Queensland Economic Advocacy Solutions

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If only there was another word for innovation

Last week the Australian Bureau of Statistics released their latest snapshot of Australian business innovation.

Innovation is a widely used term but not necessarily widely understood particularly by small business.  It is defined as the development or introduction of new or significantly improved goods, services, processes or methods. Innovation can be seen in a variety of forms, from a major breakthrough such as creating and bringing a new product or service to the market, to a series of smaller innovations such as finding better or more efficient ways of working and becoming more profitable.

As innovation is often seen as a continuous process and aspects can be intangible, it can be incredibly difficult to measure however the ABS goes about doing this by asking businesses whether they are engaged in innovation activity. Key points from ABS include:

  • The number of businesses engaging in innovation activity is increasing across Australia;
  • Almost two in five businesses introduced innovation activity into their business in 2016-17;
  • Larger businesses are unsurprisingly more likely to engage in innovation than small business but innovation in small businesses is still widely prevalent despite not being regarded by them as innovation;
  • The main benefits of innovation are in the areas of increased revenue and improved customer service;
  • The main impediments to innovation particularly for small business are lack of additional funds and skilled persons; and
  • Over half of all innovation-active businesses sourced their ideas and information for the development of innovation from within the business or another owned by the same company.

The results confirm that innovation is evident in many small businesses yet when talking to them many do not see themselves as innovative.  Unfortunately but understandably many small businesses roll their eyes when the word innovation is mentioned  – in short it is a term that has been overused and the programs that have been provided by Government have not hit the right audience. If only there was another word for innovation that does not conjure up confusion and also frustration following an innovation agenda across both Commonwealth and State Governments targeted towards start-ups and 'Tier One' innovation to the detriment of existing Queensland small businesses.

A key take away is that innovation needs to be redefined and refocused as more than just 'Tier One' activities such as R&D and applying for / or registering a patent for a new product or technology. Programs need to pivot towards the adoption by small businesses of everyday operational processes or adaptation or progression of process and methodology.  When this occurs small businesses will think considerably more favourably upon the rhetoric surrounding innovation.

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