Competition, Innovation and Productivity

I. Global production
After the global crisis in the 90s there followed a large increase in the supply of labor with over700 million workers added to the global production of goods and services.

Many manufacturers moved their plants to countries with cheap labor, to achieve cost reduction and maintain competitiveness without altering their production of goods and services.

At the same time the impact of technological developments drove competitiveness globally, requiring adaptation to constant change.

In this context, organizations that innovated in their production processes flexibly met the realities and safeguarded their businesses.

Latin America, considering its human and natural resources, is in a favourable position in the current globalized economic, political and social climate. However, compared with countries with cheap labor and that are fast adapting to new technologies, its competitive edge will be blunted if it does not transform the way it produces goods and services.

I. Productive transformation
In the long-term, the competitiveness of a company’s productive activity is inevitably linked to increased productivity. Accordingly, positive productive transformation will achieve sustainable cost reductions over time. Cheap labor meanwhile is not a sustainable resource.

What does increased productivity mean?
Increased productivity refers to a constant search for improved efficiency in the use of resources to produce goods and services.

How to achieve continual improvement in productivity?
Continual improvement in productivity requires actions to build competitiveness in a market that demands constant innovation.

Therefore, it can be said in terms of productive transformation that successful innovation is the key element needed to boost productivity. This is based on three concepts:
• Incorporation of technology
• Improvements in processes/procedures.
• Staff training at all levels.

If we pause briefly, we can see how the above are all interconnected. By incorporating technology, processes/procedures become improved, but in terms of the good quality decision-making and implementation needed, this requires trained personnel. In other words, by focusing on any one of the above areas we automatically stimulate the other two.

How to implement an innovation plan?
The challenge is the simultaneity of action that is needed to incorporate technology, improving processes and training employees in order to make a successful transformation.

The implementation of this transformation should not necessarily be centred around a single big change, but rather hundreds of small changes relating to specific objectives and with clearly defined scope.

Obviously, it is impossible to conduct each and every one of the tasks in a production process with optimum efficiency. As such, I believe efforts to improve productivity should focus on those elements that provide customer value.

Where to focus our efforts?
Just as the industrial revolution paved the way for large-scale production, at present the innovative efforts of companies should focus on customer needs as a differentiating mechanism to achieving competitiveness.

How important are organizations’ human resources?
Continual improvement in productivity is a process fuelled by new ideas. The human resources of the organization, unlike any other resource, have the ability to innovate and develop new ideas. A machine can only reach its theoretical limit of performance; the human is limitless in its imagination.

I. Innovation and Productivity in the Entertainment Industry
The Entertainment Industry is no stranger to this situation. Incorporating innovation as a means to improve productivity will be the major challenge for organizations in this sector if they want to remain competitive – and not only to ensure their livelihood but also to expand their operations.

In the current model of global marketing, competition forces dynamic adjustments to ever changing market conditions. The history of the entertainment industry shows that technological changes create new paradigms, new models of working.

In this context it is clear and obvious that the adoption of ICT (information and communication technology) has greatly facilitated the way we engage. These technologies provide the ability to share and process information, providing customers with the means to access, use and share that information from anywhere.

These technologies have introduced a new paradigm: the virtual game and the conventional game are two commercial concepts coexisting in a market that demands both.

Since the entertainment industry is a business process, providing services geared to meeting the demands of customers, organizations must focus their efforts on providing services that provide added value to clients. In this sense the innovation process should consider seizing on as wide a range of ICT possibilities as possible. Trends and customs that get in the way of this approach should be avoided, since customers demand entertainment from all the technological means available.

The challenge is to combine services and virtual games in a way that increases productivity and improves competitiveness.