A significant decline in investment is just one of the major barriers preventing businesses from pursuing innovation, according to the CSIRO.
Its Value of Science and Technology Report identified five key barriers to realising value from innovation as well as suggested several solutions, based on interviews with private and public sector leaders and extensive analysis of trends in the Australian economy.
Those five key barriers are:
- Declining innovation investment
According to the CSIRO, business investment in innovation has declined by 30 per cent in the past decade as businesses seek long-term clarity on what to invest in and are instead investing smaller amounts on shorter-term goals.
- Poor research commercialisation
While Australia is home to world-class researchers, the report revealed that as a whole, our nation struggles to commercialise lab breakthroughs into innovative products in market, a problem “exacerbated by a cultural aversion to risk and low collaboration between research and industry”.
- Skills gap
The CSIRO stated that while the Australian education system is high quality by international standards, “we don’t have a culture of ongoing training for employees outside of formal education”.
- Resistant to overseas ideas
While businesses do invest in keeping up with competitors in Australia, the CSIRO noted them as rarely keeping up with overseas competitors, “placing us behind them on customer value and productivity gains”.
- Wariness of new technologies
According to the report, some businesses view investment in innovation “as the road to automating jobs”, which has the effect of widening the gap between the most profitable and least profitable businesses, and resulting in big royalties for a few but bigger losses for others.
CSIRO Futures lead economist Dr Katherine Wynn said while there are barriers to innovation, they can and need to be overcome if Australia is going to emerge stronger from the COVID-19 pandemic.
Acknowledging science and technology as having played a key role in supporting Australia’s growth and productivity, and citing examples such as Google Maps to address her point, she has observed that a recent drop in innovation investment has coincided with a slowing and weakening economy.
“And now we’ve been hit with COVID-19, science and technology are more critical than ever,” she said.
But it’s not all bad news, with the economist indicating that “if businesses act now, there are plenty of opportunities to enhance how they navigate the innovation cycle and realise greater value from their investments, including improved productivity, protection from market shocks, stronger international competitiveness, and social and environmental benefits”.