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‘National crisis’: Australian innovation in dire straits

Adam Zuchetti
Adam Zuchetti
08 February 2019 3 minute readShare

Australia is approaching a “national crisis” level in terms of innovation, according to one business technology provider, referencing a Harvard University ranking that placed Australia 86th in the world.

At a media event to launching its inaugural Workplace Innovation Survey in Sydney recently, Ricoh Australia CEO Andy Berry said that Australia faces a looming “national crisis” in terms of innovation, pointing to research by Harvard University that showed Australia to be the worst-performing country in the OECD when it comes to business innovation.

According to the Atlas of Economic Complexity, compiled by Harvard’s Center for International Development, Australia sat way down in 86th position in 2016 (the most recent year for which data is available), sitting between Senegal and Iran.


By comparison, other English-speaking nations all placed in the top half of the index, with the US just making the top 10, the UK in 12th spot and Ireland 14th, Canada 35th and News Zealand 54th.

Japan topped the ranking of 127 countries, followed by Switzerland and the Republic of Korea. Last on the index was Papua New Guinea.


Disconnect between perceived capabilities and reality

The Ricoh-commissioned study, conducted by StollzNow Research, undertook 304 in-depth interviews with business professionals across executive, management and middle management, in mid-sized and large firms with 100 or more employees.

It found an alarming disconnect between how leaders view the innovation capabilities of their business and the views of direct people managers.

On a scale of 0 to 100, C-suites ranked their innovation abilities 74.0 — well above the score of 61.3 stated by middle managers.

According to the research, the biggest threats to innovation were deemed to be the ability to finance new ideas (24 per cent) and risk aversion by staff and management (22 per cent).



Interestingly, more than one in four of those surveyed (27 per cent) suggested that they do not have the right people in their teams to be able to innovate.

Innovation ‘not a priority’

Even more surprising was the finding that only a quarter of business leaders even think that innovation is a core focus of their business.

“Innovation should be like breathing,” said StollzNow Research director Neil Stollznow while explaining the results.

Some 40 per cent of respondents said that they believe innovation is essential for the very survival of their business. But 26 per cent said that while innovation is important, their focus needs to be on current operations.

Mr Stollznow suggested that for many of these businesses, more focus on innovating the way they operate may help to alleviate the pressures of the “here and now” demands on them.

Ricoh’s Mr Berry concurs.

“We know innovation can deliver operational improvements and new business opportunities, but we’re not elevating its strategy value, from the boardroom to frontline staff,” he said.

“In today’s rapidly changing economy, innovation is a must and should not be seen as a ‘nice to have’ or a ‘department’.”

Risk of failure ‘much higher in Australia’

According to the research, the main threats to innovation in business are cost and risk aversion by staff and management.

However, Mr Stollznow suggested that another significant, though perhaps understated, drag on innovation is the comparatively high cost of failure in Australia.

He said that the local regulatory framework, as well as the reputational risk associated with failed developments, are much higher for Aussie firms than those based in Asia, making many reluctant to take a punt.

What can be done to boost business innovation?

Aside from pushing for policy change, the research identified one key factor that businesses can take on themselves to boost innovation, and make their transition to new ways of working more effective.

Many organisations develop or introduce new technologies, systems or processes to deliver operational efficiencies, improve service experience for customers or streamline staff touchpoints. But their effectiveness is mooted by poor uptake and poor integration within existing structures.

According to the report, only a third of employers always involve their teams in the rollout of new technologies, despite this buy-in from employees being crucial to their uptake, and hence return on investment.

He also cited the example of one major telco which admitted to rolling out three different CMS platforms in as many years — a clear drain on financial resources — as well as the repeated productivity losses associated with changing staff from one to another.

As such, Mr Stollznow said that it is important for businesses not just to involve staff in selecting and transitioning to new systems and technologies to ensure maximum value, but also to outline the strategy behind why they are necessary in order to deliver buy-in.

‘National crisis’: Australian innovation in dire straits
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016. 

The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Email Adam at [email protected]

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