A growing chorus of business leaders, policy makers and market pundits have called on business to help drive productivity and economic growth in Australia, with innovation playing a leading role.
In today’s globally connected marketplace, individual business owners and their staff are more important than ever before to competitive position and outlook.
Encouragingly, we have seen businesses respond very positively, with many weaving innovation into the very fabric of their organisations. This has driven Australia’s overall business innovation performance higher.
Innovation on the rise
According to preliminary results from CommBank’s second annual Business Insights Report, to be released in mid-December, innovation across the nation has climbed substantially in the past 12 months.
The research has examined the presence of 15 entrepreneurial behaviours and management capabilities within Australian businesses and maps these on a scale called the CommBank Business Innovation Index.
In the past year the index has jumped eight points from 24 to 32 on a scale of -100 to 100 and there has been an increase in all but one of the 15 behaviours and capabilities measured to assess innovation activity. The research found that Australian businesses have now surpassed a crucial threshold that separates "general improvement" from "genuine innovation", represented by an index score of 25.
Shift in mindset
To look more closely at the innovation performance of businesses across the innovation index range, the research identified four distinct mindsets that classify businesses at different stages of innovation from the most innovative to the least: Disruptors, Harnessers, Adopters and Resistors.
In an exciting development, the research reveals that there is now a greater concentration of those businesses classified as top innovators, known as the Disruptors (index score of 75 – 100). This group has more than doubled in 12 months, albeit from a low base.
Conversely, the number of businesses with an index score of less than 25, the Resistors, have fallen 22 per cent although they still represent nearly 40 per cent of the group.
The spike in home-grown Disruptors displaying peak innovation performance is mainly driven by a shift in mindset. According to the research, these businesses displayed a number of identical characteristics.
Nearly all Disruptors conduct experiments and test new ideas (99 per cent), use formal processes to network outside their organisations (93 per cent) and are willing to take financial risks in the name of an idea (91 per cent).
Queensland leads the way
The research showed a varied performance across the states and territories.
Queensland achieved the highest Innovation Index score of 37.7 and saw the largest increase in the past 12 months (up from 23.7), surpassing Victoria/Tasmania, which now ranks second.
While Western Australia’s score improved modestly compared to 2016, it now ranks as the least innovative state with a score of 26.7.