chinese-language Commonwealth magazine and IBM Taiwan in Taipei yesterday.
Ohmae said Japan's success did not come without challenges.
Japanese industry has been hit by patent and other lawsuits filed by the US in the past 20 years. The strength of the yen has also made Japan's workforce one of the most expensive, he said.
The hurdles prompted Japanese firms to turn to innovation because copying Western technology and restricting areas of expertise were not sustainable, Ohmae said.
Therefore, Taiwanese companies had to have "fast-forward" thinking and pay attention to the number of fast-growing companies around the world, he said.
"These firms might be [of] a smaller scale today, but we should study their services and products to see why they are able to achieve impressive annual growth of 10,000 percent," said Ohmae, who was selected by The Economist magazine in 1994 as one of the world's five management gurus.
The evolving changes in technology have also impacted on traditional industries and chief executives thus must be visionary in leading their companies to ride the technology wave, he said.
Ohmae said Taiwanese have proven management records.
However, he said, local firms must find ways to excel in a global environment of fierce competition.
"How to innovate in terms of products, manufacturing processes and production facilities will be critical in attracting clients to buy from Taiwan, whose costs are higher than India and China," he said.
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