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Brisbane’s innovation juggernaut keeps rolling, but how long? (Skilled labour shortages overtakes funding as a key concern for businesses)

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Brisbane’s innovation engine is humming right now but could soon be spluttering for want of a key driver – skilled labour. At least that is the fear of businesses in Queensland’s capital.

First, the good news on the Brisbane Innovation Scorecard (based on a survey of 372 firms, developed by Brisbane Marketing in partnership with accounting firm Deloitte and others).

  • Culture of innovation. The majority of Brisbane firms – across all industry sectors and sizes – are actively innovating, with 65% of the firms reporting at least one innovation in the past three years; 372 businesses reported a total of 704 distinct innovation activities.
  • Partnership is key. About 43% reported engaging in formal or informal collaboration in the past three years. That is more than double the 22% reported in the 2008- 09 ABS national survey.
  • Global benefits. Product as well as process innovation helped Brisbane businesses compete globally, adding to international sales.
  • Open innovation. The scorecard demonstrated clear benefits of an “open” approach to innovation, as businesses leveraged internal creativity as well as external sources, including the Internet.

“My vision is for Brisbane to be a smart thinking, easy living, world class city and by encouraging innovation we are providing the competitive advantage needed to realise this goal,” Lord Mayor Graham Quirk said on July 21 after releasing the scorecard to over 300 business leaders.

John Aitken, chief executive officer of the city’s economic development agency Brisbane Marketing, cited innovation by the energy and mining sectors.

“Our Brisbane-based mining and energy sector and the related specialised manufacturing and service industries are responsible for the majority of the world’s innovation in mining technologies. This innovation and its associated collaboration are serving to define our new world city approach,” he said.

The scorecard is a collaboration between Brisbane Marketing, Deloitte, University of Queensland Business School, Brisbane City Council, DEEDI (Queensland Government) and Enterprise Connect (Australian Government). It used standards and methodology developed at Cambridge University’s Judge Business School to measure the city’s innovation and its effects on growth, productivity and the region’s economic prosperity.

The second edition of the innovation survey listed the following as leading innovators this year:

•    Rio Tinto, one of the world’s largest mining companies
•    V-TOL Aerospace, robotic airborne intelligence experts
•    Eidos Institute, a public policy think tank
•    Restaurant Two
•    The Electrical and Communications Association; and
•    Aspect Property Group, a housing developer

Firms employing more than 20 employees reported overall higher levels of innovation activity but 37% of firms employing less than 20 workers reported a larger share of novel – or “new to the world” – innovation, suggesting firm size was no barrier to innovation. About 92% of the surveyed firms employed 20 or fewer employees.

The bad news on innovation

Now the bad news. This innovation, businesses fear, may be increasingly harder to sustain because of a shortage of skilled labour, a major driver. Last year, a majority of the 100 surveyed businesses listed funding as the biggest barrier. But this year, a majority of the 372 firms cited availability of skilled labour, calling it the biggest threat to further innovation.

The perception of Brisbane businesses is echoed across the nation, notably in Western Australia. A recent salary survey by the Australian Institute of Management found that nearly two-thirds of large companies across the nation are considering immigrant workers to overcome the skills shortage in a diverse range of industries.

The call, ironically, comes months after the Clarius Skills Index, compiled by KPMG Econtech, showed a drop in demand for skilled labour in the December quarter. But Clarius chief operating officer Kym Quick says the situation has dramatically changed since because of the natural disasters in Queensland and Victoria.

“While the threat of a skills shortage had a temporary reprieve, we expect recent natural disasters will quickly turn that around and we will have greater demand for skills stretching over several quarters,” Quick told The Canberra Times.

In the circumstances, it is conceivable that Brisbane and the rest of Queensland may be worse hit than many other parts of the country on account of the need to rebuild after the recent devastating floods. It would be curious to see how Brisbane businesses respond to this challenge that could make or break the region’s robust innovation process.

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