UTAR Institute of Management and Leadership Development (IMLD) organised a webinar titled “The Role of Investment on Infrastructure and Innovation: From Comparative Advantage of Nations to Competitive Advantage of Firms” on 23 February 2021 via Zoom. The webinar recorded a total of 122 participants in Zoom and 510 views on Facebook Live.

The invited speaker was Western Sydney University Dean of School of Business Prof Amir Mahmood. Also present at the webinar was IMLD Director Prof Dr Cheng Ming Yu. The webinar was moderated by Bachelor of Economics (Honours) Global Economic student Kor Yik Ling.

The webinar aimed to highlight how infrastructure investment impacts a firm’s innovation. Through this webinar, the participants were able to understand the relationship between creative destruction and innovation, and figure out how the Industry 4.0 technologies could impact the firm’s working environment in the future.

Prof Amir started his talk by underlining the role of investment in infrastructure and innovation and explaining how it is categorised in the public and private sectors. Besides, he elucidated that the types of infrastructure are classified into physical infrastructure, soft infrastructure, social or cultural infrastructure and digital infrastructure. He said, “The economy-wide infrastructure and firm infrastructure will impact the firm’s productivity, efficiency, value creation, price-cost margin and international competitiveness. Also, the firm innovation can be classified as products (goods and services) innovation, process innovation, business model innovation, organisational innovation and social innovation.”

Due to the expansion of industry waves and their innovation, Prof Amir accentuated the exponential technologies embedded in Industry 4.0, namely the Internet of Things (IoT), Big Data and Analytics, Robotics Artificial Intelligence (AI), Additive Manufacturing, Augmented Reality, Interconnectivity, Machine Learning, Augmented Reality and Wearables, Human-Machine Interface, and Automation. 

Prof Amir continued his talk by sharing the definition of creative destruction by quoting Joseph Schumpeter from his book Capitalism, Socialism and Democracy (1942), “The process of industrial mutation incessantly revolutionises the economic structure from within, incessantly destroys the old one and incessantly creates a new one”. He also explained the role of entrepreneurship based on Schumpeter’s input, “People with entrepreneurial spirit are able to control the economy because they are responsible for delivering innovation and adapt to technological change”.  Prof Amir emphasised that due to the rapid technological growth, the old innovation of the organisation is being replaced by new innovation which is known as creative destruction, and the continuous innovation will have resulted in the organisation’s productivity growth.

“The innovation waves and lifespans of technological changes have swiftly advanced from the year 1785 until 2020. The first wave was water power which includes iron, mechanisation, textiles and commerce. The second wave includes steam power which emphasises on railroad, steel production and cotton. The third wave includes coal and electricity where the development of trams, e-trains, and chemicals was introduced. In addition, when the third wave evolved into the fourth wave, the uses of oil and gases for cars and vehicles were produced. The fourth wave eventually moved forward to the fifth wave with the invention of digital networks including Biotechnology and Nanotechnology. However, nowadays, the technology has advanced further to the sixth wave which introduces renewable energy; it emphasises on product sustainability, the industrial ecology, smart cities and many more,” he clarified. Furthermore, Prof Amir also stated that Industry 4.0 innovation has created new products, new job opportunities, new production processes and new business models.

Before concluding the webinar, Prof Amir said the comparative advantage is influenced by countries or regions which depends upon the factor of endowments or costs. He also shared his thoughts on the distinction between the comparative advantage of nations and the competitive advantage of firms. He said, “A firm can achieve a healthy competitive advantage if they can create more value than their competitor and it depends on the firm’s continuous innovation and growth in their value-added productivity. Also, the firm’s entrepreneurship skills play a crucial role in the innovation of creative destruction and infrastructure strategy.”

The interactive webinar ended with an insightful Q&A session and group photography.