Welcome to the Keystone Column. This week we look at prioritising competitiveness in Ireland plus we consider what innovators should avoid doing. As usual, we conclude with our weekly list of current Irish public tenders.
Prioritising Competitiveness in Ireland
The political stasis at the heart of Irish government is a cause for concern. For every refusal to bend to pay rise claims in the transport sector, there are social welfare increases or scrapping of water charges that increase rather than reduce pressure on competitiveness for Ireland, let alone as a potential place to set-up a business. This week, the National Competitiveness Council published a special report focused Ireland’s competitiveness with respect to Britain (a Brexit related focus). The report is well worth reading and is very accessible. Its key recommendations are:
- The fiscal position must remain sustainable. While Ireland must compete from a taxation perspective, it should avoid any narrowing of the tax base and it must ensure the tax system supports and rewards employment, enterprise, investment and innovation.
- Ireland’s medium-term competitiveness is being affected by restrictions on state spending on capital investment. This will have a negative impact on our competitiveness in the future and damage our potential to secure the benefits of Brexit.
- A more diverse export base can reduce exposure to external demand shocks. Irish-based exporters, particularly in exposed sectors such as traditional manufacturing and agri-food, must continue to be supported to scale and diversify sustainably and strategically. There is a need to evolve into new products, markets and sectors, whilst maintaining competitive advantage in existing ones.
- Skilled labour is the key to retaining and winning mobile investment and growing a cohort of internationally-trading indigenous companies. Failure to tackle the under-resourcing of higher education will place Ireland at a considerable disadvantage internationally in the future and will have a significant medium-term impact on competitiveness.
- Innovation and productivity are critical to enterprise and export competitiveness. Irish enterprise must be at the forefront of technology and be able to invest in productivity-enhancing talent and capital. Facilitating start-ups (particularly those with the potential to scale and internationalise), and supporting high-potential growth companies with scaling opportunities, is vital. This must be supported by an administrative and regulatory framework that facilitates enterprise.
We highlighted Ireland’s place in the Bloomberg innovation index last week. All five of the above recommendations need to be addressed to drive Ireland’s performance up on both competitiveness benchmarks (where Ireland’s dominant FDI sector often masks our true performance levels) and innovation (where the same phenomenon presents).
Finding quarrel in a straw
News this week, following up on a story we have previously featured in the school bus sector, of 20 dawn raids by the competition authority. It relates to allegations of collusion on pricing for school buses. Cartels harm business, cost the taxpayer more money, consumers more money and are illegal. They should always be investigated if there are suspicions of genuine wrong doing. We will reserve our praise for a time when investigations are also taken in other sectors with few players and relatively homogenous pricing strategies or regions where certain competing products do not actually compete head on. Until that happens, it is hard to avoid the view that the competition authority avoids fights with large companies. There is very little to point to in their historical track record that suggests the contrary.
What innovators should avoid doing
The Harvard Business Review had an interesting article recently on what innovation programmes should not focus on. In summary, they are as follows:
- Obsession with low-cost reduction programs. Rather than paying attention to the numerator (increasing revenues), CEOs focus on the denominator (reducing costs). Executives say they want to grow the “quotient,” and attacking the cost side is always the easiest and quickest way to achieve it. This symptom is akin to organizational anorexia. What’s striking is that this symptom is so widespread that firms resisting the race to the bottom now stick out in the crowd. Deere & Co — founded almost two centuries ago, and consistently the leader in what it does — have people dedicated entirely to “imagining” the future. Lean is a powerful management tool, but having the “exact” number for efficiently doing the “work” of today jeopardizes the future by not having “extra” people thinking on it. Efficiency is not innovation.
- Obsession with listening to the customer. Almost all customers want their products to be as inexpensive as possible. So firms try to respond to this by delivering the value that they think their customers want. But great CEOs understand that the responsibility of defining greatness is the firm’s, not the customer’s. As Steve Jobs was fond of asking, Am I really going to ask customers if they want an iPad?
- Obsession with incrementalism. The benefits of compounded marginal gains can be substantial. “Small ball” can be effective in the short term. But when asked about the future, CEOs almost always talk about their current portfolios. By what percentage will they rise or fall? Radical innovation, when a new dominant design emerges that can lead to a step-change in a company’s fortunes, is often absent in their agendas.
- Obsession with acquisitions. When failing to innovate, CEOs acquire talent. Apple spending $3 billion on Beats, or Facebook paying around $19 billion for WhatsApp — this indicates that the companies found themselves stuck on the innovation plateau. The more innovative a firm is, the fewer acquisitions it makes. It develops the talent inside, focusing on a few great things. Jobs invested $150 million in developing the iPhone; Tim Cook has invested almost seven times that in Didi Chuxing. That is the tale of Apple during growth-driven-by-innovation, and Apple during innovation stall-out.
New public procurement tenders this week
Visit the Keystone website to view our take on the 500+ active public procurement opportunities with more than five days until their deadline. There are a vast range of services, supplies and construction related to public procurement opportunities in the following sectors (there are many more sectors than the sample list below):
- Construction and related trades,
- Professional & Advisory Services,
- PR, Media, Advertising and related,
- ICT supplies and services,
- Property & facilities management,
- Vehicle & automotive,
- Catering and related services,
- Cleaning and related services,
- Waste Management,
- Maintenance and related services,
- Horticultural supplies & services,
- Research & environmental monitoring,
- Printing, office supplies and related services,
- Medical and scientific research, supplies and services,
- A vast range of other services and supplies.
Businesses interested in any of these strategic procurement opportunities that are unsure of how they can follow-up on these tenders can contact Keystone at any stage. We would be happy to discuss your needs and where they may fit with your business growth plans. These public procurement opportunities are sources of business growth and innovation for companies across the country.
Please note, e-tenders often has public procurement opportunities incorrectly categorised so people relying on e-tender alerts could easily miss out on opportunities if they are dependent on it. E-tenders is only as reliable as the people inputting tenders and mistakes are made very frequently. The Keystone Column includes all live tenders posted on e-tenders that have five or more days until their deadline as at April 13th 2017.