Go on – define ‘innovation’

It’s hard to think of anything less innovative than the use of the word ‘innovation’.

Way back in 2008, I had one of those “ah, yes!” moments when I read a Blog suggesting that the word be retired, so meaningless it had become. It was actually a significant epiphany for me – at the time, I was the editor of a publication called Australian Innovation…

Almost a decade later, its overuse and abuse has only become more chronic. And more often than not, it’s actually people who are short of ideas who end up throwing the word into a discussion. It’s a lazy way to fill the vacuum; a statement of empty, directionless intent.

And yet, the practice of innovation – which the author of the aforementioned Blog suggests could be more usefully described as ‘significant positive change’ – has only become more important. Businesses are acutely aware that they must live and breathe that positive change if their success is going to be both substantial and sustainable.

One of the Prime Minister’s first acts upon taking office was to set in train the preparations for the National Innovation and Science Agenda (NISA), which actually attached tangible goals to the elusive concept of an “innovative culture”: the facilitation of early-stage financing; improving business-research collaboration; skills development; the leveraging of public sector procurement.

Since then, the imperative for significant positive change has been further emphasised: in August, Australia slipped two places in the 2016 edition of the Global Innovation Index. At 19th, we lag our New Zealand neighbours by two places, together with regional competitors Singapore (6), Korea (11) and Hong Kong (14).

There are things we do well: we’re number one in terms of keeping our kids in school and in the top ten for access to and use of ICT, for example.

But while we’re also in the top 10 for enrolments in tertiary education, we’re way down at number 79 when it comes to graduates in the key disciplines of science and engineering.

And then there’s the domain of “innovation linkages”, where we languish in 37th spot. This includes the key measure of collaboration between research organisations and business, which Ai Group recently highlighted in our Joining Forces research report.

These aren’t issues that can be fixed overnight, so is it too early to look for a progress report on NISA, which was launched with much fanfare last December 7?

For its part, the current review of the Research & Development Tax incentive is sending mixed messages about Australia’s commitment to private sector innovation, threatening another phase of major disruption to this important program. Inviting feedback on the recommendations of the report is the right approach – it’s critical that the Government listens closely to industry before deciding on a course of action.

On this and all the other initiatives under the NISA umbrella, time will tell if government policy conveys a true grasp of the meaning of innovation.

What is your definition of innovation? And what would your business like to see in terms of ‘innovation policy’? Have your say by leaving a comment below.

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Graham Turner is the former Editor of Ai Group's Industry magazine, which ceased publication in 2014. He now edits (and moderates) this Blog, together with Ai Group's weekly Email newsletter.


  1. Jordan

    I like the concept of innovation because this is what makes businesses grow. Since innovation is related with something new, people would easily get curious and eventually become consumers. From here, business begins. Indeed innovation saves a business from going down the drain.

  2. David Cummins

    It is an interesting comment that the term innovation is over-used and misunderstood, or least ill-defined. Research I have conducted into the small business sector showed almost 20 per cent of respondents could not define innovation, while a significant number were unaware that many business activities they undertook on a regular basis constituted some form of innovation. Interestingly, well-known management researcher Rosebeth M. Kanter posed the question in 2007 whether innovation was simply another “management fad” or if it constituted an embedded business practice.

    Nonetheless, innovation research began in the 1930s by Austrian economist, Joseph Schumpeter, and it still remains one of the hotbeds of business research today. This is the case even though the concept transcends the business sector and permeates all industries that strive to evolve to meet changing markets and consumer demands. And herein lays one of the problems in trying to define innovation: there is no general consensus across industries or researchers as to what it actually is. Indeed, another well-known innovation researcher, Everett M. Rogers, alluded to this fact in the many editions of his seminal work, The Diffusion of Innovation, by suggesting that a generally accepted definition would make the work of innovation researchers much easier in the long-term. For example, is adoption of another’s ideas into your business an innovation if you did not come up with the idea yourself? Research put out by the Australian Bureau of Statistics show that Australia is actually a great adopter of others ideas, and less of a great inventor; perhaps this is reflected in us dropping places in the global index.

    While my own research into small business innovation capabilities indicates high levels of innovation activities being undertaken, many of these activities are hard to measure in a quantitative way. So this leads to the next major problem: how can you manage something that cannot be measured? For example, many of the attributes and attitudes that underpin innovation capabilities in business are intangible. Hence, developing metrics for such things as intuition, risk-taking propensity and opportunism poses a set of qualitative problems that would require accepted measures to be used across industries, and across countries. The current accepted (proxy) measures for innovation such as R&D expenditure and patent output are shown to be completely flawed; whereby, such measures actually exclude many of the most important incubators of innovation outputs – the micro and small business sector.

    While I acknowledge my research has literally only scratched the surface of the innovation definition conundrum, I can put forward one conclusive finding: innovation allows a business to evolve to meet changing market conditions. Metaphorically speaking, innovation is similar to Darwin’s Theory of Evolution, where businesses adopt and adapt new processes and products to meet the ever-changing demands and trends of their marketplace. Those that fail to adopt and adapt will fail and die out, for example, Eastman Kodak and the digital camera evolution. I concur with your observation that the term innovation is often used in a vacuous way by those who have little understanding of the concept: it is most definitely a process that is here to stay. Devising a definition that is globally accepted would be a great start towards understanding it better: then we just need to develop more appropriate measures that will allow the entire process to be better managed. As Phil Ruthven (IBIS World) once wrote in the now defunct Business Review Weekly magazine: Innovate or Die!

    1. Graham Turner (Post author)

      Thanks for your very considered and interesting comments. I think your finding that “innovation allows a business to evolve to meet changing market conditions” is very useful but also wonder – particularly since you mention Schumpeter – whether in some very important cases business innovation could be seen more as a driver of changing market conditions rather than simply an adaptation to these changes? Even in these cases, the transformative innovation would induce a wave of more adaptive changes.


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