Interview with Mrs. Heather Ridout
Mrs. Heather Ridout
Mrs. Heather Ridout is Chief Executive of the Australian Industry Group (Ai Group), Australia‘s largest, multi sector employer association with over 10,000 member companies of all sizes throughout the country.
The Ai Group (INSME Full Member) is engaged in developing and advocating public policies, at both the National and State Government level, in support of the national innovation system. It is also involved in building connections between industry and public research institutions.
Innovation in Australia
INSME: Let's start by learning a little bit about the Australian innovation system. Who are the main players, either private or public, at national and at local level? What are the strategic axes along which the government is carrying out its initiatives? And what specific initiatives are being carried out?
Mrs. Ridout: A range of organisations are involved in science and innovation in Australia across the public and private sectors and across national, state and territory jurisdictions. They include:
- 39 universities
- Australian, State and Territory Government research, innovation and science agencies
- Australia’s national public research agency, the Commonwealth Science and Industrial Research Organisation (CSIRO)
- more than 60 major research facilities, managed mainly by universities and Government research agencies
- private non-profit bodies (including 29 independent medical research institutes)
- some large, and thousands of small, private companies in all industries.
In 2003, over 47,200 businesses in Australia undertook some form of innovation, of which over 3,500 businesses undertook specific research and development activities.
In addition to those directly involved in science and innovation, a number of other government and non-government organisations facilitate science and innovation activities; for example, by coordinating policy, administering funding and other types of support, and regulating the broad science and innovation framework (eg the property and legal system).
Human resources devoted to research and developed total over 105,000 person years, with over 73,000 researchers undertaking R&D in 2003.
Funding for research and development (R&D) comes mainly from business and from Australian, state and territory government sources. Those spending the funds are mainly in business, higher education and government agencies involved in R&D.
Expenditure on R&D (measured in chain volume terms) in 2003 was well over $12.8 billion, with government support totaling just over $5.0 billion. The bulk of government support is channeled into public research and education institutions, with only around $800 million going directly to businesses (see chart).
INSME: How does the Ai Group position itself in the Australian innovation system? What are Ai Group's activities in the field of innovation and technology transfer? What alliances have been put in place?
Mrs. Ridout: The Australian Industry Group positions itself in the Australian innovation system in a number of ways.
As a leading association representing industry in Australia, it seeks to develop policies in support of the innovation system and advocate them with governments at all levels. The sectors represented by Ai Group, covering manufacturing, construction, engineering, IT companies and call centres, contribute to over half of all business R & D undertaken in Australia.
Ai Group is also involved in building connections between industry and public research institutions. We chair a CSIRO committee looking at industry and CSIRO linkages; we regular meet with universities and other research institutions to explore partnership opportunities; and we are currently undertaking a major research study into collaboration between industry and public research institutions.
Ai Group itself is also an innovator in its own right, with the organisation involved in major operational and structural innovation of its business services and systems. It is constantly developing new products to support its business. Much of our policy research involves original R & D, and we are a major innovator in development business surveys to monitor the Australian economy.
Ai Group was a critical player in the establishment of the Australian InnovationXchange, an organisation charged with informing industry of innovations developments in Australia and overseas. The InnovationXchange has developed a major new initiative to establish “trusted intermediaries” to facilitate research collaboration across small groups of businesses, a model that is being replicated across a number of countries. The development of the InnovationXchange has now seen it grow to a separate business identity.
INSME: Referring to your professional experience within the Ai Group, what kind of difficulties/weaknesses and strengths/advantages do Australian enterprises encounter when facing innovation issues? How does your organisation help enterprises cope with them?
Mrs. Ridout: Australian industry is moving towards building its competitive strength through innovation. An increasing number of companies are recognising that to compete with China and other developing countries, they not only need to operate in the most cost effective manner but regularly develop new products and services.
Currently within manufacturing about 20% of all sales are derived from new products (developed over the last three years). In our most innovative manufacturing sector, automotive and transport equipment, over 35% of sales are derived from new products.
Australian business more generally however suffer from two major weaknesses. While over one third of business undertake innovation, this is not being translated into more commercial R & D, with only one in every 65 businesses undertaking R & D in any given year. Consequently, the breadth of experience in industry is very narrow.
Second, R & D spending tends to fluctuate with the profit cycle, meaning that R & D will be seen as a cost when profits are tight and savings have to be secured. More work needs to be done in improving the culture within business, so that R & D is seen more as an investment in their future.
Ai Group believes it has a role in promoting a culture for innovation. It has supported reform to innovation funding and has undertaken a number of studies to highlight the importance of R & D to business.
INSME: Can you mention a couple of Australian innovation champions and briefly describe their success stories? In your view, what is the secret of their success?
Mrs. Ridout: Just two examples of successful innovation in Australia are Bishop Technology and ERG.
Founded 45 years ago by Dr Arthur Bishop the company has established a reputation as a leader innovator in steering and steering related products.
Bishop boasts a proud record of over 500 patents worldwide and has offices in Australia, the United States and Europe with a Japanese branch planned for the near future.
Today one in every four passenger vehicles manufactured world-wide incorporates Bishop steering technology. These successes have enabled Bishop to evolve from its traditional licensing activities to offer a full range of services from stand alone machines through to full product and process technology packages.
The company has expanded into high accuracy machine tool manufacture improving quality and delivery time on its services
Bishop is unique as a creator of componentry and associated manufacturing methods, without itself being a manufacturer. Bishop devotes the same priority to developing and perfecting process machinery as it does to the original component. This ensures a high level of support to the licensed manufacturer. Design, research and prototype testing are all geared to market viability ensuring superior product performance at minimum production cost.
ERG is a visionary and innovative company in the field of mass transit passanger monitoring technology. The ERG Group operates globally and has 17 offices around the world, with its headquarters in Perth, Western Australia.
ERG has achieved a compound annual sales growth rate of over 40 per cent for the past ten years. This growth has been achieved through development of its people; being market driven; investing a high percentage of revenue in research and development; and establishing alliances with major corporations globally.
The Group is currently re-focusing its core activities to focus on transit fare collection and chip-based software solutions and to take advantage of the Internet and wireless technologies.
For example, in 1999 the ERG Motorola Alliance won a contract to design and implement an integrated transport ticketing system for the Singapore Land Transport Authority. The system operates across the the six transport operators, with almost 4000 buses, process over 4 million passenger journeys each day. The smart cards enable cardholders to use Singapore’s network of public telephones and pay for travel on buses and trains. A number of other non-transit applications are also being developed.
INSME: Referring to your experience within INSME, in what sense and to what extent has the Network been beneficial to your organisation so far? From your point of view, what are the most useful initiatives undertaken by INSME? What activities (if any) would you like INSME to carry out in order for it to better pursue its mission?
Mrs. Ridout: The INSME network provides Ai Group with an excellent vehicle to monitor innovation developments for small to medium enterprises across Europe and other continents. Both the international conferences, where Ai Group has been a participant and the library of reports and papers are useful resources for keeping abreast of innovation developments.
While INSME training initiatives have not been used by Ai Group to date, the success INSME has achieved in this area, points to opportunities for Ai Group to develop similar initiatives in Australia.
Finally, the website has a wealth of information on networks, intermediaries and activities that provides a useful source for international contacts.
Ai Group would in time like to work with INSME in developing industry related overseas missions on innovation developments in Europe, and in developing joint Ai Group-INSME activities in Australia.
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