2006 APEC SME Innovation Leader Workshop. Innovation Policy (management innovation) 7 November 2006

Transcription

1 2006 APEC SME Innovation Leader Workshop Innovation Policy (management innovation) 7 November 2006 Judith Zielke General Manager, Innovation and Collaboration, AusIndustry

2 SME management innovation The aims of this presentation are to: provide participants with the opportunity to learn about SME management innovation policy and programs in Australia look at business skills development: why are they important? look at programs offered by Australian state and federal governments workshop the design of the Commercialising Emerging Technologies (COMET) program

3 Population distribution 30 June 2004

4 Australian industry sectors as proportion of GDP 12.00% 10.00% Agriculture, forestry and fishing Mining Manufacturing Electricity, gas and water supply Construction Wholesale trade Retail trade 8.00% Accommodation, cafes and restaurants Transport and storage Communication services 6.00% 4.00% 2.00% Finance and insurance Property and business services (c) Government administration and defence Education Health and community services Cultural and recreational services Personal and other services Ownership of dwellings 0.00% Taxes less subsidies on products Statistical discrepancy

5 Proportion of businesses innovating by industry, Mining Manufacturing Electricity, gas & water supply Construction Wholesale trade Retail trade Accommodation, cafes & restaurants Transport & storage Communication services Finance & insurance Property & business services Cultural & recreational services Per cent

6 BERD/GDP ratios of APEC/OECD countries % % % % % OECD ranking Japan Korea USA Canada Australia New Zealand na 0.42 na 0.49 na 20 Total OECD

7 Business Expenditure on R&D (BERD) BERD in increased for the sixth consecutive year to $ million (current prices), an increase of 10.4% on , compared to a 10.2% increase the year before. In chain volume measures (adjusted for inflation), BERD increased by 7.1% in from $ million in BERD as a percentage of GDP increased to 0.95% reflecting Australia s continued strong growth in BERD while also experiencing strong growth in the economy. As a result, Australia has improved its BERD/GDP ranking in the OECD from 15th to 14th. Human resources devoted to BERD increased by 6.6% in The increase was driven by increases in Mining (23% - 14% of total BERD), Finance and Insurance (22% - 10% of total BERD) and Manufacturing (4% - 41% of total BERD). The value of R&D performed by small businesses (<20 staff) remained about the same as in and contributed 13.5% to total business R&D. Large businesses (>200 staff) increased their R&D expenditure by 15% and accounted for 65.5% of total business R&D.

8 Australian Business Expenditure on Research and Development by Employee Size 200 or more persons Persons 5 to 19 Persons Less than $Millions

9 GOVERD/GDP ratios of APEC/OECD countries % % % % % OECD Ranking Korea USA New Zealand na 0.37 na 0.33 na 7 Japan Australia 0.34 na 0.32 na Canada Total OECD

10 GOVERD/GDP ratios of APEC/OECD countries Korea USA New Zealand Japan Australia Canada Total OECD

11 Australian Business Innovation Policy

12 Australian Government Innovation Policy Call to review the effectiveness of Australia's science, engineering and technology base in supporting innovation and commitment to hold an Innovation Summit National Innovation Summit 2001 Backing Australia's Ability, 2001 Innovation Statement 2003 Mapping Australian Science and Innovation Report provides an overview of the science and innovation system in Australia 2004 Backing Australia's Ability: Building Our Future through Science and Innovation, 2004 Innovation Statement

13 Mapping Australian Science and Innovation Report Key findings: entrepreneurial managers in the early stages of company development do not understand what is required to build a sustainable business the depth and quality of entrepreneurial management pool is currently too shallow lack training in the successes and failures of starting up a high growth company lack training opportunities to address the special needs of the highgrowth sector

14 Patterns of Innovation in Australian Businesses Joint survey Department of Industry Tourism and Resources and Australian Bureau of Statistics. Published in January 2006 and looks at the three years ending December 2003 Innovation was undertaken by 34.8% of businesses 21.4% of businesses undertook new or significantly improved organisational or managerial processes.

15 Innovation indicators for Australia Public R&D Scientific & technical articles per capita US patents per capita Business R&D Tertiary education Science graduates in labour force Researchers in labour force Venture capital Investment in ICT Internet usage Investment in new equipment Foreign affiliates in manufacturing R&D International S&E collaboration MFP growth Innovation as a % of total sales * -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% Percentage difference from OECD average

16 Sources of Innovation in Businesses Within Business Other parts of Enterprise Group Clients Suppliers Consultants Competitors Universities and other institutes Government Agencies Non-profit research institutes Commercial laboratories Professional Conferences Web sites, Journals Other sources Internal Market Institutional Other Sources of Ideas Percentage of Businesses

17 R&D and non-r&d innovation expenditure in innovating Australian businesses Training 1% Market Introduction 8% Design Work 4% Acquisition of Intellectual Property 2% Other 13% Research & Experimental Development 31% Non-R&D Innovation 69% $ billion $5.8 billion Acquisition of Equipment 18% Introduction of Organisational/Managerial Processes 7% Introduction of Operational Processes 16%

18 Proportion of businesses undertaking organisational innovation by industry

19 Trends In Innovation Policy Cross Cutting Themes Flexibility and Availability of Support Australia's economic Opportunities are global Partnerships and Collaboration Promote Innovation Building the Capacity of Australian Firms Skills and Knowledge Transfer Non-R&D Innovation

20 Management Innovation

21 Management Innovation two streams Management of innovation Innovation in management behavioural change We will look at both streams, particularly at how policy and programs can lead to behavioural change in companies.

22 Innovation / Management Innovation what is it? The Australian Bureau of Statistics defined innovation as the process of introducing new or significantly improved goods or services and/or implementing new or significantly improved processes. Innovation has been classified into three categories: A new good or service means any good or service or combination of these which is new to a business. Its characteristics or intended uses differ significantly from those previously produced. A new operational process is a significant change for a business in its methods of producing or delivering goods or services. A new organisational/managerial process is a significant change to the strategies, structures or routines of the business which aim to improve performance.

23 Why are business skills important? Competition for investment to support business start-up and growth is strong and the number of interested investors is small Companies therefore must present themselves professionally and demonstrate that they have adequate processes, controls, systems, etc, and are prepared for due diligence assessments This isn't a beauty pageant! - business management skills are vital to successful business - confidence in a business leads to collaborations/strategic alliances and business growth

24 Management skills in Australia Australian research has identified that management skills need to be significantly improved to capture effectively innovation and growth in the economy. In 1995, for example, the Industry Task Force on Leadership and Management Skills found that: the proportion of Australian managers with formal training was very low compared with other major industrialised countries; and Australian managers were ranked poorly in terms of managerial skills by five major competitor countries (Japan, Singapore, Taiwan, Malaysia and Indonesia).

25 Australian Business Management Programs State governments provide programs at a more local level than the national government State government programs are usually complementary to national programs and could include Enterprise development workshops Business planning Business mentoring Business incubators There are regional differences due to population size, geographical spread, access to raw materials, historical circumstances

26 Australian Business Management Programs Federal programs include: National Innovation Awareness Strategy - Entrepreneurship - Business Planning Building Entrepreneurship in Small Business Commercialising Emerging Technologies Program

27 National Innovation Awareness Strategy (NIAS) The program aims to: raise awareness of the economic benefits of innovation and entrepreneurship encourage a wider interest and knowledge of science in the community promote the achievements of Australian's scientists and science teachers encourage business decision making based on an informed understanding of innovation motivate young people to pursue innovative and entrepreneurial careers Two target audiences: young Australians as the business people of tomorrow need to be aware of the skills that will be required to run innovative businesses SMEs as they are an important part of the innovation system of Australia, generating around 30 per cent of the nation's economic activity

28 Building Entrepreneurship in Small Business Four initiatives for service providers to deliver projects to small businesses Business Skills Training and Mentoring projects are to deliver entrepreneurial focused business skills development through a combination of training and mentoring services for small business owners and/or managers Succession Planning projects are to deliver succession planning skills development, through a combination of training and mentoring services, to help small business owners maximise the value and marketability of their businesses and to provide strategies to exit the business, while ensuring business continuity Incubators are to provide incubation services to small businesses through establishment and running small business incubators or the enhancement of existing successful small business incubators Small Business Field Officers are to provide a referral and general advisory service to small businesses, particularly those in areas of unmet need, through a network of locally-placed Field Officers

29 Commercialising Emerging Technologies (COMET) Program Business Advisers assist companies with commercialisation activities such as engagement of mentors, strategic & business planning, market research and IP strategies Assistance is available for up to two years to companies with turnover of less than $5m and less than 5 years old Two tier funding structure of up to $120,000 Up to $5,000 assistance to individuals to develop management skills to progress their innovation towards commercialisation

30 Government programs can affect company behaviour Allowed an upgrade of human resources. Improved availability of research equipment ts. Resulted in changes to co mpany manufacturing pro cesses. Lead to a more structured approach to R&D within our firm. Resulted in an increased recognition of the long term benefits of R&D. Disagree No change Agree

31 Case Study Commercialising Emerging Technologies (COMET) Program

32 COMET Program Objectives Increase Australia's sustainable economic growth through stimulating the successful commercialisation of Australian innovation Build sustainable and high-growth firms by increasing prospects for successful commercialisation of innovations through the attraction of capital and partners

33 COMET Program Provides funding for: - Strategic and Business Planning - Management Development - Market Research - Intellectual Property Strategy - Proving Technology - Working Prototype Grant funds pay for consultants/service providers to deliver these services to the company Oversighted by the Business Adviser

34 COMET delivery Delivery outsourced to network of private sector consultants contracted to AusIndustry Network employed for their high level of relevant experience and knowledge fifteen private sector Business Advisers and one private sector National Manager

35 COMET Business Advisers Assist with commercialisation planning and execution High level of experience and knowledge transfer to early growth stage firms mentoring role Assist with access to high quality tailored service provision Assist with access to capital and overcoming barriers to finance for commercialisation Assist with networks and channels for commercialisation (third party service providers) Assess applications and make recommendations for funding

36 TASK 1 Develop key performance indicators against which to monitor the outcomes of the program - e.g. number of companies commercialising products/services

37 TASK 2 Develop a reporting framework to collect data to report on key performance indicators

38 COMET's successes over the life of the program Over 1100 companies assisted to a value of $59.2m to date Over 200 products/services launched $371m in capital raised and 200 strategic alliances created 50% of COMET customers achieve a 20% increase in employment after two years 50% of COMET customers achieve a 20% increase in sales after two years 55% of all COMET customers achieved a commercialisation outcome

39 Thank you