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WA needs government push to become Asian innovation hub

WA has potential to be the innovation hub for the Asia region but the State Government needs to be more supportive and an ecosystem is needed to build momentum.

Artrya co-founder and director John Barrington toldan AIM WA WestBusiness CEO Voice Boardroom Series lunch it was vital to build an ecosystem for innovation in WA.

“If you get an ecosystem where other people are doing innovative things you can learn from and feed off and leverage, then you get a great momentum,” he said.

“While WA has innovation in its DNA, we are at risk of falling behind what the other States are doing,” he said.

He said WA needed to think big. He said it could look to the Indian Ocean ring and become the innovation hub for that area.

Deloitte managing partner Michael McNulty said an ecosystem was needed but it was almost expected this should just be left to happen.

Mr McNulty said WA did demonstrate examples of excellent innovation — particularly in terms of the resource sector which was showing leadership on the global stage — but was not telling the stories well enough.

He said as a society, we needed to be more tolerant of failure, particularly in the public sector where there was a big intolerance.

“The successful organisations who can innovate have worked out how to celebrate having a go, but not punish people who fail,” he said.

“A lot of companies do that well but I feel for people in the public sector who are under intense pressure not to fail.”

Visagio managing director Wilson Casadosaid the Perth innovation ecosystem had come a long way in the past decade, but there was not the number of innovative companies compared with elsewhere.

“When attracting investment, it needs to be remembered that investors could invest anywhere in the world, and the reality is that Perth is well behind,” he said. “Sydney, having the biggest number of start-ups in the southern hemisphere, doesn’t even touch what is elsewhere. If you go to Rio, Sao Paulo, Santiago, it doesn’t even touch it. Sydney is very small.”

Health Engine managing partner Marcus Tan saidit was more important now to get the flywheel turning, rather than talking about an innovation ecosystem.

Mr Tan said Health Engine started in 2006 when there was no ecosystem concept.

“We didn’t even know we were a start-up. This whole idea of co- working spaces and accelerators etcetera just didn’t exist back then,” he said.

“It was in 2011 that there started to be this ecosystem discussion. The whole conversation these days is not about ecosystems, rather it’s about turning the flywheel.

“That flywheel is slowly turning, but what it requires is success stories.

“Investors when they make money will start to plough more capital in, and entrepreneurs who make money from their start ups will actually invest that back into other start-ups — that’s the flywheel.”

City of Canning chief innovation officer Jemma Greenesaid she agreed it was important to build an ecosystem, and local government had an important role to play by promoting culture.

“Culture is important and local governments have a great opportunity to build that amongst their organisations and to get that excitement happening,” she said.

“We need to focus a lot of on our internal culture building so we can effectively support the external as well.

“That would help us to support the industries and start-ups coming through.”

Ms Greene said changing the culture by changing the mindset and building the skill set and tool set of its staff, was something the City of Canning had focused on to help support the wider ecosystem.

Navigating Innovation chief executive Erica Haddon said a challenge with promoting an ecosystem for innovation was the mistrust of external organisations.

She said traditional organisations innovated very well internally, but were cautious of external innovations.

“We need to shift the culture internally through an educated process of helping them understand — and that goes from board and senior executives all the way down the organisation,” she said.

“That’s how you can start to embrace these more foreign elements into your organisation, which will help enrich the ecosystem.”

Spacecubed managing director Brodie McCullochsaid WA did not receive the funding towards innovation it deserved, given the State exported $130 billion worth of goods, mostly mining, each year, making up 35 per cent of Australia’s exports.

He said State and Federal funds would this year make up about $3 million.

“Some bigger companies have put money into the ecosystem, for example RAC, but contributions from the bigger companies and government combined, that probably adds up to about $7 million to $8 million. That’s not enough to move the dial,” Mr McCulloch said.

PwC partner Justin Eve said WA was behind where it should be and had a lot of work to do.

“We have this fantastic entrepreneurial spirit, we have these businesses that have been hugely innovative and these hubs that have emerged are excellent,” he said.

But Mr Eve said the conversation needed to move away from great technology to pivot towards industrialising something that solves big business problems. “That’s a big challenge within WA.”

Multiplex regional managing director Chris Palandri said there was a lot of innovation in the building industry globally and although there was potential to leverage off this locally, in WA this was being stifled by the “patchy” nature of construction projects and the size of the market.

“Projects like the stadium or museum are not frequent enough to provide the regularity or consistency to keep exploring the opportunities. That’s a handbrake for us. It is always going to be difficult for WA,” he said.

Mr Palandri said Premier Mark McGowan could better promote WA’s examples of good innovation.

“This conversation would be very different if Mark McGowan, for example, was instilling the virtues of everything great that is happening in innovation in WA, promoting it and pushing it, even if he wasn’t putting money behind it,” he said.

“I’ve not heard him talking about it, but it is important to have a leader.”

Mr Barringtonsaid though individual firms were innovative at a macro level, a strategy from the State Government was missing.

“There’s no innovation strategy and we are at risk of falling behind, so we can’t attract the talent here,” he said.

Fortescue Metals Group chief operating officer Greg Lilleyman said he disagreed that WA was behind.

“In terms of the resources industry there isn’t anywhere else on the planet that is anywhere near us on innovation,” he said.

“Ninety-nine per cent of the world’s autonomous haul trucks are in WA. Ninety-five per cent of the world’s mining software is developed in WA. The handbrake doesn’t exist, fortunately, in our business.”

Mr Lilleyman said companies needed an innovation champion.

“It doesn’t necessarily have to be the CEO or chairman, but there does need to be a champion somewhere if it’s an established business,” he said.

“You have to have someone internal that is pushing through the barriers and releasing the handbrake that inevitably comes on in these instances and finding a way to do them.”

WA Museum chief executive Alec Coles saidthere was still too much regulation and too much averseness to risk, issues he didn’t feel the Government was trying to address.

Mr Coles said there were extraordinary stories of innovation in WA, but they needed to be brought to the surface. “All of the time we see incredible examples of people who innovate, we need to laud them and facilitate them,” he said. Mr Coles said the power of collaboration was also underestimated.

Gerard Daniels chief executive Alison Gainessaid there was an opportunity to create a talent brand in WA, similar to the tourism brand being mooted.

“WA has always been a hub for agricultural and mining innovation, and more recently health innovation,” she said.

Meanwhile, big sophisticated companies, with FMG being a flagship, were already bringing talent to WA to do interesting things. She said WA could therefore be promoted as a talent destination which, compared with other parts of the world, had relatively collaborative higher education institutions that were prepared to work together to get things done and to create skills that are really unique.

Telstra regional Australia executive Janet Barnes said recent research by her organisation on disrupting decision-making found that technology wasn’t necessarily the enabler.

“Rather it is about the whole of the company being aligned behind a singular strategy vision, ensuring the people element, the processes and partnerships are in line,” she said. “The organisations that had a whole-of-company strategy — which only about 25 per cent of survey respondents actually did — were further progressed down the digital transformation journey.”

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