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South Australian companies must leverage Australia's mining boom to develop innovative products and services that boost their bottom line if they are to thrive in global markets, a business forum hosted by the Committee for Economic Development of Australia (CEDA) has heard.
Chair of the Economic Development Board, Raymond Spencer, Codan Ltd, CEO, Donald McGurk, Playford Capital, CEO, Amanda Heyworth, and Adelaide Thinker in Residence, Professor Göran Roos, told the forum that companies needed to seek out ideas in all aspects of their businesses and use them to boost sales and improve their performance.
The panel identified five key messages for South Australian businesses in applying technology innovatively to compete in a rapidly globalising market:
"Innovation is not creativity...it's not about creating new things either really. It's the application of new ideas commercially to fulfil unmet or often unrecognised demand," Mr Spencer said.
"It has to create value and people have to be willing to pay," he said.
Ms Heyworth said businesses should not seek to be among the five per cent that adopts technology for its own sake but should be among the early adopters who use innovative solutions to "solve true business problems," including providing social benefits or entertainment.
"It's about using our brains to generate income growth, increasing the number of quality jobs," she said.
Mr Spencer said innovation was "in the DNA of South Australian companies" and many were adapting technology to solve business solutions, including:
But Mr Spencer warned that "what we are doing is not enough - we will be overtaken in a globalised economy." Australia had experienced "abysmal" productivity growth, particularly in labour productivity in comparison to its competitors over the past decade, he said.
Companies such as Codan Ltd now manufactured high volume, less complex manufacturing in Asia while retaining low volume, complex manufacturing locally to maintain critical capabilities, he said.
South Australian businesses needed to capitalise on what Mr Spencer described as a "one hundred-year super cycle" in the mining industry to develop knowledge intensive, high value-added services and manufacturing.
"This decade will be viewed by the future generations as the most transformative decade in the State's history," He said.
"The challenge for businesses is to carpe diem...to learn as if we are going to live forever...to partner with other businesses, to build innovation. Businesses need to engage with schools to develop the skills of young people and bring inclusiveness and diversity into the workforce," Mr Spencer said.
The panel told businesses that the learnings from successful innovative companies were that businesses should:
The panel said that the lack of a venture capital industry in Australia should not hold businesses back in innovating to develop new products and services.
Mr McGurk said companies must target people with an interest in the outcome of the development (such as existing customers) to invest in innovation.
"The answer is a function of organisations themselves. At Codan, we have targeted appropriate people to invest when we have been looking to raise capital for innovation...These people tend to stay with you," he said.
Professor Roos said universities also had a key role to play in developing the "virtuous cycle" of spawning (and supporting) innovative start-up businesses that would later support the university through bequests and donations.