BRW Top 50
17 August 2015
David Hughes, Chairman, delivered the keynote address on behalf of Griffith Hack at the announcement of BRW Australia’s 50 Most Innovative Companies on Monday 17 August 2015.
I’d like to start by congratulating all the companies that have been listed tonight and especially tonight’s award winners. It is wonderful to see the diversity of businesses that have been selected and reinforces a really important point that innovation should not be considered the domain of select areas of business. It needs to be at the heart of all our work
As Adam mentioned, I’m from Griffith Hack and we’re proud to be a major sponsor of tonight’s event. Innovation is so central to our work and it fantastic to see it celebrated in the way it is tonight.
When preparing for this evening, I reflected on my take on what innovation means for Australia and some thoughts on how we can leverage it to secure our place in the markets of the future.
I was born in Cooma, in the New South Wales Snowy Mountains. Apart from being a good place to have breakfast on the way to the snowfields, it is home to the largest Engineering project Australia has ever undertaken, The Snowy Mountains Hydro Electric Scheme.
The Snowy Mountains scheme was huge, it was the biggest tunnelling project happening in the world in its day. It involved constructing sixteen major dams, seven power stations, a pumping station and 225 kilometres of tunnels, pipelines and aqueducts.
Both my parents worked on the Snowy. I mention the Snowy Mountains Scheme because it captures the pioneering spirit of a nation willing to take risks, able to think big and bold enough to approach big challenges with a “can do” attitude. The companies recognised in these awards are testament to this enduring quality in the Australian character.
As we move into and through the digital age, nation building is still important but different nation building is required. Innovation and ingenuity, so much a part of our national heritage, must be redeployed so we can play on a global stage. IP can be the mortar between the bricks of innovation. Creating something that is robust and concrete out of the intangible is today’s challenge.
An excellent definition of Innovation is found in the Business Council of Australia’s report, “Australia’s Innovation imperative”;-
Innovation is defined as the activity of creating and capturing value from doing something new
What I like about this definition is that two distinct parts are recognised in the process of innovation;
Creating and capturing
In the Global Innovation Index of 2014, Australia Innovation Input and Output ranking was 10th and 22nd. This plays to the Creating side of the process. However, Our Innovation Efficiency Ratio, which shows how much innovation output a given country is getting for its inputs, we ranked 81st, the lowest in the OECD. This is the “capture” side of the Innovation process
Working as an IP specialist, the issue of value creation from Innovation is core to our firm.
Current research that we are undertaking within Griffith Hack measures the importance of innovation to Australia reflected by the contribution of intangible assets to the value of the ASX 100. Intangibles such as technology, brands and know-how are replenished by Innovation.
Within the ASX 100, 55% of Enterprise Value can be attributed to Intangible Assets.
There are some wonderful examples of Australian companies that are capturing the value of Innovation (Cochlear, Resmed, Aristocrat are all good examples). However, continued focus on the Value capture side of Innovation across the spectrum of Australian business has huge opportunities for Australia
Looking through the lens of IP, I think there are a couple of useful guiding principles in value creation around Innovation:
- Innovation is a process not an act.
Technology innovation is transitory and we need to consider how it can be leveraged to provide “sustaining” value in the future. For example, for a company Innovation must drive brand value. The brand is the asset that endures, positions the business in the market and provides sustainable competitive advantage over time. It is the vessel that can capture so much of the value of innovation. The brand becomes bigger than the technology.
- IP needs to be considered more than a blunt tool to stop competitors.
IP provides a structured framework to collaborate. It becomes the currency in which parties can trade, and we know Innovation can take flight in a collaborative environment.
A great example of this Strategy is the Easy Access IP used at NewSouth Innovations (University of NSW). They offer royalty free licence for many new inventions coming from the University. The reason is that the ensuing collaboration with Licensee provides greater impact for the research and better return to the University
- You need to know where you sit in the IP Landscape to win in the IP space.
There is a huge amount of available data around IP, particularly around patent. There are over 90 million patent record published and I think there is in the order of 2 million new records each year. The emergence of analytic tools gives us the opportunity to get real insight into that landscape. That insight can provide the platform to see how to compete in that space, to see where and how to move and what opportunities (and threats) may be presented
Going forward, embracing these principles, will enable us to tackle head on today’s nation building challenge.