The government’s innovation statement speaks largely to the research and startup communities. Kate Eriksson, Head of Disruption at PwC, rallies corporate enterprises to make their mark.
If you spend any time in the corporate sector, last week’s National Innovation and Science Agenda has left two questions still hanging in the air.
The first, looking out, is: what’s the role of corporates in bringing Australia to the dais as a world class innovator?
The second, cupping your hands and looking into the window of our major corporates: did the government just announce a set of innovation initiatives of relevance for the whole country, for which you have a lesser or no plan?
Corporates have their part to play, too. Before I delve into what that means, there are a couple of general themes or cultural aspirations of the innovation statement that are worthy of comment. (Forgive the sweeping generalisations.)
an ‘ideas boom’
For corporates, the emphasis might be better placed on entrepreneurialism and curiosity. The majority of people we meet are full of ideas – it’s the quality of them, and the ability to deliver, that’s less abundant. The ideas must be bolder and re-imagine new experiences or industries… otherwise ideas are just ideas and strategy is just strategy.
Shortly, we might move on from thinking about certain things as a ‘failure’ – at least in the case of big business.
Imagine we’re at the Olympic diving finals with our corporate bathers on, as the world watches us face-plant the concrete poolside (aka ‘fail fast’). That analogy is more relevant to large-scale transformation projects today, the ones that build great expectations and may not deliver results.
If our approach and our skills are on track, then designing, validating, pivoting and re-assessing whether or not to continue, will be the normal way to work. If you drive somewhere, find out the road is closed and have to take another turn, have you failed? Not really. There’s the difference.
Now, turning to some themes from the innovation agenda, there is a position for corporates to take in the new charge for a bolder, more innovative nation:
The innovation statement addresses secure science investment, coding in schools, CSIRO funding, summer schools and diversity.
Corporate considerations: How your organisation can secure STEM skills or grow the skills base is critical for success: 74% of Australian CEOs cite shortage of the right skills as the greatest barrier to achieving growth targets. Investment bank Goldman Sachs recently reported that a third of its workforce – 11,000 people – are engineers. The STEM skills shortage is not just a government problem.
The corporate contribution: Corporates can stimulate demand and pull-through for jobs; they can promote the vibrancy of possible roles that require STEM skills and they can actively re-skill parts of their workforce. They can also mentor teachers and schools by providing real-world business applications. Given the speed of technology, at some stage the lessons of school or formal learning must be gained in situ.
The innovation statement addresses tax breaks, venture funding and university funding.
Corporate considerations: Businesses should assess whether their existing funding and governance models are available in a flexible and timely form. Do the justification overheads at the early stages outweigh the size of the experiment? Could a portfolio approach ensure there is both a percentage of high risk breakthrough ideas and incremental ones?
Increasingly, corporates are exploring and benefiting from enterprises that essentially disrupt their core business. Therefore new mechanisms for venturing, pilots, and beta testing in order to get to market and learn as quickly as possible in a live environment – even if under a different brand – could more quickly give the new venture a commercial life of its own. Better that than failure to get to market at all because of losing momentum to clunky existing protocols.
The corporate contribution: Corporates have a greater role to invest in and fund startups in Australia than has been addressed in the innovation statement. They can do this through AusIndustry’s Early Stage Venture Capital Limited Partnerships programme (ESVCLPs), through partnering, or through procuring the startup’s services to give it a market to commercialise as well as obtain global custom.
The innovation statement addresses collaboration between universities and industry, government as an exemplar, collaboration spaces and visas.
Corporate considerations: Corporate scorecards should measure the level of collaboration with external or non-traditional partners for their organisation. PwC research shows that 64% of organisations look externally for new ideas and those with the highest revenue growth collaborate three times more than their counterparts.
The corporate contribution: Corporates have a huge role to play in collaboration with startups, for example:
- Teaming up with innovative startups to use their services or solutions – for example, cloud storage, facial recognition, or video billing – in larger initiatives.
- Partnering to offer an ecosystem, eg payments, health, or the internet of things.
- Open innovation. The Startup Muster 2015 report showed that 12% of startups in Australia began through hackathons or startup weekends.
- Providing co-working and incubation real estate.
The main reason corporates could contribute to the innovation agenda and Australia’s leadership and growth offshore, but don’t do so with more impact, is probably because to do so is simply not in their mission or priorities.
Extending growth to Asia appears, on the surface, to be part of the plan for many corporates. However, how much of this is about taking new initiatives and innovations into that market? Often, large Australian corporations are focused on taking existing IP into the Asian market instead of developing new services for the region.
By that turn, it is likely that we rely so much on startups or research and science bodies for Australia’s growth and global innovation leadership because they are driven by a vision and passion to solve for world problems.
The only missing ingredients for startups and science to accelerate a thriving, innovation nation for Australia are commercial acumen, access to first customers, office space for incubators to take over, and funds (or super funds). I wonder where in our ecosystem we have an abundance of that?