Australia has a strong history of world-leading R&D and commitment to innovation. Refrigeration, heart pacemaker, black box flight recorder, ultrasound, cochlear implants, spray on skin, WIFI, and the bionic eye all came out of Australia. And let’s not forget Vegemite, the Hills Hoist, the wine cask the box kite and Australian Rules Football too!
We are fortunate to be home to world-class research institutions, modern ICT infrastructure, and a well-educated workforce. We rank in the top 10 among OECD member nations for total expenditure on R&D, Australian research findings are regularly cited in many of the world’s leading publications, and Australia is rated fifth in a ranking of the world’s top 200 universities by five key subject fields. There is so much going for us, and yet as a nation we are slow to commercialise. While many of the above examples were based on Australian research breakthroughs they were commercialised overseas, meaning many millions of dollars weren’t realised in the Australian economy.
Wrays wants to see more home-grown innovative companies become world leaders. Members of our team and broader network have been exploring how innovators can use a combination of traditional methodologies and data science to rapidly and accurately guide commercialisation decision-making.
What is holding us back?
After 27 years of economic growth, could it be that we’ve not suffered ‘real’ economic hardship? Have we lost the fire in our belly?
Innovation doesn’t have to change the world, it can be incremental such as streamlining a process to remove cost, changing a business model, or finding a new market. Ask yourself these three questions:
- How can I remain relevant to my customers?
- How can I be more competitive?
- How can I grow my business?
Not innovating because of a risk avoidance mindset is a false premise. Technology, pace of change, increased competition, and globalisation means there is a far greater risk our current businesses will not survive.
Is the Australian government killing us with kindness? Many countries leading the World Economic Forum Global Innovation Index receive no government assistance to innovate. There is no hard data whether investments and tax payer dollars are being well directed, and it raises the question whether government or business should be the instigator of innovation.
Fear of failure
In some countries, such as the US, failure or bankruptcy is considered part of the journey from which to learn rather than being a career killer as it is in more risk adverse Australia. The good news is companies can now use data science to validate business models and cases and reduce both fail rates and investment risk.
In Australia, only 4.7% of higher education research is funded by industry, far below the performance of the top five nations which gain 16.8% of their academic research funding from business. The Australian Government has introduced new incentives to change this and we encourage all businesses to consider working with universities to fast-track their innovative efforts.
Where to start?
Businesses often lack the knowledge of what the commercialisation path looks like and who to involve.
Three steps in growing your ideas
Develop the commercialisation roadmap
A roadmap enables you to see what is ahead and develop an understanding of the validation metrics that can be tested along the path. Your roadmap should identify:
- key phases of the commercialisation process
- business model
- funding sources
- what expertise you will need, such as IP advisors, commercial lawyers, market research, branding, technology developers, industrial designers
- an anticipated budget of expenditure
- the timeline
By developing this roadmap, you can then develop a total business case that identifies the size and value of the potential market v the anticipated costs and build a cost v benefit risk analysis to make informed business decisions.
Be agile in your thinking
What you ‘think’ your innovative idea will look like is usually not quite what the market will need, want and value. Enter the project with a ‘learning’ mindset. Your project success is based on the level of penetration you make in either an existing market (a sustaining innovation that improves a current product) or creates an entirely new market (disruptive innovation). Learning as you proceed through the commercialisation process is the single greatest metric you can have. Ensuring agile development processes are embedded in your methodology will not only assist in building what customers will value, but also save you both resources and wastage.
While your initial innovative thought may be solving a problem or doing a job that you identify through your own market contact, understand that intellectual property is transferrable globally. You do not need to be a multinational to become a global distributor, therefore enter your commercialisation project thinking about ALL the markets it can touch.
Important operational and business questions
- Do you have the right leadership team to successfully take the business forward?
- How will you source and secure funding to support growth plans?
- Will you attract the right people to join the team when scaling the business, both in terms of technical ability and cultural fit?
- How will you handle business development and marketing?
- Do you have the right plans in place to build strategic relationships with partners, suppliers and distributors?
- What are you doing to recognise and manage IP issues and safeguard the organisation’s valuable IP assets?
Key IP considerations
IP often represents the greatest proportion of an organisation’s asset value. The adoption of some simple IP management principles and practices can help businesses ensure they are well positioned to make the most of their creative endeavours.
- Consider protection options at the right time. If this is done in the wrong order, opportunities to secure exclusive rights can be compromised or lost.
- Ensure your IP assets are understood, suitably safeguarded and managed so you can identify and capture new innovations as they are developed.
- Consider how IP rights can be used to support the commercial aims of the business. For example:
- Keep competitors at bay
- Attract business and potential collaborative partners
- Support capital raising activities
- Licensing and royalty-based income.
- The ability to protect your own innovations and solutions does not guarantee your ability to market or use your products. Get advice to understand what third party IP rights exist and what restrictions or roadblocks they may place on your own technical and commercial activities.