Bruce Burton

Australia’s R&D effort does not simply need more money to prevent product failures. It needs a closer focus on market research.

We need R&D quality, not quantity

Australia is falling behind OECD economies in its proportional spending on R&D, according to Senator Kim Carr, opposition spokesman for industry, innovation, science and research. Senator Carr’s comments were reported in The Age in early April.

Carr implies that this is a major threat “not just to manufacturers, but to our economy”. He and interest groups such as the Australian Industry Group believe that increasing Government spending on R&D and increasing tax concessions will improve the outcomes of innovation.

Do these people believe that we can be significantly more competitive with China, Japan and the US simply by spending relatively more than they do on R&D? Are they suggesting that we can buy our way out of trouble simply by creating more new products, technologies and business processes than our competitors?

The last time I looked, at least seven out of 10 new products and technologies fail globally despite the burgeoning R&D expenditure. So simply spending more money on R&D in Australia without reducing these enormous product failure rates is folly at best and negligent at worst.

Australia would do well to live up to its (self-proclaimed) title as the clever country and reduce failures rather than trying to be faster and more efficient at producing new technologies.

Australia has some great scientists and produces great technology. But sadly too many products and technologies produced by science and enterprise are created in the absence of customer focus.

Without an ability to find and prioritise the unmet needs of customers, innovation takes place in a vacuum. In my experience, product failure rates can be dramatically reduced simply by understanding the needs of customers before new product and service concepts are even contemplated. And rather than throwing more money on the R&D fire, perhaps Governments and enterprise should focus on market research rather than scientific research.

Your thoughts?

Bruce Burton is the CEO of the Asia Pacific offices of Strategyn, a global innovation management consultancy and the creators of Outcome Driven Innovation