Export
Issue No. 10 - April/May 2003
Export = Innovation
by Tim Harcourt
Exports and innovation are linked. Innovative firms are the ones that are typically exporting in the first place. But it doesn't stop there. By choosing to be exposed to the world market those same firms are taking advantage of innovation overseas and bringing it back to Australia. Therefore innovation creates exports, which in turn assists innovation.
In fact, innovation is a popular (but widely misunderstood) concept. It is often said that innovation is the key to Australia's future as an open economy based on 'knowledge-intensive' industries. But what does it mean?
According to the Department of Industry, Science and Resources (DISR) in the Australian Government:
"Innovation is the process that incorporates knowledge into economic activity? Innovation is about putting ideas to work. It is a process by which firms, industry and governments add value through successful exploitation of a new idea for the benefit of a part or whole of a business, industry or the nation." (DISR, 2000)
Innovation is about the application of knowledge. So investment in skills and technology is important. An eminent Australian business journalist has used the analogy of the remarkably successful Australian swimming team to show the links between innovation and knowledge for Australian businesses. Uren (2000) writes:
"Australia's experience demonstrates that refinements come from those with close knowledge of their application. In a similar way, business innovation starts with an intimate understanding of the market. Only with that knowledge can creativity be deployed to experiment and make the most of opportunities. Science can help, but its role is more one of ancillary support. The most important contributor is the relentless investment in human capital."
Note the emphasis on human capital. This is the key to successful innovation in business, sports and any other facets of life. This point is also linked to exports. Exporters have learnt the less...
