Pull-based models , on the other hand , are more customer and market-oriented . Pull-oriented organisations are looking for ways to adapt to changing markets and customer demand . Thus , they are usually focused more on listening to customers , learning from them and on moving fast .
Typically , innovation-push approaches use traditional , formalised methods of filtering new ideas , assessing them and allocating resources to a select few to be implemented . The most well-known example is the Stage-Gate process . This approach suits those in highly regulated industries .
On the other hand , innovation-pull approaches , favoured by start-ups , are best illustrated by the lean start-up model ( Ries , 2011 ). This model is based on agile responses to small scale and rapid experimenting with customers in real world situations . The main idea is to test the innovation , learn and adapt as quickly as possible . Pull approaches are well suited to organisations operating in an unpredictable , complex or rapidly changing environment .
Innovation is varied and diverse . It is evident that taking a narrow view of innovation and pursuing a single dimension such as technology advances , research commercialisation , entrepreneurial start-ups , will likely be ineffective .
Local communities are better served by recognising that innovation works as an eco-system and to take action on multiple fronts . Understanding different innovation dynamics can help identify the most fruitful areas for action by local communities .
Drawing on the innovation management literature as a whole , three particularly potent action areas are suggested . These are :
• Strengthening the innovation capabilities and knowledge of enterprises and their people .
• Capitalising on how innovation works to enhance productivity and create value .
• Ensuring innovation brings obvious social benefits in the interests of the whole community .
INNOVATION CAPABILITIES The challenge for local communities is to build and accelerate the innovation capabilities and knowledge of a critical mass of local business enterprises , irrespective of size or sector .
Central to innovation capabilities is the enterprise ’ s ability to experiment and learn , to be outward and forward-looking , to collaborate , and to solve problems by crossfertilisation of knowledge and expertise .
Proficiency in collaboration is a significantly powerful capability . There is value not just in formal ventures and partnerships , but in building trust and shared interests , negotiating divisive opinions and outlooks , and brokering industry clusters and communities of practice .
Nieminen ( 2018 ) and Indeed ( 2022 ) identify four aspects of innovation that enterprises should develop and align . These are :
• Capabilities : the range of abilities and resources for managing innovation , particularly , financial resources and the skills of people , their frontline insights and abilities in relationship-building and joint ventures .
• Structures : the organisation and protocols to consistently put capabilities into action , e . g ., communication channels , decision-making processes , project management procedures .
• Culture : an environment and explicit values conducive to innovation , which are reinforced through personnel practices , remuneration , risk tolerance , performance measures and the like .
• Strategy : the evidence-based roadmap for the enterprise ’ s current and future success , aligned with its innovation activities and operationalised in its business model for profit and growth .
The ability to learn , to be agile and to frame and solve problems by thinking differently are capabilities promoted by design-led innovation . ( Kennedy , 2022 ).
A vital ingredient is to avoid the ‘ perfect ’ obstructing the ‘ good ’, that is , rather than researching and analysing the perfect model , go for small scale testing of innovations that allow enterprises to fail and learn fast , and pivot to a better approach quickly .
Such innovation capabilities emphasise the human factors , rather than a focus on technology itself .
To understand more about how innovation creates value , a closer look at innovation and productivity is needed .
INNOVATION AND PRODUCTIVITY Productivity is often misunderstood as efficiency , doing more with less or working people harder for longer . Productivity is more accurately described as transformational change in businesses through new capabilities .
It is useful to look more closely at the active ingredients of productivity and in particular , the role of intangible assets .
Unlike tangible assets ( such as land , buildings , machinery , computers , vehicles and inventory ), intangible assets don ’ t have a physical presence , but still hold long term financial value for a business .
Intangible assets include intellectual property , explicit and tacit sources of knowledge , a loyal customer base , proficient management of workforce , customer and supplier relationships , reputation and brand recognition and other forms of goodwill .
Moreover , in developed economies , intangible assets have become more important for business competitiveness in recent decades , with the rise of more knowledge-intensive , economically complex activities and industries .
In knowledge economies , the competitive advantage of enterprises and nations is increasingly shaped by the effective use of intangibles such as learning , relationships and knowledge , not physical inputs .
McKinsey & Company ( 2021 ) cite research showing that economies that are experiencing growth in intangibles are also posting growth in total factor productivity . They make the case that companies deploying all four types of intangible capital ; innovation capital , digital and analytics capital , human and relational capital , and brand capital , not only grow but build capabilities that create competitive advantage .
These intangible assets are the link between innovation and productivity .
VOL 15 NO 2 2022 08 www . edaustralia . com . au