Talent: the first step to innovation?

By Gary Coleman - April 09, 2014

Post WEF LATAMBuilding innovation is one of those hot topics that yield all sorts of discussion about disruptive technology—the cloud, 3-D printing, social media, digital infrastructure, et cetera. But what spurs innovation may come down to something much more basic: talent. And at the World Economic Forum on Latin America  (WEF LATAM) last week, it was clear that participants from this region agree.

Two sessions at WEF LATAM were completely devoted to the topic of talent and it came up often throughout the event, including during the session I participated in, “Innovating for Competiveness.” When the moderator asked a panelist, a minister for information technologies and communications  from Colombia, what three areas he would invest in to build innovation in his country he answered: “Talent, talent, and talent.”

Talent, according to the World Bank, is one of the major challenges to building innovation-driven businesses in the region. There appears to be plenty of entrepreneurship, but of these, very few are innovation-driven—and that’s where the real quality of growth comes from.1 

Many Latin American countries have improved in terms of education over the past decade. Their levels of investment into education and graduation rates are steadily improving.2 But as the President of Costa Rica said in one session on talent, the number of graduates is not so important as what students are graduating in. Are they graduating in engineering, the sciences, the all-important information communications technology fields? And are the institutions that educate students aligned with what job markets really demand? According to The Economist magazine, “Countries with the lowest youth jobless rates have a close relationship between education and work.”3
 
Talent as it relates to innovation also has an impact on competition. For those companies competing for limited talent resources in these markets, having an innovation edge is critical. That’s particularly true with millennials: eighty-nine percent of these in Latin America are strongly influenced by how innovative a company was when deciding if they wanted to work there, says Deloitte’s Millennial Survey. So it’s a virtuous cycle: the right talent creates innovative cultures within a company and, therefore, can attract more of the best talent.

Undoubtedly, when discussing how to build innovation, the conversation needs to be broad and deep. This is especially true when it comes to a region like Latin America that is only just embarking on innovation-driven growth. But talent is a good place to start—and  it may be the only place.

1 Latin American Entrepreneurs: Many Firms but Little Innovation, World Bank Latin American and Caribbean Studies, 2014; 2 Is the Glass Half Empty or Half Full? School Enrollment, Graduation, and Dropout Rates in Latin America, Inter-American Development Bank, 2013; 3 “Youth unemployment: Generation jobless,” 27 April 2013, The Economist.

 


Dttl_garycoleman_56x56 Gary Coleman is Managing Director, Global Industries, of Deloitte Touche Tohmatsu Limited. He is a member of Deloitte’s Global Markets Committee and is the lead partner in Deloitte’s strategic relationship with the World Economic Forum. Follow him on Twitter @gcoleman_gary.

Japanese manufacturers focused on high performance

By Tim Hanley - April 07, 2014

Bzi_gro_glb_ho_1918A few weeks ago, I had the opportunity to return once again to Japan to visit with a number of Deloitte Japan manufacturing clients. One of the many highlights of my trip this month was the opportunity to meet with several manufacturers in Nagoya. Japanese manufacturers have been long admired by many for a relentless focus on continuous improvements to their business. So it is not surprising that during my visit we had rich discussions around best practices of leading manufacturers to sustain top performance.  

During several of these conversations, I referenced a point of view written by my partner Craig Giffi, Deloitte United States (Deloitte LLP) and others entitled, Cracking the genetic code of high-performing manufacturers. Hot off the press, the article provides great insight on the set of game changing capabilities that high performing manufacturers have in areas of brand image, leadership and management, business strategy, research and development, delivery speed, manufacturing processes, and supplier networks.

During my visit with several Deloitte Japan clients in Tokyo, we also had a wide ranging discussion on business models. While many of the best companies in Japan are role models as best practice companies, they are always looking increasingly outside their industry for ideas for business model innovation, as they strive to have the most efficient support structure. In all of my visits, I found a real thirst for insight on what others were doing to drive efficiency and high performance. It is this relentless focus on high performance that allows these companies to be truly viewed as world class.

Japan is a country of many challenges with the aging population and limited natural resources. Yet the best companies are prospering and are increasingly looking to invest where their customers will be in the years ahead. Among the locations of interest are the fast-growing economies across Southeast Asia, which represent very attractive customer markets for many Japanese companies. Japanese manufacturing investments in research and development, manufacturing plants, and to establish sales and distribution operations in these growth markets is expected to continue in the years ahead.


Tim HanleyTim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 35-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.

WEF on Latin America: Getting there from here

By Gary Coleman - March 31, 2014

Panama.According to the competitiveness index produced by the World Economic Forum (WEF), “innovation-driven economies” is the third and highest stage of development. Many Latin American countries are now poised to make the transition to this stage. Most of the remaining countries are only a step or two behind. 

But how does an economy become innovative-driven? One way is by promoting innovation-driven entrepreneurship. That’s the focus of a panel I will be participating in this week at WEF on Latin America in Panama City. Entitled “Innovating for Competitiveness,” the session will explore what steps the region can take to promote not just entrepreneurship but the innovative new businesses that propel an economy into that sought-after “stage three.”

To be sure, there are some relatively straightforward steps a country can undertake to make it easier to do business and encourage entrepreneurship: streamline regulation, reform labor laws, improve communications, and technology infrastructure. But to drive innovation—that’s a more complex mix of talent, profit, and public policy; talent to conceive and develop new and innovative products and services; profit to invest in talent and to get new ideas from design to implementation; and public policy to find ways to stimulate all of the above.

The panel will take on this multifaceted topic, representing a range of views. From the public policy world there will be Diego Molano Vega, the Minister of Information Technologies and Communications of Colombia. Nicolás Shea Carey will bring a view from the ground as the founder of Start-Up Chile, a program that encourages innovative entrepreneurs to locate in Chile. From research and strategy firm Frost & Sullivan, David Frigstad will offer insights on emerging markets and technology. Moderator Alfredo Capote from Citibank in Mexico, will bring the perspective of the expanding multinational. 

Whatever the viewpoint, however, the unifying principle here seems to be clear: innovation is critical for the region’s economies to move forward. As the WEF competitiveness index states, “less-advanced countries can still improve their productivity by adopting existing technologies or making incremental improvements…”   For most countries in Latin America, this isn’t enough anymore. To keep growth trajectories strong, technology and other disruptive factors must spur more than just greater efficiencies in these economies; they must spur innovative approaches. And when that innovation is paired with entrepreneurship, it can be a truly powerful engine of growth.


Dttl_garycoleman_56x56 Gary Coleman is Managing Director, Global Industries, of Deloitte Touche Tohmatsu Limited. He will be heading the Deloitte delegation to the World Economic Forum in Latin America, where he will participate in the panel, “Innovating for Competitiveness” on 2 April. Follow him on Twitter @gcoleman_gary.

Connectivity and innovation underline 2014 for automotive industry

By Tim Hanley - February 24, 2014

Auto showA few weeks ago I had the opportunity to join thousands of global automotive industry executives in Detroit for the North American International Auto Show 2014. The show continues to be a striking demonstration of the dynamic innovation happening in the sector. Original equipment manufacturers (OEMs) use this event to kick the year off with an outstanding showcase of new vehicle designs, many of which feature innovative technologies to help consumers stay connected. (Read Deloitte views on connected vehicles), What was also striking to see this year was the further integration of advanced materials in some of the new models. (Read more on Advanced Materials Systems trends).

During the auto show, the Deloitte U.S. member firm released the 2014 Global Automotive Consumer Study: Exploring consumers’ mobility choices and transportation decisions, sharing perspective on Generation Y consumer trends. Based on a survey of almost 700 U.S. Gen Y consumers, around 60 percent expect to buy or lease a car within the next three years. Not surprisingly affordability and high operational and maintenance costs had been top reasons preventing ownership. But as explained by graduate school students during the annual Deloitte U.S. Gen Y event, as their purchasing power grows, vehicle ownership is more in reach. (Read the Deloitte U.S. press release).  Please stay tuned over the next several months, as Deloitte member firms worldwide launch the local findings of a broader mobility survey of more than 23,000 consumers across 19 countries.

Like in many other countries, the automotive industry is a vital engine for economic growth in the U.S. Given industry sentiment that 2014 is expected to bring growth in production of new passenger and light commercial vehicles, this certainly is a positive sign for the U.S. economy and local industry.


Tim HanleyTim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 35-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.

Impact investing: An investment approach starting to interest mainstream investors

By Chris Harvey - February 11, 2014

This article was co-written with Erik Classon

Blog_tree_money_300x200Since the term, ‘impact investing,’ was first coined in 2009 by the Monitor Group ("Investing for Social & Environmental Impact: A design for catalyzing an emerging industry"), a great deal of interest has grown around this concept. Initially the dialogue around impact investing was concentrated among a niche set of players identifying themselves as impact investors (e.g., social entrepreneurs, foundations seeking to expand beyond grant-making, focused impact investing funds and public sector/supranational organizations). 

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Davos 2014: Optimism with a healthy dose of reality

By Gary Coleman - January 28, 2014

Post-davos photoWith economic recovery seeming to finally take hold this year, I was not surprised that many of the Davos 2014 speakers sounded a positive note for the future. Nowhere was this more evident than in the remarks from country leaders. But these leaders understood that there is still a lot of work to be done—and it was striking how in sync they were when it came to the challenge going forward: building and sustaining growth.

South Korea is focusing on entrepreneurship and building a “creative economy,” where individuals are encouraged to start businesses and put “innovation into action,” according to President Park Geun-hye. Similarly, Liberia is making strategic investments in education and focusing on public-private partnerships to spur the rise of small and medium businesses. Mexico is working to promote start-ups by reforming fiscal policies to allow greater access to credit.

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Shaping the future together

By Martin Plendl - January 27, 2014

Deloitte Davos Live video screen_300x200Times of global change require leaders with a global vision – leaders who inspire confidence and foster innovation. I see this attitude reflected in Davos. I have noticed a remarkable shift of attention at this year’s World Economic Forum. While the meetings in past years focused heavily on finance and the banking industry, representatives of the global technology industry are clearly the thought leaders now.

At the same time, politics seems to have been pushed into the background somewhat – especially, European representatives are less visible this year. But Europe’s image has not yet fully recovered after the Euro crisis and the world is closely watching how European banks will perform in the stress tests.

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Safeguarding aviation and travel value chains

By Chip Cottrell - January 22, 2014

PACI blog imageCorruption is recognized as one of the most significant obstacles to economic and social development. It is identified in the World Economic Forum’s Global Competitiveness Report as one of the top five impediments to doing business in 58 percent of the 144 countries analysed.

Having deep experience and expertise in the subject of corruption, prevention, and working with various industries and companies around the world, Deloitte has partnered with the World Economic Forum and their Partnering Against Corruption Initiative (PACI) as well as the Aviation and Travel Industry to explore the effects of corruption on the constantly growing and continuously expanding reach of the aviation and travel industry. Our experience in this arena, confirmed through our work with various industry sectors and companies during this project reveal the readiness of the aviation and travel industry to take another step in the fight against corruption and to work together towards leveling the global playing field through cross-industry and cross-regional collaboration with appropriate stakeholders.

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Business must disrupt the status quo

By Joe Echevarria - January 21, 2014

Blog_joee_davos14_300x200It’s time for real change. It’s time for disruption.

In the last few years, the world has been lurching from financial crisis to financial crisis. As business leaders gathered last year at the World Economic Forum’s annual meeting, the U.S. government had just narrowly averted falling off the fiscal cliff. Less than a year later, the U.S. found itself in a similar situation, which resulted in the third-longest government shutdown in U.S. history.

Despite all of this, in the U.S., and globally, there have been positive signs of economic recovery and business growth. Momentum continues and that is why I’m optimistic for the upcoming year.

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What the worker of tomorrow wants

Dttl_davos14_positiveimpact_300x200More than 1,500 business leaders are gathering here in Davos, most of them part of the C-suite in their organizations. And as they mix with heads of state, influential NGOs, and the occasional celebrity, I doubt they are thinking about workers 30ish and under.

But they should be.

By 2030, more than 70 percent of the workforce will be made up of workers born after 1983—the millennials . And according to a new survey released today by Deloitte, businesses need to be aware of three key themes on millennials’ minds: social impact, social media, and innovation.

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