The report from the CSIRO and the University of Queensland found only about 9 per cent of Australian innovations were market-leading and only about half of Australia’s companies had released a new product in the past three years. It said Australia was a nation of adopters, but not creators.
The report authors said technological change that created new products and services was at the heart of the growth miracle of modern economies and the pandemic was likely to create even faster change as traditional business models were overturned.
“The average lifespan of an S&P500 company is now less than 20 years. It was 60 years in the 1950s,” the report said and cited examples of Nokia and Kodak.
“Competition is stiffer and companies must innovate to avoid dangers like incumbent disruption.”
“We want to convince Australian companies of the benefits of innovation which will help spawn new products, break into new markets and develop new industries to improve our prospects as a nation in the long-run,” the report said.
Almost 60 per cent of Australian board members admitted that innovation had never, or only rarely, been a board agenda item.
“Our ASX is dominated by the resources sector – where firms often pour millions into megaprojects. In light of such risk taking, innovation is often viewed as the enemy.”
It found there were four factors that drove the performance of the top 10 per cent of the ASX.
They were innovation novelty, introducing new products, processes and business model innovations, collaborative breadth and corporate entrepreneurship.
It found that of those four, entrepreneurship was the leading factor by a big margin and “should be the primary focus for firms wanting to play at the top”.
The report said adopting mature technology helped a company compete, but not win, and this was exactly how the average Australian company operated.
“Most companies are not using less mature _ but potentially game-changing _ technologies,” it said.
“This is a missed opportunity since emerging, less mature technologies could be sources of innovation novelty in certain industries and markets.”