Victorian businesses most likely to be innovating are led by management driven by passion and the challenge of building an enterprise. Research from Commonwealth Bank shows that while these businesses are driven more by vision than wealth creation, innovators in the state tend to outperform their peers financially.
Victorian businesses that have implemented an innovation estimate it adds on average $455,000 to the bottom line. This is around 11 per cent higher than the national average of $405,000 in estimated improved company earnings from innovation.
Businesses that are innovating also tend to be supported by a workforce that is curious and unafraid to challenge the status quo.
The findings come from analysis of Commonwealth Bank’s Business Insights Report: Unlocking Everyday Innovation which surveyed 535 Victorian businesses, measuring attitudes and practices related to business improvement and innovation.
“True innovators are driven by a clear vision and genuine commitment to not only navigate change but to benefit from it,” says Adam Bennett, Group Executive, Business and Private Banking at Commonwealth Bank. “Innovators constantly strive to do better and this is something we see every day when we’re dealing with clients across industries and regions.
“Although Victorian innovators are not primarily motivated by wealth creation, the research shows it is a by-product of their ingenuity and businesses that innovate are roughly $450,000 better off.
“When compared to the national average, businesses in Victoria might be generating greater returns from their innovative endeavours but the proportion of businesses that are innovation active is on par with the national trend,” says Mr Bennett.
The research comes as Commonwealth Bank prepares to open its Pop Up Innovation Lab in Melbourne. Between Wednesday 2 and Friday 25 August 2017, the Innovation Lab will host a series of keynote events, developer sprints, design jams and workshops to help more businesses in the state understand and put innovation into action.
Innovation in Victorian business
Key findings and analysis of the Victorian data from Commonwealth Bank’s Business Insights Report: Unlocking Everyday Innovation
- 81 per cent of businesses claim to innovate but when tested against the OECD international standard*, only 42 per cent are innovation active.
- 58 per cent of businesses that are pursuing their vision, dream or passion are innovators. 50 per cent of businesses who are motivated by the challenge of building a successful business, and 41 per cent who are driven by wealth creation, are also innovation active.
- Businesses that are most likely to be innovating are medium sized and 45 per cent of those with a turnover between $2 million and $20 million are active innovators. 41 per cent of both small ($500,000 to $2 million) and large ($20 million+) organisations are also innovation active.
- Start-up and established businesses are the most likely to be innovation active – 45 per cent of businesses operating for less than five years and 44 per cent of those more than 20 years old are active innovators. Meanwhile, 39 per cent of those aged between five and 10 years, and 38 per cent of 10- to 20-year-old businesses are active.
- The greatest concentration of innovation is taking place in processes where 17 per cent of businesses are active, followed by organisational (16 per cent), product (11 per cent) and marketing (10 per cent).
- Innovation active businesses are more likely to encourage employees to ask questions and challenge the status quo (34 per cent of innovation active businesses versus 23 per cent of businesses that are simply improving and 17 per cent of businesses that are not innovating).
- The estimated improvements in company earnings from innovation are approximately 11 per cent higher than the national average ($455,000 compared to $405,000).
About the research
Commonwealth Bank Business Insights Report: Unlocking Everyday Innovation is a wide-ranging quantitative survey of 2,195 business owners, decision makers and managers. Participants were drawn from businesses across Australia with an annual turnover of over $500,000 and at least two employees. Of the total sample, 535 businesses were Victorian.
The survey was designed to benchmark the innovation performance of each business, identifying the key motivations and drivers influencing their performance, and highlighting best practice. It was conducted on behalf of the Commonwealth Bank by DBM Consultants between August and September 2016, with further analysis by the Commonwealth Bank.
* Using the guidelines for innovation outlined in the OECD’s Oslo Manual, the report defines innovation as a new or significant improvement in one of the following four areas – products and services, business processes, organisational methods and marketing practices.