A lot of people are making fast and loose with the term “innovation”. But what is it exactly?
It seems that the world over, innovation is becoming the hot management topic of the decade. CNBC has just launched a TV show dedicated to it, consulting and even accounting firms are claiming expertise in it, governments are beginning to recognise its importance, and industry associations are lobbying for hand outs to help them get better at it.
And rightly so, because it seems that Australia is not very good at it. A recent study from Forrester Research rates Australia with Poland and Hungary near the bottom of a long list.
One of the most glaring shortcomings of the whole topic of innovation is that there is no common definition of what it is and what it is not. You could ask ‘So what? but unless innovation can be accurately defined, how can we hope to get better at it?
And in the meantime, industry wastes enormous resources on products and services that fail, governments and public institutions waste loads on scientific research that has no tangible benefits to Australian consumers, and they continue to give tax breaks and incentives for education, training and the like to businesses that simply do not innovate.
I’ve spent some time trying to find some common themes around the definition of innovation, but have been left quite breathless and unfulfilled. Innovation Queensland links the term closely to commercialisation, numerous sites claim that it is about invention, and job ads on Seek even link it to project management in vocational training.
The Business Council of Australia defines it at a very high level while even our own SmartCompany seems to have trouble establishing the difference between an innovator and an entrepreneur (after all, what’s the difference between Giles and Yeenan ?)
We seem to be using innovation as a catch-all term to describe the process of growing revenue: sales volume and price, mostly from new or improved products, services or business processes.
And often it includes product development, scientific research, raising capital, brainstorming ideas, invention, entrepreneurship and nearly anything else you care to throw at it.
Rather than boiling the proverbial (blue) ocean, let’s define it at its most granular level, then we can dissect it and understand why it’s not working.
Let’s break down the process that starts with the formulation of corporate or business strategy and ends up with uniquely valuable (Australian) products and services in the hands of global customers.
Let’s find the blockages in the revenue generation pipe and work on them first. And while we’re at it, let’s find the leakages, save ourselves some serious corporate and government funds and reinvest it where it can actually make a difference to our future competitiveness.