Have you ever stopped to think about how many ideas you have each day? Probably thousands. Ideas like ‘I’ll take the dog for a walk before it starts to rain’.
If it rains, then that was a good idea.
Everything in life starts with an idea. There are good ideas and bad ideas. But stop to think for a moment about what makes an idea good. Perhaps a good idea has novelty, or could serve a useful purpose, or solve a problem. A good idea is one that will ‘work’. In the case of walking the dog, the good idea prevented its owner getting wet.
So what then is ‘innovation’? A good idea? No, innovation occurs when a new idea is applied to create an outcome of value. That value is most often measured in money, but not always. Non-monetary ideas exploited for societal benefit include public vaccination programs and the reduction of greenhouse gases. So innovation is the successful exploitation of a new idea, a positive transformation process.
From a business perspective, creativity and new ideas that have the potential to create value are important – they are the oxygen that all businesses need to survive. However, businesses can flourish only if those ideas are successfully exploited. They can be exploited by applying ideas to create new products or services, new operational processes, or even new business models. Innovation is as broad as the ideas themselves.
In Australia, survey data shows that barely more than one-third of Australian businesses report any innovation activity. If accurate, this is perilously low.
Innovating firms are the motor of the modern economy. Over 40 percent of innovative firms report growth in sales, compared to 30 percent of non-innovative firms. Innovating firms are more likely to export as well, with 65 percent of small and 85 percent of large exporters undertaking innovative activity.
Could so few firms innovate because they don’t really know where to start? The answer is right there before us. Innovation starts with ideas. That’s why, in this Year of the Idea, we are drawing Australia’s attention to the importance of ideas, and of creating value from the best of them. Just as early Australian pioneers created value from the wheat harvester and new strains of wheat, current pioneers are working on creating value from skin tissue therapies and cancer vaccines.
Yet, as a nation, are we valuing our ideas as much as we ought? In the 2004 Athens Olympic Games, Australia finished fourth on the medals table, but if there were such a thing as an Ideas Olympics, we’d probably only come in around 15th. Would we be happy with that? Are we really as innovative as we think we are?
For example, even after adjusting for the size of our economy (which of course is not done in the real Olympics), Australia ranks just 18th in its total expenditure on research and development (and, coincidentally, the same in our expenditure on education). We’re slipping further as well, with both India and China rapidly developing their competencies. We rank 13th on our share of US-granted patents, 11th on our share of world scientific publications, and 15th on the Innovation Index, a broad measure of innovation capacity. We do rank eighth out of 34 countries on an index of entrepreneurship and startup company participation. True, these are not all pure measures of creativity, but they are certainly indicative of our ability to create outcomes from ideas, the very essence of a ‘good idea’.
How did we come to shine as a nation at the Olympics? It first took a shocking performance (the Montreal Olympics) to galvanise action, when we began the hard yards towards improvement. Let’s learn our lesson this time before we’re hungry, and have no choice. I’d much rather contemplate good ideas on a full stomach rather than an empty one. Get behind Year of the Idea – we should be leaders, not followers!
Dr Rowan Gilmore is CEO of the Australian Institute for Commercialisation, a leading service organisation helping businesses, research organisations and governments increase the success rate of commercialising Australian innovation.
INNOVATIVE BUSINESS BUILDING PROGRAM – THE POWER OF 8
Want an ad like this?Begins 16 April 2012
5:30pm – 7:30pm | Castle Hilll
Eight of the most common challenges that businesses face will be tackled head on by 8 business specialists over 8 monthly presentations and open forum.
