Australians are more optimistic about the country’s innovation potential as a GE report reveals the country moved up three spots to 13th in the global innovation ranks.
Yet despite the jump, Australia still trails countries such as the United States, Germany and Japan.
The independent GE Innovation Barometer Report surveyed 3,100 senior business executives in 25 countries, including 100 respondents in Australia.
GE found the majority of Australian executives believed Australia’s innovation framework encouraged innovation: 67% per cent of Australian executives surveyed said they believed the Australian market is strongly “innovation conducive”.
Only 52% of global respondents thought so, indicating Australia’s perception of its innovation capacity exceeds global perceptions.
This time last year the GE survey found 31% of the 100 Australian businessmen felt the innovation environment had not improved over the past five years.
The report also found the majority of Australian business leaders thought Australia was struggling to commercialise new products and innovation, and access to public funding for innovation needed to be simplified.
Dean of the University of Technology Sydney business school, Roy Green, told SmartCompany small businesses have found the new R&D tax credit system a challenge to their ability to innovate.
“Certainly companies have complained about the new rules around the R&D tax credit.
“I don’t think the problems are insurmountable, it’s just a change and as people get used to the new regime, smaller companies are in a better position to take advantage of the tax credit than they were before,” Green says.
The report found most Australians agreed with Green, with 92% of survey respondents saying small and medium sized businesses were capable of being as innovative as the big companies.
The increasing availability of large amounts of data is allowing small businesses to innovate based on clear insights into the market and their customers.
Almost half of Australian business leaders said mining data inside and outside the company and developing their ability to leverage that data was a strategic priority.
Despite Australians’ greater appreciation of the need to innovate, Green says Australian businesses are good at integrating new innovative technologies, but struggle to develop their own.
“We’re definitely in the fast follower camp and we’re quite good at technology absorption.
“Locally we have a very strong science and technology community, but have a lot of trouble commercialising ideas in the market place compared to other countries.
“We’re not so good at originating ideas,” Green says.
He says Australia’s other problem lies in the venture capital market.
“Our venture capital market is not as highly developed as other countries.
“You don’t have to be as big a country as the US to have a strong capital market. There are many smaller countries that make capital available, for example Israel, Finland and Singapore.
“You have to ask a question about the role of our huge managed funds industry and the regulations governing their investments if new technologies, designs and approaches are seen as too risky in the context of their obligations,” Green says.
89% per cent of Australian respondents said the country’s financial environment should be more open to venture capital, 12 points higher than the global average.
The report also found one of Australia’s greatest challenges was in attracting and retaining talent, furthered by a shortage of scientists and engineers.
“We don’t sufficiently grow talent and creativity in our businesses and encourage it.
“I think there needs to be a greater understanding of the career paths for people in science and technology.
“They can be exciting and lucrative and can be the source of start-up entrepreneurial activities, allowing students to create their own job,” Green says.