Business development assignment on Innovation capacity – Csiro
ANALYSIS OF GAPS TO SUPPORT THE DEVELOPMENT AND MAINTENANCE OF INNOVATION CAPACITY
CSIRO faced many challenges while working for the Light Metal Flagship program. It is very well known that Australia is a big reserve for light metals including Aluminium, Magnesium and Titanium. The entire nation was interested in creating value for its different industries from the advantages that it will receive from the reserves of light metals. Many industries in Australia were required low weight and high strength, for example in transport and biochemical industries titanium implants are very useful. Keeping these advantages in mind light metal flagship program became essential for the country. This program was launched in 2003 to focus on the national research priorities. The objective of the Light Metal flagship program was to enhance the competitiveness and productivity of the light metal production in Australia by providing efficient low carbon footprint technologies. While working for this objective CSIRO was required using innovative methods and for innovation strong research and development practices are required. It also needs enough and smooth funding (CSIRO 2013). In these areas CSIRO encountered challenges. The main areas that might support the development and maintenance of innovation capacity in light metal flagship program include structural, processes, practices and cultural areas. A detailed discussion of gaps in these areas of innovation is presented below:
The challenges that affected the CSIRO’s innovation capabilities mainly include issues of research and development facilities in Australia. Australia is a large country with small well educated population and it has a long distance from the main scientific research centers of the world in US, Europe and Asia. Due to its lagging position in scientific knowledge research and development becomes a serious issue in Australia. Comparing the investment that has been made in the last decade in Australia for higher education, research and development and technological development it is found that the country has invested less than other nations which becomes main reason behind its lagging position in research and development activities. A graph presented below clearly represents the total spending of different countries on their R&D activities:
The graph clearly represents that Australia is lagging even small countries like Sweden, Korea and Denmark in total spending on R&D activities. Main reason behind its lagging position in R&D is large number of small and medium size enterprises in the country which don’t have enough capabilities to spend on R&D. Smaller budgets of SMEs are the big structural problems for the innovation development in Australia. It has been found that the entire private sector in Australia has lesser interest in R&D activities. A High Tech sector of the country is dominated by multinational companies and these companies generally conduct their R&D activities in their home countries.
Apart from the above mentioned structural issues the country also faced cultural problems which people affected the innovation capabilities of the country. Population pressure, issues related to health of, issues concerning water, energy and climate change, declining manufacturing sector and exploitation of natural resources of the country are the main factors affecting the innovation capabilities of the country and thus the metal flagship program. CISRO faced all these cultural challenges while running its metal flagship program.
Another big challenge that hampered the innovation capabilities of Light Metal Flagship program was funding unavailability. CSIRO was established to promote the national science and innovation practices and during the period of 1970s the funding for CSIRO’s research and development was equal to funding in universities. This clearly suggested that CSIRO is not dominating in the national science and innovation system. This situation of CSIRO was not improved till 1990s and the organization was still running on the basis of franchise model. To deal with this problem Flagship Collaborative Fund has been created which is responsible for providing an innovative mechanism for establishing and nurturing collaborative relationships. AUD 97 million of the funding that Australian government provided to CSIRO in 2004 for the flagship initiatives was kept aside for external collaboration which increased to AUD 115 million in 2007 – 2008. The increased amount of fund was required due to new flagships that were created (CSIRO 2008). Thus, it is very clear that unavailability of the required funding in the circumstances when costs of R&D activities are increasing has hampered the development and maintenance of innovation capabilities.
Unstable global economic situation is also responsible in damaging the growth of innovation capabilities of CSIRO. The global financial crisis during the time of 2007 – 08 affected the light metal industry at greater extent. Aluminium industry experienced a big slowdown and many mining companies decreased their capital expenditure including BHP Billion and Rio Tinto. These are the main issues that affected the development and maintenance of innovation capability in light metal flagship program. If these issues could be resolved that would have made CSIRO able to invest more in R&D activities to enhance it’s scientific and innovation research practices. Innovation is such a powerful force that has changed the future of many companies. While talking about development of innovation the first name which comes in our mind is Apple Inc. It is a world known company famous for its innovation capabilities. An analysis of key features of existing strategies of Apple aimed at the development of innovation is presented below:
INNOVATION IN APPLE INC.
Big multinational companies like Apple, Amazon or Starbucks always follow pre-decided strategic objectives to develop and maintain their innovation capabilities. As far as Apple’s strategies for innovation is concerned the company follows following strategies to maintain its innovation capabilities:
- Find The Next S – Curve
It has been described many times in literature that products and services of a company never grow forever. There is a predictable cycle and every product, market, industry or service goes through this cycle which is often represented with an S – Curve. The curve is presented below:
(Source: Power 2013)
The curve presented above clearly suggests that the time to innovate is the time when a product or service hits an inflation point. It is the innovation window which is required to be identified for better innovation capabilities. Steve Jobs identified this situation when he returned to Apple in 2002. Jobs challenged his company to break out of the mature computer industry where Apple had never generated market share more than 10 %. Eight years after this challenges when Apple launched iPod, iPhone, iPad and Game changing retail channel Steve Jobs announce that Apple Inc is now the largest consumer electronics goods manufacturing company. CSIRO is also required to identify the innovation window.
- Lean on Customers
The successful companies which have proved themselves in innovation development had a great understanding of the problem of their customers. In fact not only customers are considered over here but also the other important stakeholders. Apple was constantly involved in understanding the problems of its customers. The changing demand of customers with technological development and identification of the demand was the main force that made Apple’s innovation capability stronger. An approach of understanding the requirements of stakeholders helped Apple in finding new innovation not only in products but also in processes (My Daily News 2013). Similarly, CSIRO should also apply this strategy of understanding the requirements of its stakeholders to make its innovation capability stronger. Although the objectives decided by CSIRO suggest that the organization has identified the demand of the light metal industry but proper execution of the strategies are equally important.
- Think like a designer
Innovation is all about creating new opinions. Managers in big multinational organizations are trained to make perfect decisions but it is not necessary that they will always have better options available. Apple never depended on good options available to it but it was ready to create new options. The excellent user’s experience that Apple has been able to manage was the creation of Jonathan Ive, who was a professional designer in Apple Inc. These growing companies don’t follow the Porter’s five forces model as it is based on the concept that markets have well defined boundaries and competitors must compete for the market share whereas innovative companies like Apple search for new markers and make the existing competition irrelevant. As far as CSIRO is concerned it should also look for new opinions which can make the operations of the organizations stronger.
- Lead the way
The most important factor required for development and maintenance of innovation is leading top management. Innovation can’t take place until and unless the CEOs of the organization make it top priority. An initiative for innovation required a level of risk – taking and failure which is impossible without the support of the top executives. Apple created a culture of innovation with the support of its top management, mainly Steve Jobs. For example: Google asks its employees to spend one day in a week on new ideas (Travlos 2013).
At the end it is essential to mention that innovation needs a large pool of talents. Apple or any other big multinational company spends on hiring the talent so that the objectives of innovation can be met. Considering the CSIRO and Australian economy it is identified that they lack talent and funding capabilities which are the most essential elements of innovation. CSIRO must understand it and try to collaborate with such organizations which can enhance the capabilities of CSIRO regarding development and maintenance of innovation capabilities.
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