Industry leaders pessimistic about Australian innovation: Report

Australia’s leading executives are underwhelmed by the country’s innovation performance, despite Australia performing well globally, surveys show, with innovation opportunities improving for small- and medium-sized enterprises.

This morning, financial services company GE released the results of two surveys, the first showing Australian innovation was well-supported relative to 22 other countries, and the second showing Australian leaders ranked Australia 16th out of 30 countries.

According to the Milken Institute Innovation Report, Australia led in five of the seven innovation indicators the firm looked at, and was above average in the remaining two.

But despite this, the GE Innovation Barometer survey found 31% of the 100 Australian respondents to the survey felt the innovation environment had not improved over the past five years. This was among the most negative response rates globally.

“Both reports highlight the importance of innovation to strengthening the Australian economy, but they are poles apart in assessment of the local commitment to research and development,” says Michael Ackland, vice president of strategy and growth for GE in Australia and New Zealand.

The Milken Institute Innovation report also stated despite Australia escaping a severe downturn, the global recession may have played a part in the responses.

“These perceptions do not completely match up with the improvement Australia has made to its innovation system,” the report says.

Australia was a leader in facilitating collaboration between firms, suggesting the Government’s investment of $3.5 billion to establish 44 cooperative research centres nationally was succeeding.

This was matched by the answer given to the Barometer survey, which found 88% of respondents believed innovation was driven by partnerships between different organisations rather than stand-alone activity.

Perhaps driven by this, four out of five respondents felt the innovation playing field has levelled-out, enabling small- and medium-sized enterprises to compete more effectively with the innovation efforts of larger companies.

When asked who would drive innovation in the next decade, 30% of respondents said it would be SMEs, compared to 28% globally.

Megan Clark, the chief executive officer of GE strategic research partner, CSIRO, said in a statement that more than ever, partnerships are crucial to innovation success in today’s environment.

“Good ideas come from everywhere, and when you bring industry, science and education together you get not only great perspectives that lead to better innovation, but you also find like-minded organisations that are driven to bring good ideas to reality,” said Clark.

Another category in which Australia led was in its barriers to entry.

The report stated “it only requires two days and two procedures to start a business there, and the cost of the procedures involved is quite low. It is also quite easy for companies to obtain credit. The general ease of doing business has made Australia quite attractive to investors.”

Australian business leaders were most optimistic about the healthcare and energy sectors.

Over one in five believed energy was the sector with the top innovation-drive growth potential, compared to only 16% globally.

They were also bullish on healthcare, with 17% thinking it had the top potential, compared to 13% globally.