The Australian Innovation Community

Implementation Innovation Policy

Was YouTube invented or merely an effective implementation? The Australian Government’s expenditure on R&D (GERD) is relatively high. This is largely due to funding for the large public bodies like CSIRO, DSTO, Research Councils and some other rural-based research bodies. However, Australian Business expenditure on R&D (BERD) is low relative to other OECD countries.

The Business Council of Australia report that a large number of Australian companies simply do not invest in R & D, investment is skewed towards particular industry sectors like mining, telecommunications and bio-technology and those who did invest were subsidiaries of large overseas corporations. 1

Let us assume those not investing in traditional R&D activities are making an informed and deliberate decision. The R&D expenditure argument is that Australia needs significant invention of artifacts to avoid remaining a net importer of technology, with serious implications for employment, prosperity and our balance of payments. The counter argument is that Australia might gain a competitive advantage from learning to effectively implement the best of other country’s R&D successes.

It has been known for some time (eg. Paul David,1994) that what determines improvements in productivity and product quality, thereby enhancing the competitiveness of firms and industries, is not the rate at which significant innovations are developed, but the speed and extent of their application in commercial implementation. 2

David argues that the innovation policy debate should include closer scrutiny of implementation practices. However, the Business Council of Australia report found that many Australian companies do not have the skills to capture the full benefits of their investments in innovations due largely to poor implementation practices. As Professor John Bessant of Cranfield University declares in regard to managing innovation,” How do you pick up signals about changes if they take place in areas where you don’t normally do research?’3 Perhaps Australia’s innovation policy might include both collaborative R&D and the development of effective socio-technical systems for the implementation of the output of that R&D.

The large numbers of industry reports commissioned over the last decade have confirmed this implementation skill issue, and to it being especially relevant in Australia with its majority of smaller companies. However the solutions suggested by many of these reports, eg the Department of Industry, Science and Technology’s report The Pace of Change (1994), reflect a now old fashioned linear conception of the stages of innovation from R&D to sales, to acquisition, adoption and finally to implementation into everyday routines.4 Our research and the more recent conceptions of innovation, question this linearity. An interactive conception of R&D and innovation is thought more useful. Innovative implementation of inventions can mean innovations are used in ways not imagined by the inventors. Is the innovation the artifact or the way it is used? With YouTube there was little in the way of new technology, it was more an innovative implementation of existing technology. The distinction between artifact R&D and effective usage can be very blurred.

Australian innovation policy has tended to focus on encouraging R&D research expenditure using broad macro-economic measures such as tax incentives, tertiary sector funding, and manufacturing offsets for defence purchases with some industry sector programmes. While these policies may be necessary, perhaps they are not sufficient in themselves to engage a larger number of companies in innovative implementation.

International experience points to how Australia might enlarge its R&D policy to include interaction with implementation. The stand out examples are international benchmarking schemes as pioneered by Xerox, the use of problem-solving groups in the Toyota Production System as part of continuous improvement, the UK Teaching Company scheme, and Aalborg University’s problem based learning for industry graduates. These schemes, and the Karpin Report (1994), indicate that implementation managers need to develop improved collaboration with R&D functions to develop mutually advantageous outcomes.5

It is therefore suggested that the Australian Government’s new innovation policy include encouragement of these exemplars of innovation encouragement. Specifically it may also want to also invest in the three programs listed below which are aimed at improving innovation through creative collaboration between implementers and innovators:

1 A government-funded job rotation scheme where middle level managers from the private sector spend 3 months in research bodies like the CSIRO, RIRDC or GRDC.

2 Reinvigoration of the Best Practice program which includes company demonstrations of benchmarking and continuous improvement.

3. The development of ongoing small-scale innovation idea-sharing forums scattered across the country.

References
1 Business Council of Australia (2004) Research and Development Issues by Australia's Leading Businesses. Sydney: Business Council of Australia.
2 David,P., (1986). Technology Diffusion, Public Policy and Industrial Competitiveness. In Landau, R. & Rosenburg, N. (Eds.), Positive Sum Strategy: Harnessing Technology for Economic Growth (pp. 373-391). Washington: National Academy of Sciences.
3 Bessant,J.,(2004 ) ‘Managing innovation beyond the steady state’, 5th International CINet Conference,Sydney,22-25th September,pp.1-16.
4 Wellbourne, M., Wardrop, M., & Bryant, K. (1994).The Pace of Change: Technology Uptake and Enterprise Improvement. Canberra: AGPS.
5 Industry Task Force on Leadership and Management Skills.(1994) Enterprising Nation: Renewing Australia's Managers to Meet the Challenges of the Asia-Pacific Century (Karpin Report). Canberra: AGPS.

Dr. Christopher Martin
Contact scally006@yahoo.com.au

Dr Mike Metcalfe
Contact Mike.metcalfe@unisa.edu.au