VC’ s corner
Innovate or
deteriorate
If we are to improve our reputation for innovation, universities must be more aware of the business approach to marketing and development. By Michael Barber
32 | February 2013
We hear often today about productivity and innovation. Productivity is seen as the key to the future, unlocking national wealth by achieving more effective use of resources, both human and natural.
In turn, innovation – the process which realises novel economic, social or environmental outcomes – is seen as critical to increasing productivity. Indeed the federal government’ s white paper Australia in the Asian Century sets a target of Australia being in the top 10 most innovative economies by 2025.
So how do we rank today? How feasible is that goal and what is the role of universities in attaining it?
The most sophisticated assessment of national innovation systems is the OECD Global Innovation Index developed by INSEAD. In the 2012 index, involving 141 economies, Australia ranks 23rd.
The top five countries are Switzerland, Sweden, Singapore, Finland and the UK. The leading Asian countries after Singapore are Hong Kong at 8th, South Korea 21st, Japan 25th, and China 34th.
Year on year comparisons are a little fraught since the make-up of the index has been changing. However, Australia’ s position has at best remained constant, if not declined, over the past few years whereas, for example China’ s trajectory would appear to be upwards.
A second and in some ways more interesting assessment, since it is a survey of perceptions, comes from the GE 2012 Global Innovation Barometer. This is based on a survey of 2800 senior business executives in 22 countries and the results show a very interesting insight into how the rest of the world perceives Australia.
Asked to nominate the three countries that were seen as leading innovation champions, 65 per cent of respondents included the US, 48 per cent Germany, 45 per cent Japan and 38 per cent China.
Only 2 per cent included Australia although 18 per cent of Australian respondents thought we were an innovation champion.
Misplaced, as we might be tempted to think it is, this perception of Australia’ s capability for innovation is extremely important, particularly for the higher education sector.
We are already challenged by the high value of the Australian dollar and, if the view that Australia is not an innovative country becomes entrenched, this
perception could further undermine our efforts to attract international students to our universities.
The GE survey also points to 21st century innovation being very different from the past. More than 70 per cent of respondents agreed with the following statements:
• The way companies innovate in the 21st century will be totally different from the way they innovated in the past
• SMEs and individuals can be as innovative as large companies
• Innovation needs to be localised to serve specific market needs. Sixty-nine per cent of respondents agreed that innovation today is driven more by people’ s creativity than by high-level scientific research. These findings perhaps challenge conventional wisdom and may even be uncomfortable to many but they create great opportunities for us in higher education provided we are prepared to let go of past practices.
While the methodology behind these surveys is far from perfect it is clear that Australia has considerable work to do if we are to attain the target set in the Asian Century white paper.
What roles can universities play in doing so? Universities are very important parts of any innovation system and make a significant contribution through research and the graduates we produce.
However, it is important to recognise( far more than we do in this country) that while research, and particularly scientific research, can, and often does, lead to, or contribute to, innovation, it is of itself not innovation.
Equally( and often more critically) innovation relies on design, marketing and the development of novel business models and business processes. We often bemoan the ability of Australian business to adopt innovative technologies or research outputs.
While this is a serious issue it is also true that researchers tend to fail to appreciate how significant these other factors can be not only in successful innovation but also in a commercial decision to commence that process.
So what does it take to improve innovation? Certainly we need to maintain, if not increase, our investment in research and development.
However, if we are to gain the full benefits of this