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An Innovative Strategy Towards Economic Prosperity

An Innovative Strategy Towards Economic Prosperity

By Mohammad Solaiman Salahi, Sr. Manager of Business Development Services at Moore Afghanistan | Silsila Miskinmal, Master of Science at International Business, Hult International Business School

The Afghan economy will significantly depend on the private sector’s success. As an untapped country, Afghanistan has tremendous opportunity to benefit from innovative strategies in order to compete strategically in a fast-paced market.

It is crucial in today’s fast-paced environment for organizations to continually deliver value to customers and compete strategically to achieve a competitive advantage in the market. Innovative strategies have become central in bringing substantial success in the business environment today. Innovative strategy is defined as the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competencies to fulfill stakeholder expectations.

Companies across the globe are making “blind bets” with their innovation investments. They spend billions of dollars on these ventures with the trust of disrupting the norm, changing their company culture, and catering to the longer-term markets. The United Nations and the World Bank reckon global poverty has been cut in half over the past 20 years. The credit goes to the impact of innovative strategies on productivity.

Humankind has always thrived by inventing new ways of doing business to increase efficiency, enhance operations’ effectiveness, and eventually decrease cost. There are numerous examples of how innovative strategies evolved throughout history. From Henry Ford’s assembly belt that boosted mass production in the automotive industry to Google’s heavy investment in its Research & Development arm, to Samsung’s exploration of Artificial Intelligence – it all redefined industries in the past 20 years. While it worked for some, it didn’t for others. KATERRA, a technology-driven off-site construction company, is an excellent example of success. This company received multiple rounds of funding from SoftBank (A Japanese multinational company running Vision Fund, the world’s largest technology-faced venture capital fund, with over $100 billion) to transform construction by leveraging technology—every process and every product. The company benefited from a backward vertical integration strategy of blending technology, design, sourcing, manufacturing, and construction under single management, removing middleman, and speeding the construction process. These techniques allow lower cost, fast operation, and higher-quality finishes.

For low-income economies such as Afghanistan, leapfrogging offers the opportunity to take advantage of new technologies to address significant development gaps and spur economic growth.

It is imperative to note that alignment between corporate goals and innovative strategies is a critical success factor to any business. According to the PwC Innovation Benchmark Report, 65% of companies that invest over 15% of their revenue in innovative strategies believe that aligning innovative strategy with business vision was their top management challenge. Business leaders need to be fully aware of how they want to use innovative strategies to reach their goals. Otherwise, it will be merely a waste of money and resources.

In Afghanistan, decades of war left behind nothing but the devastation of infrastructures. Afghans have experienced an economic downturn since the Soviet Union invasion, followed by civil war. These incidents left the economy debilitated, and more than a third of the total population had fled the country. To a great extent, this phenomenon shifted people’s mindset to a surviving mentality rather than going the extra mile to thrive. How to catch-up to the fast-paced global market seems to be a dilemma that requires significant attention from experts. Adapting to the new game-changing organizational cultures to catch-up with the global market is a promising way out since the conventional approach has proved resilient. The Karzai government formation in December 2001 and the commencement of aid flows in the country opened a new window of hope in the eyes of many seeking prosperity and economic stability. Afghanistan adopted a market economy after formally enshrining it in the constitution in 2004. This systematic shift paved the way toward a brighter future for private institutions.

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With all these in mind, it is crystal clear that the Afghan economy will soon depend significantly on the success of the private sector. After decades of the wrong diagnosis, now it is the time to turn the corner and take the harder but indisputably better road. It is the clarion call for change. While aid dependency is on a downturn and the economic prosperity will be merely based on the increased exports and strong attraction of FDI in the country, none of which has harmful side effects. This situation calls upon Afghan companies to think out of the box and seriously consider an alternative called “leapfrogging” to catch-up with the global market. An innovative strategy that has proven effective and works perfectly in developing countries across the globe and results in elevated employment rates, enhanced growth-oriented entrepreneurship, and eventually a stabilization in the economy.

An entrepreneur has developed Afghanistan’s first mass-market accounting product, called HesabPay, which provides small and medium Afghan businesses with unprecedented access to financial services like payroll processing.

Traditionally, the path to prosperity for developing economies is to follow in developed nations’ footsteps. In contrast, there is an alternative theory of “leapfrog” development growing in popularity as countries have searched for new ways to leverage technological progress to drive growth and… Read the full article at BusinessDNA 12th edition.

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