Active innovation could see Australia’s regional business sector grow by $44 billion a year, a report by the Commonwealth Bank has revealed.
According to the Regional Business Insights Report: Unlocking Everyday Innovation Report, regional businesses surveyed in late 2016 are seeing an estimated $279,000 return from investing in innovation, which in turn injects $19 billion into the economy each year.
The report claims that if all regional businesses in Australia achieve the same return, the sector could grow by $44 billion a year.
According to Commonwealth Bank executive general manager of regional and agribusiness banking Grant Cairns, the report also demonstrates that regional business owners are beating their metropolitan counterparts at core innovation drivers.
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The report ranks businesses on an innovation index that is based on 15 core drivers, including experimenting and testing new ideas, hiring staff with creative in minds and allowing staff to take risks and fail. The higher the index score, the closer the firms are to “disruptive innovation”.
Regional businesses scored an average index reading of 25.5, which was two points higher than metro firms at an average of 23.6. The national innovation average was calculated to be 24.
The survey included 2,195 business owners, decision makers and managers, including 379 from regional Australia. The businesses have at least two employees and annual turnover of more than $500,000.
“They’re encouraging people to challenge the status quo and expecting them to come up with creative ideas, and by doing this, many regional operators are unleashing the innovation potential of their teams,” Cairns said in a statement on Thursday.
However, Cairns believes that while regional businesses are doing well at adopting new technologies and solutions, “truly disruptive innovation is still relatively rare”.
“Mastering innovation means making creativity and experimentation an essential part of your business’ DNA, rather than a one-off process improvement drive or product development program,” he says.