A new report shows Australia has improved its global ranking in the innovation stakes, moving from 16th spot to 13th spot, although access to venture capital and public funding remains a problem for start-ups.
The findings come from the third annual GE Global Innovation Barometer, a survey of 3,100 senior business executives in 25 countries, including 100 respondents in Australia.
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It investigates the perception of business leaders towards innovation in their own countries as well as internationally.
The barometer shows Australia has improved its global ranking as an innovation-conductive market, moving from 16th place in 2012 to 13th place in 2013.
Australia ranks ahead of a number of a growth markets such as Russia and Brazil, but lags behind the United States, Germany and Japan, which make up the top three.
“Overall, Australia’s innovation framework is perceived as strongly ‘innovation-conducive’ by 52% of business executives from the 25 markets surveyed,” the report said.
“When evaluating their own market, 67% of Australian business executives reported that their country has a strong innovation-conducive environment overall.
“[This indicates] that Australia’s perception of its innovation capacity slightly exceeds global perceptions.”
The survey shows Australian businesses are becoming more collaborative – 92% of Australian business leaders agree innovation success rates are higher through partnerships.
Encouragingly, 92% of Australian business leaders also believe small and mid-market companies can be just as innovative as large companies.
Australia ranks highly on a number of key indicators of a leading innovation market, including the quality of its research and educational institutions.
“Australia’s high ranking in corporate ethical behaviour is also helping to foster an innovation-conducive environment,” the report said.
“However, Australia’s skills shortage, especially in the sciences and engineering, is a significant barrier to innovation and collaboration.
“Although the quality of Australia’s educational institutions… ranks highly, the availability of scientists and engineers in the country is notably lower than the global average.”
The report also highlights hurdles for companies with regard to access to capital.
Almost 90% of Australian respondents say the country’s financial environment should be more open to venture capital, while more than half want to see simplified processes for companies seeking to access public funding.
“Furthermore, only a third of respondents agreed that private investors support business innovations – a result 21 points below the global average,” the report said.
“Nearly half (46%) of Australian leaders think that the speed of commercialisation for new products is inadequate.”
Steve Sargent, president and chief executive of GE Australia and New Zealand, said Australia has made strong progress in improving its innovation capability, but needs further investment.
“We are a high-cost, high-value country,” Sargent said in a statement.
“But by investing in innovation, we can turn that into our advantage by creating new models, processes and technologies that will… drive Australia’s economic growth for the long term.
“Innovation is key for Australia to fully capitalise on the opportunities of the Asian Century.
“Last year, the Australian government set a goal to have an innovation system in the world’s top 10. This report shows that we are on the path to achieving that.”
Greg Combet, Minister for Industry and Innovation, said the barometer findings are a timely reminder to industry and government of where action is still required.
“The Australian government will announce further initiatives to support innovation in its forthcoming Industry and Innovation Policy Statement,” Combet said in a statement.
“This will ensure Australia is well placed to continue improving the innovative performance, productivity and competitiveness of our industries.”