Building Intellectual Capital Through Global Innovation Networks (cont.)
Continued from June/July 2006 Main Page
UGS is committed to helping our customers develop as well as access that intellectual capital on many levels. For instance, in 2005 we provided US$4 billion in software grants to academic institutions and community development initiatives worldwide through our GO PLM™ program. This program provides education and experience with the real-world PLM skills that future engineers and technologists will need to support their employers' Global Innovation Network requirements.
One of our latest series of grants, which we announced at a news briefing in Beijing earlier this month, was for US$1.1 billion to 87 colleges and universities in China. While some observers view China as a threat to established leaders in the world's developed economies, a deeper look at this market actually reveals some of today's most promising business growth opportunities, even for companies that may currently be viewing China as the competition. The fact is, Chinese manufacturers rarely simply compete with the rest of the world. Rather, they are supplying the parts, and increasingly the engineering talent that's behind many of the world's most competitive products.
For companies that recognize the long-term potential inherent in this circumstance and that are capable of devising business strategies that foster collaboration and partnership through Global Innovation Networks, "Made in China" is transforming to "Made with China," to the advantage of all parties involved.
Why have Global Innovation Networks based on PLM technology become so important? Globalization is driving the two top issues that executives now cite as affecting their businesses, regardless of size: the need to create innovative new products that meet complex and changing customer demands and the need to get those products to market faster. The competitive pressure is forcing them to look beyond their own companies for the talent, experience and resources they need to meet these demands. Companies that can tap into innovative input from all segments of the value chain and transcend national loyalties have a distinct and proven advantage over their less visionary competitors.
This ability is not limited to large enterprise companies alone. Small and medium size companies have equal importance when it comes to contributing, as well as accessing, intellectual capital and a skilled labor pool.
A second example of UGS helping companies of all sizes benefit from the globalization trend is our participation in the Asian Sourcing Network (ASN), a joint initiative with A.T. Kearney Procurement Solutions and Tata Consultancy Services. The first ASN center opened in March in Coimbatore, India, providing local presence and a packaged solution for companies involved in low-cost sourcing activities. The ASN works to find, develop and bring onboard the services of companies from low-cost countries from which manufactures and their suppliers can electronically source engineered machine parts. The objective is to ensure companies can find the right low-cost suppliers for their needs and build effective long term relationships that enable the supplier to become a key partner in their Global Innovation Network.
AberdeenGroup projects that medium and large enterprises expect to double their average spend in low-cost countries from approximately 20 percent in 2005 to 40 percent in 2008. While many of these companies will make low-cost country sourcing decisions based on cost reduction alone, the greatest value comes from a strategy that incorporates low cost suppliers into the larger innovation network, providing an opportunity to drive increased revenue and create a competitive advantage.
Global manufacturers must remember that a diverse product development environment provides fertile ground for innovation and creativity to flourish. Viewing globalization with fear means missing significant opportunities for growth and the opportunity to incorporate cultural information that can help in developing new products for new markets. All global economies benefit from products that better meet customer demands, brought to market more quickly at the best possible price.
When companies build Global Innovation Networks with the idea of adding value from extended and previously untapped sources of innovation and intellectual capital, the potential seems almost unlimited.
