INDUSTRY needs to increase the number of strategically and technically competent company directors if it is to become more innovative.
That is according to Rio Tinto’s former managing director now deputy chairman of the Australian Minerals Research Council and Curtin University professor Malcolm Richmond.
At a business, research and industry forum this week in Perth, Professor Richmond said innovation accounted for about 50 per cent of growth in advanced industrial countries.
However, Australian industry had a poor record in innovation and one of the reasons was its leadership structure.
“Demand by Australian industry for challenging, innovative solutions seems inadequate,” Professor Richmond said.
“This is in part reinforced by a culture and leadership that down-plays its importance and stresses the cost and risk.”
Professor Richmond said Australian industry, particularly manufacturing, was at a crossroads, despite the country’s sustained, strong economic growth.
It had to urgently find ways to create and sustain higher levels of innovation and industrial performance.
However, this would be difficult because of the “entrenched” nature of the problem and its complexity.
In these circumstances government intervention may be warranted, including greater funding for incubators and export support and a greatly improved tax and grant scheme.
“Many new products produced by innovative firms face Australian markets that are usually too small,” Professor Richmond said.
“Exports are therefore necessary, but this presents an almost impossible risk profile for a start-up company.”
