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Innovation downturn as business efforts lag

Innovation downturn as business efforts lag Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Australian businesses are innovating less, despite their positive views that Australia’s culture of innovation remains largely unchanged, according to a newly published index.

The latest National Australia Bank Labs Business Innovation Index fell to 59.8 points in Q2 2017, from 67.6 points a year ago, with all three components — doing things differently, more quickly and more cost efficiently — of the Index lower.  

According to NAB chief economist Alan Oster, Australia’s next growth cycle must be defined by ideas, creativity and execution.

“Our future lies in our ability to foster a culture of innovation across the economy,” Oster says.

According to NAB, while the index saw a decline, business perceptions of the culture of innovation in Australia, their industry and own organisation were largely unchanged, despite this not translating into actual innovation behaviours.

“While business does not believe that the culture of innovation has changed, when measured against actual behaviours, innovation appears to have declined over the past 12 months, irrespective of business size,” Oster says.

“There is a bit of a ‘perception v reality’ disconnect, in terms of what we think we’re doing to innovate and what we’re actually doing when we measure behaviours and outputs.

“It’s hard to pinpoint why that disconnect may be occurring, but perhaps it’s reflective of a less conducive economic environment over the past year and more cautious business behaviours.”

The report, however, shows a strong a correlation between the level of innovation within a business and the extent to which their leaders encourage innovation.

“The Index clearly shows that when innovation is encouraged by the leaders within an organisation, innovative behaviours follow,” Oster says.

“It is telling us that business leaders encourage innovation because of the value it can create in higher productivity, new processes, competitive advantage, adaptation to changing circumstances and differentiation.”

The report showed the biggest benefits to business from their innovative activities were improved customer satisfaction (6.0) and productivity (5.9), and innovative activities resulted in fewer benefits associated with new products and services (5.1).

Business innovation author and Professor of Management at the University of Melbourne, Professor Danny Samson, said companies need to have a “front of mind” attitude to innovation, stimulating problem solving and creativity as a systematic capability to foster change and growth.

“Innovation can be much more than just the province of executives or technical specialists, but rather a ‘full court press’, being included in organisational goal-setting, measurement and reporting, strategic priority statements, and ultimately in behaviour and culture,” Professor Samson said.

To access an interactive e-brochure summarising the report, including Australian business case studies from Telstra, legal services firm LegalVision, aquaculture company Yumbah and bike accessories manufacturer Knog, click here.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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