One of the few Australian’s to head a global super company, Andrew Liveris of Dow Chemical Company, was in town yesterday with some hard truths regarding his homeland. While the headline of The Australian – “They’re Laughing at Us” – specifically related to our current political paradigm, Mr Liveris was not exactly enthused at our current innovation policy and specifically, the trend away from investment in R&D.
“I think that is tragic,” he said. “If you go down the scale of R&D investments from a public-sector leverage point of view to the universities and CSIRO, you will keep tumbling down that scale. I believe Australia punches above its weight but in this area it is falling behind in the intersection of innovation and production.’’
According to The Australian, Mr Liveris went on to note that 90 per cent of patent applications in Australia were filed by companies from outside Australia, and to join the chorus of informed and influential voices despairing that the latest OECD data placed Australia among the nations with the least innovation collaboration between public research institutions and industry.
Arguably Australia’s most senior business executive as Chairman and Chief Executive Officer of a company that posted total sales of around $US57 billion last year from a portfolio of businesses in high-growth sectors such as electronics, water, energy, coatings and agriculture across 180 countries, Mr Liveris knows something about innovation. He echoes the sad refrain of at least a decade of reports, successive Chief Scientists and a variety of think tanks and consultants: Australia’s innovation output is not as high as it could be.
Our higher education systems spend years training Australian innovators to deeper and frequently more specialized levels of sophistication in their technical skill sets. Indeed, there are numerous sources both domestically and internationally that say we do this will great consistency and success. Having applauded their graduation, however, we then expect them to embrace the world of commerce, a world with entirely different norms, languages and ways of thinking. Ways of thinking, it should be noted, that many other also intelligent people have spent equally challenging years of training trying to master.
Australia is not alone in this challenge. A survey of 32 OECD member countries in 2013 noted that as public funding has increased, there is a growing concern regarding the shortage of innovative entrepreneurs, a lack of entrepreneurial skills and capabilities and the low quality of investment projects. That report also observed that while universities attract talent, develop intellectual capital, conduct research and train generations of young people to work in a variety of fields, the gap between what is taught in universities and the needs of the job market is rapidly expanding. It found that “many programmes, especially publically funded ones, focus solely on sources of finance and presentation skills, not on the more pertinent business issues which are the determining factors for whether or not investors are willing to provide funding.”
There are a variety of programs that purport to cater to innovators and potential entrepreneurs who want to bring their ideas to a wider audience, an audience that is vital if, as a nation, we are to begin to realise a greater return from our investment in the raw material of innovation. What we are missing, what we have been missing throughout the years of policies that focus on dreams of short-term material gains from licensing and IPOs and competing universities, is that we have a generation of graduates with limited if any exposure to fundamental commercial concepts. Almost all of the programs in existence are founded on an applicant identifying a potential product or market – at the very least, an opportunity – but without an understanding of commerce, this in itself is unreasonable and potentially self-defeating.
At a recent briefing regarding the Australian Government’s Entrepreneurs’ Infrastructure Programme (EIP), the program representative proudly noted that they were looking to brand the program internationally by the high quality of the business opportunities it presented. If the fundamental program to support emerging innovation and entreprenerial innovators is, however, only looking to work with the best, it necessitates applicants have the ability to identify and present the opportunities from their work. All evidence – from the OECD at a global level, from Australian Government and Australian consultant’s reports – is that this is not the case.
Productivity improvements do not come from a small number of successful spin out companies increasing to a a slightly larger number of companies. Productivity improvements, particularly in an economy with so many researchers embedded in the educational sector, need to come from upskilling those researchers, from addressing the disconnect between industry and academia and from increasing the number of researchers who even consider aspects of commerce throughout their research, rather than as a final activity to be considered when one has a research outcome and is looking to make some return from it.
So what is the solution? The 2013 Innovation Report recognised that, “Critical areas of poor performance identified in this and previous reports, such as collaboration on innovation, business culture or business management skills, need new approaches.” Which you would think was not a bad start. Sadly, however, it recommends: “More systemic policies may be needed to allow this knowledge market to function effectively by:
- Encouraging a broad cultural shift in Australian businesses to one of enquiry, linkage and collaboration; and
- Providing stronger systemic incentives for the research sector to engage with industry.” (p116).
For a report that recognised a new approach was needed, it seems to be taking an approach identical to policy over the last decade. There is no consideration of the possibility that the acknowledged skill limitations noted by Chief Scientists, formal and informal feedback by both emerging and established members of the Academy of Technological Sciences and Engineering, consultants and industry associations alike may be a factor in both sets of low rates. That perhaps the problem is not one of low demand but a recognition that there is a disconnect between the two, an inability to communicate that some simple language lessons may begin to bridge. Australian industry is under significant competitive pressures domestically and internationally that may well preclude taking on what is in effect a group of exchange students who don’t speak the language but seem to disapprove anyway.
Conversational Commerce is an attempt to redress a major challenge for the innovation industries. It is a challenge that needs to be solved if our next century is to be marked by the success of our history to date. Rather than building specialist skills in one form of uptake or topic as in a commercialisation course or MBA, Conversational Commerce looks to develop broad commercial awareness and skills that enhance an innovator’s ability to appreciate uptake as an integral variable throughout the innovation process, whether they ultimately head to market, to industry or to academia. Because whatever their career objective, real innovation takes place in a commercial world of return on investment, be it of time, effort or resources.
The problem the Conversational Commerce program looks to solve for its clients is that an innovator’s lack of understanding of the commercial work will hamper their ability to produce world-class output that is of value and relevance to their end-user. Three concepts differentiate and guide the Conversational Commerce program:
- practical: Conversational Commerce content is designed to be of immediate use in day-to-day activities
- insight: Conversational Commerce provides familiarity and understanding to enhance and empower future activities
- specialization: Conversational Commerce is specifically tailored to its audience – innovators – and their needs and not by content topic.
It is a modular program based on small group interaction and active learning in a conceptual framework. Individual modules can be undertaken as a stand-alone experience, or combined to produce a progressive program that re-inforces and extends acquired knowledge.
Conversational Commerce is by no means the only solution to the challenges we face, but one thing is clear: ideas may be at the heart of innovation, but it takes uptake to give them life. Cuts to infrastructure, to funded positions or to competitive funding programs may, as Mr Liveris suggests, have devastating consequences. But if we don’t get better at uptake, we will be condemning ourselves the irrelevance of the stereotypical Contender. And there’s nothing funny about that.