KUCHING: For Malaysian businesses to fully benefit from the Government’s initiatives to boost innovation in their sector, they must be able to identify and measure the investments made towards both tangible and intangible assets, which contribute to innovation outcomes.
Chiew is seen speaking during the event. Chiew says all too often, management want to see results fast, and if they are not convinced that the project will be profitable, they cut off the funds and in the process kill off innovation.
By doing this, enterprises will also benefit from a clearer picture of their investment practices, greater support to access finance and improved corporate reporting, said the Association of Chartered Certified Accountants (ACCA).
ACCA head of Policy for Asia-Pacific, Chiew Chun Wee, was speaking at the recent Innovating Malaysia Conference 2014 in Kuala Lumpur.
Chiew said that it is also essential for senior management to be fully committed and supportive in order for an innovation culture to flourish in the organisations.
In support of the Government’s National Corporate Innovation Index (NCII) initiative, ACCA undertook research with other key partners including the UK’s NESTA – an innovation charity, Inngot, specialists in intangible asset identification, rating and valuation, and Alpha Catalyst Consulting to gain insights into Small and Medium Sized Enterprises (SME’s) attitudes to innovation and its return on investment.
Chiew said that all too often, management want to see results fast, and if they are not convinced that the project will be profitable, they cut off the funds and in the process kill off the innovation.
“Innovation is not just about bright ideas. It is clearly about execution as well. It’s about having an internal decision-making structure that supports innovation. It’s about having the right information,” he explained.
Towards this end, ACCA and its partners are delighted to support the Malaysian Government’s NCII project because it is believed the index will deliver considerable practical benefits.
“The NCII framework will allow management to have a much clearer picture of their internal investment practices, especially those which result in longer-term returns as is often the case with innovation activities.
“The data collection process itself will also enable companies to take a hard look at the information system, address any gaps, so that the necessary useful data can be collected on a going-forward basis to better guide investment decisions,” Chiew further explained.
NCII enables organisations to benchmark themselves against FTSE companies, as well as against each other – giving them a better understanding of where they stand, enabling management to conduct more strategic, intelligent investment planning based on market realities.
Tracking and consolidation of information through NCII will also facilitate an organisation’s adoption of Integrated Reporting (IR), which is being encouraged by the Malaysian Government and the Securities Commission.
“As the first professional accountancy body to introduce IR into its qualification, ACCA is interested in any tools that will better equip companies to adopt IR, which requires organisations to provide information material to the business beyond the traditional financial numbers under accounting standards – giving a much more comprehensive and strategic picture to current and potential providers of financial capital and other key stakeholders.
“ACCA is therefore excited to be supporting the Government’s initiative, which we believe will bring real benefits to Malaysian busines,” Chiew added.