Innovation key to survival

LAHORE: In a Trump-style world of tariff uncertainty, clinging to old methods is highly risky. Innovation has become critical for Pakistani entrepreneurs in an era where tariff policies are unpredictable and can shift rapidly.

Entrepreneurs who innovate not only survive but often grow, while those who do not face sudden decline. When tariffs can unexpectedly rise, products that were once competitive may become too expensive. Innovative businesses can adapt swiftly -- by altering product designs, sourcing alternative materials, or pivoting to new markets. Simple commodities suffer the most under tariff pressures. Innovation -- whether in product quality, packaging, branding or customisation -- enables Pakistani exporters to move up the value chain, offering products that command a premium, even with tariffs in place.

Innovative entrepreneurs do not restrict themselves to a single product or market. They develop multiple product lines and target diverse markets to spread risk, making them less vulnerable if, for example, the US suddenly imposes heavy tariffs on Pakistani goods. When tariffs increase the landed cost of goods, the only way to remain competitive is often to lower internal costs. Innovation in manufacturing, logistics and supply chain management becomes vital.

Countries like Vietnam and Bangladesh have used product and marketing innovation to establish strong brands. Pakistani entrepreneurs, too, can differentiate their products -- such as organic rice, sustainable fabric and handicrafts -- and reduce reliance on low-price competition.

Even before the Trump era introduced new uncertainties, established companies largely owed their success to the effective execution of plans that optimised existing businesses. However, startups thrived on creativity and innovation, challenging industry leaders and pushing them to innovate as well.

Innovators aspire to goals that may seem unachievable to the average person. For large companies to stay ahead of competitors, management must set ambitious, seemingly unattainable targets in product design, marketing, and management. With strong aspirations, nothing is impossible. A striking example is John F Kennedy’s 1962 pledge to land a man on the moon within a decade -- a statement many initially dismissed. Yet, motivated by Kennedy’s vision, American researchers achieved the goal within the timeframe, despite his assassination in 1963. Similarly, corporate leaders must set clear, time-bound targets for product or service innovation, while ensuring that risks do not jeopardise the company’s immediate interests.

In large companies, innovative ideas abound. The real test for innovation leaders is to select the best among them. Innovation is often a process of trial and error; if an innovation fails, the resources spent are lost. Thus, larger companies must define a budgetary boundary for innovation efforts, ensuring they do not overcommit resources.

Pakistani entrepreneurs must understand that innovation must excite customers and add value to the product. Once an innovation is achieved, management must then focus on applying the most efficient technology and developing a business model that strengthens the company’s financial position.