Nine in 10 Australian mid-size companies are embracing innovation and technology and improve customer and gain a competitive advantage.
That's according to the Bankwest Future of Business Report which has revealed the overwhelming majority (91.8 per cent) of mid-sized businesses is embracing innovation as it offers commercial and competitive benefits (90.7 per cent).
It found almost half (46.4 per cent) currently use it as a tool to gain a competitive advantage against larger business and fend off smaller competitors, with an additional 20.6 per cent planning to do so in the next 12 months.
Customer service experience innovation is the top focus for mid-sized businesses over the next 12 months, with 69.1 per cent of respondents saying it’s a key priority for their business.
The next highest ranking priorities for mid-sized businesses over the next 12 months are product innovation (62.9 per cent) and technological innovation (60.8 per cent).
Bankwest general manager, business banking, Sinead Taylor, said the term ‘innovation’ was increasingly becoming a buzzword.
"So it was important for us to define what innovation means to mid-size Australian businesses," she said.
“Contrary to the perception that innovation is focused solely around technology and its impact on product and product development, our research shows mid-size businesses are most commonly looking to improve existing services and create more efficient work processes, followed by growth and success, and better productivity and performance.”
The report found almost half (47.4 per cent) of respondents cite their business as an innovation leader, with the same proportion (47.4 per cent) citing their business as an innovation follower. Only 5.2 per cent consider themselves innovation avoiders.
‘Old school’ ways of doing business was also highlighted as a key innovation opportunity for the Australian mid-market. Face-to-face meetings (72.2 per cent), engaging customers over the phone rather than by email (66.0 per cent) and in-person customer meetings (64.9 per cent) were all identified as future innovation opportunities.
Taylor said mid-size businesses had identified innovation, particularly in customer service, as an opportunity to set themselves apart in today’s competitive market.
“At Bankwest, we believe the mid-market is ideally positioned to lead the way in innovation due to its unique mix of available capital and relatively flexible business structures.”
The Report found innovation in mid-sized businesses is more likely to be incremental, ongoing and focused on continuous improvement, rather than radical advances that alter the basis for competition in an industry (37.1 per cent and 20.6 per cent respectively).
Despite a strong desire to innovate within their businesses, balancing cost pressures and securing the right talent remain challenges to many mid-sized businesses’ agendas.
Sufficient human resources (37.1 per cent) and financial resources (36.1 per cent) are the most commonly cited barriers to future innovation.
More than three in 10 (30.9 per cent) respondents already have employees that are dedicated to innovation efforts in their business, while a further 41.2 per cent intend to bring such employees on board.
Additionally, almost three in five (59.8 per cent) mid-sized businesses seek to reduce operating costs in order to keep innovating and grow.
A further 48.5 per cent have or intend to develop plans to access finance to effectively develop innovations in their business. More than three in five (62.9 per cent) respondents plan to formally allocate resources to innovation development in their business in the future.
Crucial to driving future innovation efforts in mid-sized businesses is the alignment of innovation strategies to the overall business strategy, as well as optimising an organisational structure that fosters and promotes idea sharing and generation (both 38.1 per cent).
Taylor said Bankwest was committed to being an innovative organisation.
We have introduced “Hack Days” and “Innovation Time Out” to actively foster innovation and develop creative solutions within our teams," she said.
“Our own experience has revealed the value of building agility and innovation into the DNA of our business.
“Looking for opportunities to maximise both commercial and competitive advantages is crucial so it’s exciting to see the mid-market taking the lead in innovation to secure future opportunities.”