Building innovative capability roy green mgsm university of adelaide october 14 2008
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Building Innovative Capability Roy Green, MGSM University of Adelaide, October 14 2008. NIS review: Why, what and how of innovation Can public policy translate this to innovative capability and performance at the enterprise level? TCF review: Policy prototype for capability building.

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Building Innovative Capability Roy Green, MGSM University of Adelaide, October 14 2008

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Building innovative capability roy green mgsm university of adelaide october 14 2008

Building Innovative CapabilityRoy Green, MGSMUniversity of Adelaide, October 14 2008


Building innovative capability roy green mgsm university of adelaide october 14 2008

  • NIS review: Why, what and how of innovation

  • Can public policy translate this to innovative capability and performance at the enterprise level?

  • TCF review: Policy prototype for capability building


Venturous australia building strength in innovation

Venturous Australiabuilding strength in innovation

Report and overview

available online at

www.innovation.gov.au/innovationreview


Building innovative capability roy green mgsm university of adelaide october 14 2008

“Ultimately, the purpose of a national innovation system is to transform knowledge and resources into dynamic capabilities at the level of firms and organisations, which are then better placed to contribute to the innovation performance of the economy as a whole”

Business Council of Australia/SKE, New Pathways to Prosperity, 2006


Building innovative capability roy green mgsm university of adelaide october 14 2008

Global ranking dashboard


Building innovative capability roy green mgsm university of adelaide october 14 2008

Trends in productivity and GDP growth

Components of Growth in Australian Living Standards


Why innovation

Why innovation

  • Innovation drives productivity growth and competitiveness of firms

  • Innovation promotes social inclusion through expanded opportunities

  • Innovation will contribute to achieving environmental sustainability


What drives innovation

What drives innovation

  • Innovation might mean new products or processes, or new organisational or business models

  • But the key to successful innovation in companies is investment in knowledge and innovative capability


Building innovative capability roy green mgsm university of adelaide october 14 2008

Australian government support for science andinnovation


Building innovative capability roy green mgsm university of adelaide october 14 2008

Government spending on R&D (OECD)


Investment in knowledge r d higher education software of gdp 2004

Investment in Knowledge (R&D, Higher Education, Software), % of GDP, 2004


Building innovative capability roy green mgsm university of adelaide october 14 2008

The world is not flat (Tom Friedman)

… it’s ‘spiky’

(Richard Florida)


Building innovative capability roy green mgsm university of adelaide october 14 2008

“Knowledge creation and diffusion are at the core of economic activity. Knowledge is embodied in people, and it is the quality of the human resources that will determine the success or otherwise of firms and economies in the years ahead.”

Enterprise Strategy Group, Ahead of the Curve, 2004


Share of high and medium high technology industries in manufacturing exports

Share of high and medium high technology industries in manufacturing exports (%)

Source: OECD


Ict trade balance

ICT trade balance (%)

Source: OECD


Building innovative capability roy green mgsm university of adelaide october 14 2008

  • EU Lisbon strategy: “the most competitive and dynamic knowledge-based economy in the world by 2010”

  • US: “Rising above the Gathering Storm”

  • UK: “Race to the Top”

  • Canada: “Benchmarking against Global Best”


Broad approach to innovation

Broad approach to innovation

Non-linear with multiple sources

More than science and technology

Incremental as well as breakthrough

Low tech and high tech industries

Driven by collaboration not silos

  • But…


Building innovative capability roy green mgsm university of adelaide october 14 2008

“The problem is… that the Lisbon strategy has become too broad to be understood as an interconnected narrative. Lisbon is about everything and thus about nothing. Everybody is responsible and thus no one. The end result of the strategy has sometimes been lost. An ambitious and broad reform agenda needs a clear narrative…”

High Level Group, Facing the Challenge, 2004


Findings of the nis review

Findings of the NIS review

Australia's innovation system will require:

  • greater international engagement

  • a more open and collaborative approach

  • a substantial increase in investment (private and public)

  • a more coherent and strategic ‘whole of government’ approach


Recommendations 1 research

Recommendations 1: research

  • Increase funding for PFRAs and the university research system (to 93/94 levels)

  • Full funding of university research

  • Increase stipend for PhD students

  • Substantial infrastructure funding - NCRIS successor

  • Open access to research and collections


Recommendations 2 business

Recommendations 2: business

  • New innovation support programs – Competitive Innovation Grants Program, Linkage Voucher Scheme, Knowledge Connections

  • Continue existing programs – IIF, PSF and COMET

  • Single interface for accessing program information across Australia

  • Standard program design principles

  • Innovation Australia to be central delivery agency for business programs


Recommendations 3 taxation

Recommendations 3: taxation

  • Replace the system of R&D tax concession with an R&D Tax Credit

    • Firms < $50million turnover – 50% credit

    • Firms > $50million turnover – 40% credit

  • Current 125% concession provides an effective benefit of 7.5 c/$

    • A 40% credit for large firms = 10c /$

    • A 50% credit for small firms = 20 c/$

  • The 175% premium tax concession and the tax offset would be abolished

  • Definitions to be tightened


Recommendations 4 governance

Recommendations 4: governance

  • Replace PMSEIC with a National Innovation Council

  • New Office of Innovation Assessment

  • New Research Coordination Council

  • Minister for Innovation to be joint signatory on all innovation Cabinet proposals

  • New National Centre for Innovation Research

  • Framework of principles for innovation interventions as basis for COAG process


Proposed governance framework

Proposed governance framework


Setting priorities for innovation

Setting priorities for innovation

  • Leveraging Australia’s natural endowments or competitive strengths

  • Identifying areas with Australian solutions to globally relevant challenges or markets

  • Creating scope to transform or reinvent existing industries and service delivery

  • Internationalising Australia’s innovation system through global integration and supply chains

  • Investing in innovation capabilities and supporting infrastructure at all levels


Workplace of the future tcf

Workplace of the future (TCF)

  • new products and services, drawing on sources of knowledge within and outside the enterprise

  • new operational processes, including relationships in global supply chains

  • new business models within the firm and in the ‘extended enterprise’ of networks and clusters

  • new approaches to marketing and sales as part of strategic repositioning

  • new work organisation, with high performance work and management systems


Australia s emerging narrative

Australia’s emerging narrative

  • Shift from ‘structural adjustment’ to the development of innovative capability at the level of the firm and workplace

  • “In the 21st century, innovation policy is industry policy” – Minister Kim Carr

  • But innovation policy is also a leadership and organisation strategy, requiring deep cultural change.


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