How innovative is your organisation? It’s a simple, yet extremely telling question that can shine a light on whether or not your organisation can afford to be complacent when moving through times like these.
If the pandemic has taught us one thing – aside from the importance of hygiene and of course, social distancing – it’s that innovation is an absolute necessity when it comes to navigating through a tricky business environment. It’s one of the few prerequisites to success during a profoundly distressing time like a pandemic, where it’s essential to inspire current and future customers with the quality of your products and services and your commitment to innovation as you move into the future.
While browsing the web recently, I was scoping out the Australian Bureau of Statistics’ (ABS) website, where I found an extremely interesting report called the “characteristics of Australian business.” While this report pre-dates the COVID-19 pandemic, it remains one of the most telling indicators as to whether or not an organisation can stand the test of time, and the test of something like the dynamic nature of business during a time of uncertainty and crisis.
The report took things like business finance, performance indicators, markets, skills, use of IT into account, but most significantly, it mapped out what it called ‘business innovation,’ and ranked sectors within the Australian economy in terms of how ‘innovative-active’ they were.
The results are extremely interesting.
First of all, the ABS defined ‘innovation-active’ businesses as “one which has undertaken any activity during the reference period including: introduction of any type of innovation; and/or development or introduction either still in progress or abandoned.”
The ABS found that 44% of Australian businesses were innovation-active, with wholesale trade and manufacturing taking out first and second-place with innovation-active scores of 61% and 59% respectively.
Overall, 37% of Australian businesses “introduced an innovation, with 17% of businesses introducing a goods and/or service innovation and 32% of businesses introducing a process innovation.”
The ABS also mapped out ‘process innovation’ for the first time, which wholesale trade, information media and telecommunications, as well as manufacturing taking out the podium with 44% and 40% respectively. The ABS adds that “nearly one in four businesses (24%) had an innovation in development, while one in eleven businesses (9%) abandoned innovation.”
The ABS also wanted to understand why 9% of Australian organisations were abandoning innovation, with the results showing that it came down to one simple thing: money. “Lower profit margins to remain competitive” was the most common barrier to innovation for around 21% of businesses.
The ABS adds that “nearly a quarter of innovation-active businesses (24%) reported a lack of access to additional funds as a barrier to business performance and activities compared to 9% of non-innovative active businesses.”
“15% of businesses with 0-4 employees reported a lack of access to additional funds as a barrier to general business activities or performance, compared to 8% of businesses with 200 or more employees,” the ABS concluded in its report.
I also stumbled upon an old volume from the National Center for Science and Engineering Statistics, who mapped out rates of innovation across 1.3 million non-profit organisations in the US. Authors Audrey E. Kindlon and John E Jankowski write that “fifteen percent of an estimated 1.3 million non-profit companies introduced one or more product or process innovations” across the span of two years.
They go on to explain that rates were higher in the manufacturing sector, signifying the need to innovate in the more competitive space. “Thirty-two percent of companies classified as manufacturing reported one or more product or process innovations… these innovation rates are more than double those for the full 1.3 million population of companies.”