Research reveals that SMEs embrace the need for innovation more than their bigger counterparts, but many lack the time and resources to innovate effectively
Innovation is valued more by smaller Australian businesses than larger ones, according to the latest Commonwealth Bank research findings.
The Commonwealth Bank Business and Innovation Study also shows that roadblocks to innovation include a lack of time and resources, business partners who are all talk and no action, and a lack of data to help them make better business decisions.
The majority (70 per cent) of Australian businesses surveyed say innovation is critical to the future of the Australian economy. However, close to one-in-ten (7 per cent) have declared that innovation is not important to the success of their business.
Adam Bennett, Group Executive, Business and Private Banking, Commonwealth Bank, said the findings show a need for mid-size businesses to think more like start-ups when it comes to innovation.
‘Innovation starts with asking questions about how to do things simpler and more efficiently. While business owners often think of innovation as involving the use of technology, more often it involves thinking critically to better understand business challenges and opportunities,’ Bennett said.
‘These findings show an interesting change in priorities from small to medium enterprises. It is vital that as businesses grow, they continue to think like a start-up or the small challenger that they once were. This means constantly questioning the norm, and reflecting on how they can better meet the needs of their customers and even be a disruptive force in their industry.’
‘The survey also found that 80 per cent of businesses expect their partners such as their bank to provide them with innovative thinking and tools. This is very much an area Commonwealth Bank has been investing in including our DailyIQ data analytics service, leading edge Albert point of sale device and deep business and industry expertise and advice, ‘Bennett added.
Almost three quarters (74%) of businesses with a turnover of less than $1 million cited innovation as critical to the Australian economy. This figure decreases as business size grows, landing at 65% for businesses with a turnover of more than $25 million.
Big data: big challenge
Access to data is valued highly by Australian businesses, with one-in-five (20%) respondents saying they characterise ideal innovation as data driven insights that help their business innovate.
It’s unsurprising that a lack of access to data has emerged as a significant concern. Just under one-in-three (30%) businesses with a turnover of $1 million to $5 million and 37% of businesses with a turnover of $6 million to $25 million say they don’t have the data required to plan ahead or support strategic business decisions
Some businesses believe the cost of accessing data is holding them back. 15% of all businesses surveyed say they cannot afford to access the data and insights they need to better run their business. This sentiment is shared across multiple industries with one quarter (25%) of small to medium enterprises (SMEs) in the information, media & telecommunications sector and more than one-in-five (22%) in manufacturing, saying not being able to afford access to data is a significant challenge to their business.
Innovation unpacked
- More than one-third (37%) of Australian business owners characterise ideal innovation as simple things they can do on a day-to-day basis;
- When asked what stifles business innovation, most respondents said a lack of resources (43%), followed by a partner that is ‘all talk, no action’ or that doesn’t understand their business (both 30%);
- Almost half (45%) of Australian businesses believe coming up with innovative ideas is one of the biggest challenges to innovation, whilst more than one-third (34%) say it is having the time to look at their business with ‘fresh eyes’.
Businesses look to banks for innovation
- 20% of businesses with a turnover of $6 million – $25 million describe their banking partner of choice one with access to data insights about their business or industry;
- The majority (80%) of respondents said it was important for their banking partner to provide them with innovative thinking and tools;
- More than half (55%) of Australian businesses with a turnover of more than $1 million predict that by 2018, they will rely on their bank to help their business innovate;
- 80% said it was important for their banking partner to ask the right questions to help define their business problems.
‘Australian businesses know they need to be innovative but are unsure of where to turn,’ Mr Bennett said.
‘Innovation usually involves a form of partnership and advice. Our view on innovation extends beyond the use of technology, to asking informed questions to better understand customer needs and using data and insights to help businesses deliver truly innovative solutions for long-term success.’
