This post was updated in March 2021
The word “innovation” is now seen everywhere. What does it mean?
According to the OECD, in their Oslo Manual 2018:
“An innovation is a new or improved product or process (or combination thereof) that differs significantly from the unit’s previous products or processes and that has been made available to potential users (product) or brought into use by the unit (process).
This definition uses the generic term “unit” to describe the actor responsible for innovations. It refers to any institutional unit in any sector, including households and their individual members.”
Innovators are crucial to addressing problems in society and business and the progress of our research and development sectors generally.
There are many elements that contribute to innovation. Collaboration—enabling people to connect, create, learn and explore new ways of working—is one of particular interest to me.
Indeed the Australian Innovation System Report 2013 report stated: “Collaborative innovation is significantly correlated with the introduction of new-to-Australia or world-first innovations.”
But across Australia, collaboration is typically poor. Results in the Australian Innovation System Report 2017 include:
- Australia ranks low on most OECD collaboration measures, ranking in the bottom half of the OECD.
- “Using the broadest scope of collaboration activity, which includes collaboration for purposes other than innovation, it is estimated that 86.3 percent of Australia’s innovation-active businesses undertook no collaboration at all in 2015–16.” That means that fewer than one in five businesses are collaborating with others!
- In terms of business-business collaboration on product and process innovation, Australia ranks 25th out of 32 OECD countries, with fewer than one in four innovative firms collaborating
The authors highlight that networks are essential to an innovation system. On page 15:
“They provide a practical means for collaboration on innovation…, which in turn contributes to business performance. A recent firm-level study of 7,000 Australian SMEs found an association between collaboration on innovation and productivity growth: collaboration on innovation increased annual productivity growth by 4.1 percentage points in the firms studied.”
No matter the model of taking ideas through to industry, business, and society (for example, venture capitalism or joint ventures) communication with others and forming a reliable network is critical. This includes connections between innovators so they can effectively develop, deliver and improve their offerings to customers, as well as between innovators and their stakeholders and broader parts of society to ensure products and services are implemented.
Australia is ranked 21st in the world according to World Economic Forum’s The Global Competitiveness Index 2013–2014: Country Profile Highlights. This ranking is disappointing to many including us! We have so much potential in this country.
Interestingly, one of the factors contributing to this low ranking is the burden of government regulation, where the country ranks a poor 128th. Further to this, the business community cites labor regulations and bureaucratic red tape as being, respectively, the first and second most problematic factors for doing business here. In addition investment in venture capital is well below what it was pre-GFC ($901 million in 2007-08) at $331 million in 2011–12.
Therefore being able to justify your value to society effectively is critical to making headway with customers, regulators, and, crucially, funders.
That’s why here at Innovate Communicate we want to empower innovators to contribute to Australia’s innovation system.
And we are buoyed by the statement in the Australian Innovation System Report that despite some decline in business dynamism in Australia and some other developed economies, Australia’s entrepreneurial attitudes remain positive.
Get in touch to discuss our current services to support communication and connections.