Critical funding crunch threatens Australian innovation
It’s no secret embracing innovation is key for business success. Whether that’s investment in crowdsourcing platforms, sprint-based products or rethinking the use of old legacy systems, without the transformation that comes with innovation organisations risk being left behind. But at a time when innovation is needed the most innovation funding is drying up.
Like all facets of business, COVID-19 has had a startling effect on how important innovation is. Not only has the crisis highlighted mass deficiencies in pre-existing systems, but it has also brought unprecedented adverse fiscal implications.
While organisations could have chosen to lament the damage COVID-19 has caused and halt their push for innovation they instead, according to a new report, Innovation Trends 2020, used the disruption to increase their focus.
We asked 158 Australian organisations for their views on their innovation and how they would implement this plan into their individual organisations.
Most stated that COVID-19 had increased their organisation’s focus on innovation (73 percent). Despite this, 65 percent of them expected their organisation’s investment in innovation will either be reduced or remain flat (9 percent greatly reduced, 28 percent somewhat reduced, 28 percent no change). Despite the lack of additional available funding for innovation, 61 percent of respondents reported an increased focus on innovative ideas where there was financial return.
Overall organisations are focusing on more short-term innovation outcomes, including a slight veer to the right or left rather than the pursuit of disruptive innovation. Further analysis of the results shows the largest decline in innovation activities was for disruptive products or services, with 23 percent of larger organisations expecting a decline in the pursuit of disruptive innovation and 15 percent overall.
Owners and founders were the most bullish about ongoing innovation investment, with 83 percent expecting their focus on innovation to increase (54 percent indicating a greatly increased focus). But front-line workers are more likely than other levels to feel that COVID-19 has resulted in a greatly reduced focus on innovation (23 percent).
This reinforces the importance for boards and senior leaders to regularly communicate their organisational intent to maintain a culture of innovation. More than ever, leaders in organisations, large and small, across a range of sectors, will be expecting more activity and impact from their innovation team. It’s vital innovation imperatives are clearly understood, and opportunities are not ignored out of a mistaken belief in their irrelevance within the current climate.
While the anticipated tightening of fiscal support in innovation is perhaps reflective of carefully managed budgeting across all functions, this should be an opportunity for savvy innovation leaders; in short innovation leaders will need to do more with less.