En­ter­prise fi­nances in­no­va­tion

Re­search money is fi­nally find­ing its way into busi­ness fac­ul­ties, writes Luke Slat­tery

The Weekend Australian - Review - - Research Round - Up -

IN a sig­nif­i­cant shift of in­no­va­tion pri­or­i­ties, higher ed­u­ca­tion re­search ex­pen­di­ture on com­merce, man­age­ment and tourism ser­vices in­creased by 51 per cent be­tween 2001 and 2005, ac­cord­ing to the latest Aus­tralian Bureau of Sta­tis­tics fig­ures.

But the pro­por­tion of re­search and de­vel­op­ment spend­ing on earth sci­ences dur­ing the same pe­riod was flat­ter, ris­ing only 21 per cent for bi­o­log­i­cal sci­ences, 27 per cent for chem­istry, 17 per cent for physics and 31 per cent for math­e­mat­i­cal science.

Busi­ness and man­age­ment R & D — once re­garded as fields with min­i­mal re­search pres­tige and even less in­tel­lec­tual pedi­gree — grew from $ 11 mil­lion in 2001 to al­most $ 20 mil­lion in 2005 as busi­ness schools and man­age­ment fac­ul­ties in­creased their fo­cus on the field of in­no­va­tion pol­icy to be­come the third high­est R & D growth dis­ci­plines.

Busi­ness Coun­cil of Aus­tralia pol­icy di­rec­tor Pa­trick Cole­man says that to sup­port a broad in­no­va­tion pol­icy it is im­por­tant to boost re­search in man­age­ment and the ser­vices sec­tor.

‘‘ One area the coun­cil has been par­tic­u­larly con­cerned about is the ser­vices sec­tor’s per­for­mance in­ter­na­tion­ally,’’ Cole­man says. ‘‘ One im­por­tant con­tri­bu­tion that can be made is more re­search into in­no­va­tion and ser­vices, and bet­ter ap­pli­ca­tion of that re­search.

‘‘ We’ve needed a more sci­en­tific approach to im­prov­ing our ef­fort in ser­vices.’’

He stresses, how­ever, that ‘‘ the tra­di­tional fo­cus on science and tech­nol­ogy con­tin­ues to be very im­por­tant to in­no­va­tion; we need to see growth in both ar­eas’’.

‘‘ With­out the right man­age­ment ca­pa­bil­i­ties you won’t do jus­tice to new prod­ucts and ser­vices; you need to be able to bring them to mar­ket.’’

Re­search and in­no­va­tion pol­icy ad­viser John Howard, au­thor of sev­eral re­ports on the knowl­edge econ­omy, wel­comes the shift.

‘‘ We need to be do­ing more re­search in busi­ness and man­age­ment to en­sure we get in­no­va­tion out­comes,’’ Howard says.

‘‘ In­vest­ment in man­age­ment ca­pac­ity and man­age­ment ca­pa­bil­ity is vi­tally im­por­tant from the per­spec­tive of in­no­va­tion pol­icy. We’re also see­ing a lot of cross­dis­ci­plinary ac­tiv­ity be­tween man­age­ment and the science and en­gi­neer­ing ar­eas.’’

A mea­sure of the grow­ing pres­tige of busi­ness school re­search is the pub­lic recog­ni­tion given to Univer­sity of Queens­land busi­ness school pro­fes­sor Mark Dodg­son, win­ner of the 2007 Eureka prize for lead­er­ship in busi­ness in­no­va­tion.

Dodg­son, di­rec­tor of the school’s Tech­nol­ogy and In­no­va­tion Man­age­ment Cen­tre, says that while much of the in­no­va­tion un­der­lin­ing pro­duc­tiv­ity growth de­rives from sci­en­tific and tech­no­log­i­cal in­ven­tions, th­ese have to be ac­com­pa­nied by ‘‘ an un­der­stand­ing of user and mar­ket needs, and the busi­ness mod­els by which they de­liver value. Busi­ness re­search is an es­sen­tial com­ple­ment to sci­en­tific re­search in the quest for a more in­no­va­tive econ­omy.’’

The school’s head, Ti­mothy Brails­ford, says univer­sity and in­dus­try have started to col­lab­o­rate more closely and ‘‘ ap­plied re­search is now mak­ing valu­able con­tri­bu­tions to busi­ness’’.

Brails­ford, head of the Aus­tralian Busi­ness Deans Coun­cil, cites the Aus­tralian Re­search coun­cil link­age grants scheme, dom­i­nated this year by UQ, which gen­er­ates 30 per cent of its suc­cesses in the scheme from its busi­ness school, as a key mech­a­nism for pro­duc­tive in­dus­try- univer­sity co­op­er­a­tion in R & D.

Re­search in busi­ness schools is also gain­ing promi­nence as Aus­tralian busi­ness lead­ers in­creas­ingly see com­pet­i­tive ad­van­tage in terms of highly skilled labour, Brails­ford says. ‘‘ De­mand for in­di­vid­u­als who can think cre­atively, crit­i­cally and an­a­lyt­i­cally is high. Th­ese skills are as­so­ci­ated with re­search ac­tiv­ity.’’

Norma Har­ri­son, pro­fes­sor of man­age­ment and chair­woman of op­er­a­tions man­age­ment at Mac­quarie Grad­u­ate School of Man­age­ment and pro­fes­sor of op­er­a­tions man­age­ment at the China Europe In­ter­na­tional Busi­ness School is Shang­hai, says un­til re­cently the ARC had favoured the sci­ences and en­gi­neer­ing. This was be­cause ‘‘ the ex­pected out­puts were more eas­ily seen, mea­sured or re­ported on’’, she says.

‘‘ The man­age­ment field, with its strong be­havioural as­pects, has been rel­a­tively more es­o­teric, evolv­ing and un­struc­tured in approach, with many gu­rus es­pous­ing dif­fer­ent the­o­ries. It was there­fore more dif­fi­cult to as­sess the ex­pected out­comes of re­search from th­ese fields, let alone clearly il­lus­trate the sig­nif­i­cance of this re­search.’’

The big change, Har­ri­son says, is that re­searchers in the soft fields of busi­ness and man­age­ment have to be more dis­ci­plined in struc­tur­ing their re­search pro­pos­als.

‘‘ They are see­ing the re­sults in more re­search fund­ing,’’ she says.

The shift in higher ed­u­ca­tion R & D fund­ing is in line with a pa­per pub­lished ear­lier this year by the Aus­tralian Busi­ness Foun­da­tion, an in­de­pen­dent Syd­ney- based eco­nomic and in­dus­try think tank, which called for a re­think of in­no­va­tion pol­icy from its fo­cus on science to en­com­pass ‘‘ the smart ap­pli­ca­tion of knowl­edge to trans­form busi­nesses’’.

‘‘ The cur­rent dom­i­nance among pol­i­cy­mak­ers of the science, tech­nol­ogy and re­search push approach to in­no­va­tion should be re­placed by one that sup­ports busi­ness en­gage­ment with mar­kets and cus­tomers,’’ the foun­da­tion says.

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