Innovation: The key to a strong Queensland economy

Innovation - the ability to reap the rewards of scientific achievement requires much more than the ability to turn a new idea into a working product. For Queensland manufacturers to experience a better, more productive and innovative workplace, what is needed is a culture of innovation within individual organisations.

Critical to such a culture of innovation are the small and medium sized enterprises (SMEs) which have in recent years proved themselves to be the engine rooms of economic growth and sources of new employment.  In this edition we'll begin a regular discussion on the topic of innovation and what it means for SME manufacturers in Queensland.   

The Queensland Government's 'Toward Q2: Tomorrow's Queensland' initiative features 5 key ambitions for Queensland: Strong, Green, Smart, Healthy and Fair. As a foundation partner, QMI realises that manufacturers have an important role to play in the stronger and smarter priorities, and specifically, how the adoption of innovation within SMEs can drive a competitive and sustainable industry. 

The common misconception of innovation is that it doesn't go beyond companies developing high technology products with big budgets and research teams.  Even though the development of breakthrough innovations is one aspect of the innovation spectrum, the term, and more importantly, the approach, should be seen as relevant to all organisations independent of size or sector. 

It was noted in the recent Federal Government Review of the National Innovation System (NIS) that the term "innovation" can be classified along a variety of dimensions [1]:

• process vs product:  Process innovations reduce the costs of producing and delivering a given good or service (a product), while product innovations improve the qualities of existing products or provide new products to be offered to consumers.
• radical vs incremental:  Radical innovations lead to fundamental changes in processes or products, while incremental innovations involve adaptations or refinements of a core innovation in particular applications.
• technological vs organisational: Technological innovations are generally embodied in equipment or systems, while organisational innovations involve the organisation and re-organisation of groups of people into effective teams in the production and delivery of goods and services.
• science-led vs customer-driven: Science-led innovations are an outcome of scientific research both in the public and private sectors, while customer-driven innovation is built upon careful market research and user interaction.

This is a useful classification of types of innovative activities an organisation can undertake to assist in achieving business growth.  It is also a useful list to begin to identify where a company may be currently innovating and highlight areas where additional activities can be undertaken to experience further growth.

By moving to a broader understanding of innovation, one that involves changing business practices, organisations will realise that they're most already innovating, and more importantly, there are further growth opportunities to be realised. 

For SME manufacturing organisations, a more practical framework is required. It is helpful to categorise potential areas for innovation such as:

• process innovation
• product innovation
• business model innovation, including innovation in HR and staff development
• service innovation

Before delving into any of these activities, it is important to gain an understanding of the level of innovation within your organisation.  A truly innovative organisation will answer "Yes" to many of the following statements:

1. We have applied innovative ideas across our entire company, including new product development, process and service improvement, recruitment and retention of staff, our customer and supply chain interactions and even our business model.
2. We encourage new ideas. We have a sophisticated idea capture system that is a platform for evaluating the potential of each idea.
3. We see a direct link between some of our innovations and our revenue and we also notice other benefits such as happier and healthier employees, improved customer satisfaction and improved environmental sustainability of our company.
4. We encourage all of our staff to share insights with other teams within our company and connect with people outside of our company including our customers and supply chain. We are constantly talking to other organisations in other industries to seek new ideas and to stretch the application of our capabilities.
5. We dedicate time to ensuring that we are kept up-to-date with the latest trends and we actively scan for emerging technologies. We see change as an opportunity rather than a threat – the key is being ready. We take time to think about how we can grow and develop.
6. We're seeking radical, game-changing innovation and we know that is inherently risky.  We take measures to mitigate risks, but we also value what we learn from error and never make the same error twice.
7. We invest a significant amount of money and have people dedicated to R&D and innovation. We have been awarded a linkage grant to fund a collaborative research project with a University and use other Government programs to help us identify new markets.
8. We have a business plan and focus on constantly articulating, reviewing and revising our strategic intentions. We treat our planning as an organic and evolving process and don't let progress cease by getting bogged down in trivial detail.
9. We are a design-led company. We embrace creative thinkers, novel ideas, beauty and simplicity in design outcomes. We enjoy high business performance and are known as "the leaders" in our industry with our range of highly innovative product and service offerings.

How many of the above characteristics does your company exhibit? Are these the characteristics that you would like to be associated with your business? 

In forthcoming issues of Solutions, we will explore each of these areas in more detail. We will look at some of the tools and methods that can be utilised by Queensland SME manufacturers to ensure they can maintain maximum competitive advantage.

[1] http://www.innovation.gov.au/innovationreview/Documents/NIS_review_Web3.pdf

For more information or advice, please contact:
Consultant: Sara Eastwood
Phone: +61 7 3364 0700
Email: info@qmisolutions.com.au