Prime Minister Malcolm Turnbull campaigned recently on an innovation agenda, and NAB’s recently-released NAB Labs Business Innovation Index concludes that a culture of innovation is crucial to Australia’s next wave of economic growth.
It was widely postulated that the Prime Minister’s recent federal election campaign message of jobs and growth via innovation left many voters cold – or worried. But according to the National Australia Bank, Australia’s next phase of growth must indeed be defined by ideas, creativity and execution by people and businesses that are adaptive, agile, thought leaders and doers. Our future, in short, lies in our ability to foster a culture of innovation.
The inaugural NAB Labs Business Innovation Index found that innovation may be underestimated, with many businesses innovating continuously to survive and prosper but few calling this “innovation”. Instead, according to the report, they talk about “improvements”, “changes” and “adjustments” to their everyday processes, products or services.
The NAB Labs Business Innovation Index is based on what a business does “differently”, “more quickly”, and “more cost efficiently” – behaviours that are at the very heart of innovation. It measures innovation across all business sizes and sectors. Overall, Australian business scored 67.6 for innovation (out of 100). But the overall index masks differences in innovation by business size, industry and location. Large business scored highest overall for innovation (73.1) and also leads across all sub-components of the index – especially for doing things differently and more quickly. However, micro-businesses were the next most innovative group (69.1), and were equal strongest for cost efficiency with large business.
Why businesses innovate
Across business sizes and industries there were some common themes in relation to why innovation is important. These were:
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Opportunities to deliver a better experience/service/product to customers |
| Opportunities to drive productivity and reduce costs | |
| Defending your business from innovating competitors | |
| Defending your business from innovating competitors |
While all businesses were primarily driven “opportunities to deliver a better experience/service/product to their customers”, 100% of large businesses said this was their key driver.
Significantly more large businesses were also driven to defend their business from entrants.
$1.1 billion National Innovation and Science Agenda
In December last year the federal government unveiled its National Innovation and Science Agenda, with the aim of creating a modern, dynamic, 21st century economy for Australia.
“Our (economic) fundamentals are strong, we are in our 25th year of consecutive economic growth, but, we need new sources of growth if we are to maintain our high standard of living, high wages and generous social welfare safety net,” said the Prime Minister at the time of the Agenda launch.
“Although there are challenges, there has never been a better time to start and grow a business from Australia, which can now compete for customers located anywhere in the world.”
“Companies that embrace innovation, that are agile and prepared to approach change confidently and with a sense of optimism are more competitive, more able to grow market share and more likely to increase their employment.”
Based on NAB’s Labs Business Innovation Index survey it seems that businesses, at least, are listening.
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