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Innovation Readiness and Performance in the Spatial ... · Innovation Readiness and Performance in...
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www.crcsi.com.au
Report to the CRC for Spatial Information
Dr. Roxanne Zolin
Dr. Judy Matthews
Dr. Sukanlaya Sawang
QUT Business School
April 2012
Innovation Readiness and Performance in the Spatial Information Industry
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Table of Contents
1. Executive Summary ...............................................................................................................2
1. Introduction ........................................................................................................................4
1.2 Research context and method...........................................................................................5
Defining innovation ...........................................................................................................6
Measuring innovation ........................................................................................................8
Semi-structured interviews ................................................................................................8
2. Results from the interviews ................................................................................................11
2.1 Reported definitions and measurements possibilities of innovation..............................11
2.2 What role does innovation play in the company’s success? ..........................................14
2.3 Reported innovation activities: What did firms do to be innovative?............................16
Innovation newness..........................................................................................................18
Innovation radicalness .....................................................................................................19
Reported innovation outcomes including Intellectual Property Protection .....................19
Reported benefits from innovation ..................................................................................20
2.4 Innovation enablers ........................................................................................................23
External requests from customers....................................................................................23
Networks ..........................................................................................................................24
Other external enabling innovation factors ..........................................................................25
Corporate culture .............................................................................................................25
Internal ideas from executives or staff .................................................................................26
R&D investments .................................................................................................................27
Other internal factors .......................................................................................................27
2.5 Innovation barriers .........................................................................................................30
Time or money constraints...............................................................................................30
Embedded Attitudes and Corporate culture.....................................................................31
Tendering practices of Government and industry............................................................32
Other internal and external factors .......................................................................................33
2.6 Emerging Issues .............................................................................................................33
3. Conclusion ...........................................................................................................................34
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4. References............................................................................................................................35
1. Executive Summary
The CRCSI Industry Development Program aims to encourage innovation in the spatial
information sector. To support that goal, this study investigates innovation in the spatial
information (SI) industry, develops a framework to assess innovation in the SI sector, and at a
later stage conducts an innovation survey of all firms in SI industry. This report presents
findings from a study of 20 large and small firms engaged in surveying and other spatial
information development and use, using face to face semi-structured interviews to identify
innovation activities, and the enablers and inhibitors of innovation1. The overall purpose of
this first phase study is to build towards a program of work that will allow the CRCSI and its
stakeholders to systematically improve the management of innovation in the industry,
measure the performance of the industry in response to investments in innovation, and
encourage a greater degree of investment in spatial R&D.
Firms reported innovation was a key factor to their success with benefits noted in reputation,
sales, survival, firm growth, attracting new customers, time efficiency, work satisfaction,
staff motivation and retention. The forms of innovation reported include product and service
innovation, process innovation, organisational or managerial innovation and marketing. Most
innovations were new to the firm or new to the industry with few considered radical or new
to the world. Less than half the firms use intellectual property (IP) protection practices with
only a few mentioning patents.
Internal and external factors enabled innovation in these firms. Factors internal to the firms
include processes and corporate culture, generating and applying ideas from executives or
staff, R&D investment of time and money and government contracts. External enablers
include requests from new and existing clients, networks, new knowledge from conferences
1 In this study we defined innovation as “the introduction or implementation of [1] a new or significantly improved good or service; [2] operational process; [3] organisational/managerial process; or [4] marketing method.1”. (http://www.abs.gov.au/ausstats/[email protected]/Previousproducts/8158.0Glossary12006-07?opendocument&tabname=Notes&prodno=8158.0&issue=2006-07&num=&view=
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and trade shows and government contracts. Barriers to innovation were time and money
constraints, aspects of corporate culture and tendering practices.
Based upon these findings we recommend the following:
• Develop measures for the ‘hidden innovation’ in organisational practices
• Focus on internal enablers of innovation such as corporate culture
• Focus on continuous improvement in addition to innovation R&D projects
• Promote SI innovations outside the industry to encourage client requests.
This information will be used to develop the survey instrument to baseline the forms of
innovation in the SI industry.
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1. Introduction
The Cooperative Research Centre for Spatial Information (CRCSI) was established in 2003
as an unincorporated joint venture under the Cooperative Research Centre Program of the
Australian Commonwealth Government. The spatial industry contributes up to $12.5 billion
annually to Australia’s gross domestic product.2 The CRCSI works together with about 100
partners, including federal and state government agencies, universities, 60 small to medium
sized companies and a number of large corporates in order to build critical mass in research
ventures between end-users and researchers, leading to accelerated industry growth,
improved social well-being and a more sustainable environment.
As a part of this mission, the CRCSI, in conjunction with the Spatial Industries Business
Association (SIBA) aims to establish an innovation program that enables the industry to
systematically improve the management of their internal innovation and research and
development (R&D) programs. In that context the CRCSI and Industry Development
Program intends to drive a cultural change amongst spatial industry small to medium
enterprises (SMEs). Particularly, it focuses on managers’ attitudes and actions towards
strategic planning and R&D investment and seeks to encourage and increase investment in
innovation and R&D by the industry.
QUT Business School (QBS), lead by Associate Professor Roxanne Zolin, Dr Judy Matthews
and Dr Sukanlaya Sawang, was awarded a CRCSI grant for the subproject “Spatial
Innovation and R&D Investment – A Baselining and Benchmarking Study.” This research
project aims to:
1. Develop an industry specific framework for the determination of baseline
R&D investment and innovation measures for the Australian spatial industry;
2. Develop an appropriate test instrument and methodology that will enable
planned periodic testing of these investment and innovation measures;
3. Conduct a preliminary and secondary R&D and innovation investment survey
using the developed test instrument;
2 http://www.spatialbusiness.org/
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4. Better understand the drivers, enablers and impediments to innovation within
the Australian spatial sector;
5. Analyse collected survey data and otherwise make recommendations in
support of the key objectives as stated in the CRCSI / SIBA Spatial Industry
Development Program.
This study will also make recommendations about the next phase of the work.
The QBS Spatial Innovation research project comprises two major phrases: exploratory
qualitative case studies and a quantitative industry wide survey. This report presents the first
phase of the QBS project and provides an overview of the preliminary findings of the semi-
structured interviews that were conducted in the industry. The report is structured as follows.
Section 2 describes the research context and applied methods. Section 3 discusses the results
from the case studies. It portrays the various types of innovations reported by interview
participants. Furthermore, we present several factors that seem to enable and inhibit
innovation. Finally, Section 4 summarizes our main conclusions from the interviews,
provides recommendations for the CRCSI and discusses the implications for the development
of the national survey instrument (phase 2 of the research project).
Figure 1: Phases of the research QBS Spatial Innovation research project
Phase
Phase 1 Semi‐structured interviews
Phase 2 Development of benchmarking instrument
Phase 3 Nation‐wide innovation survey
Phase 4 CRCSI intervention
Phase 5 Second nation‐wide innovation survey
1.2 Research context and method
The spatial information industry is a rapidly growing industry that consists of companies
offering a wide range of geographic-related services such as surveying, remote sensing,
location based services, photogrammetry, mapping, aerial imagery, land development,
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environmental management, geographic information systems, Web services and GPS
amongst others.3
All firms active in this industry use spatial information and their activities can be broadly
clustered into two groups: Surveyors on the one hand and Other Spatial information firms on
the other. The first group’s primary activities are measuring, assembling and assessing land
and geographic related information to be used for land planning and implementing the
efficient administration of the land and the structures thereon, e.g. engineering and mining
surveyors or boundary surveyors.4 The latter group consists of spatial information users and
information technology firms that manage and analyse data that has geographic, temporal,
and/or spatial context. It also includes development and management of related information
technology tools, such as aerial and satellite remote sensing imagery, Global Positioning
Systems (GPS), and computerised geographic information systems (GIS).5
Both clusters of firm consist of a large spectrum of diverse firms and further, a certain
overlap between the Spatial and Surveying firms can be observed: some Surveying firms
move onto spatial territory and several Other Spatial firms have their own surveying
subdivision. For the purpose of this report, however, the interviewed firms are divided into
the two separate groups mentioned; except for two firms, who were clearly active in both
fields.
Defining innovation
For the purpose of this study, we applied the Australian Bureau of Statistics’ definition for
innovation:6
An innovation is the introduction or implementation of [1] a new or significantly improved
good or service; [2] operational process; [3] organisational/managerial process; or [4]
marketing method.7
3 http://www.spatialbusiness.org/aus/Position-On-Issues 4 http://www.sssi.org.au/details/cat/8/sub/9.html 5 http://www.crcsi.com.au/About/What-is-Spatial-Information 6 The ABS based their definition on the widely recognised 'Oslo Manual, Guidelines for Collecting and Interpreting Innovation Data' (Third Edition, 2005). 7 http://www.abs.gov.au/ausstats/[email protected]/Previousproducts/8158.0Glossary12006-07?opendocument&tabname=Notes&prodno=8158.0&issue=2006-07&num=&view=
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The four innovation types can be described as following:
1. Product or service innovation:
Any goods or services that are new to a firm, including significant improvements in
technical specialisations, incorporated software, user friendliness or other functional
characteristics. Routine upgrades of equipment, renaming existing goods or services
or routine customisations of goods are services, however, are excluded.
2. Process innovation
Process innovation is a change for the business in its methods of producing or
delivering goods or services, including significant changes in techniques, delivery
methods, equipment and/or software.
3. Organisational/managerial innovation
Organisational/managerial innovation is a significant change in the strategies,
structures or routines of a business which aim to improve the performance of the
business. These include changed corporate directions; introduction of new
management techniques; improved business diagnostics or performance measures;
significant workplace reorganisation; and significant changes to communication and
information networks.
4. Marketing innovation
Marketing innovation is a significant change to the business in its methods of
marketing, aimed at better addressing customer needs; opening up new markets or,
newly positioning the business' goods or services on the market, with the objective of
increasing the business' sales.8
Traditionally studies of innovation have focused on technology and technological innovation
but more recently they have included a broader view of innovation that is sensitive to the
demands of business and customers and linked to the creation of new markets.
8 http://www.abs.gov.au/ausstats/[email protected]/Previousproducts/8158.0Glossary12006-07?opendocument&tabname=Notes&prodno=8158.0&issue=2006-07&num=&view=
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Measuring innovation
Innovation is important to industry and the CRCSI aims to increase the level of innovation in
the spatial information industry. To manage and encourage innovation, however, the CRCSI
needs ways to assess the forms and levels of innovation over time that are sensitive enough to
detect changes due to improved innovation efforts and/or changes in industry maturity. But
measuring innovation in the spatial industry proves to be challenging. Part of the difficulty
with documenting this issue is that many of the traditional innovation-proxies, such as R&D
expenditure, patent applications or the introduction of new products are aimed at measuring
product innovations in firms and often overlook the hidden innovation that occurs on a
smaller scale or in other forms, not detected by these measures. Traditional innovation
measures focus only on product innovations and fail to assess organisational, management
and marketing innovations. We include these traditional measurement methods, and extend to
include these new measures that can be used to detect and monitor innovation. Our goal is to
develop a scale to measure innovation at the firm level in SMEs in the Spatial Information
Sector.
Semi-structured interviews
During the first phase in this project, semi-structured interviews were employed to explore
the firm’s innovation activities and orientation. The information gained from this stage will
be used to formulate the nation-wide survey to measure the level of innovation in the sector
and will allow us to benchmark single firms against the industry average and identify future
strategic directions. In addition, the findings from these interviews will allow us to document
cases of successful innovations in spatial information firms.
In this project, twenty firms were interviewed; the firm’s characteristics are shown in Table 1.
An average interview lasted approximately 1 to 1.5 hours. The table below provides an
overview of the firms throughout Australia that participated in our semi-structured face-to-
face interviews. Numerous classifications are used to define firms by firm size, varying by
country and industry. For the purpose of this publication we adapted the small business
definition from the Australian Fair Work Act 2009, which defines a small firm as one with
fewer than 15 employees.9 In the interview sample, four firms were located in Queensland,
9 Fair Work ACT 2009, section 23, http://www.fwa.gov.au/index.cfm?pagename=legislationfwact
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four in New South Wales, five in Western Australia, six in Victoria and one in the Australian
Capital Territory. The interview questions can be found in Appendix A.
To acquire a good picture of the diversity of the spatial industry firms, a guided non-
representative sample was created from the Spatial Industries Business Association (SIBA)
members list. In these exploratory interviews we tried to include both Surveying and Other
Spatial firms with different sizes on both the east and west coast of Australia.
The research team developed a first version of the interview protocol from an in-depth
discussion of the different dimensions of the research questions. The interview protocol was
trialled during the first few interviews with further development of the protocol during the
interview stage of the project. Questions asked during the interview covered the following
areas:
1. Organisational structure and interviewees’ role within the organisation
2. Current and recent innovation activities
3. Innovation outcomes
4. Networks and collaboration for innovation10
Table 1: Overview of the 20 interviews in the spatial information sector
Firm code Interviewee’s function Firm type Firm
size
Firm
location
ActSpaJm1 CEO Other Spatial Medium ACT
NswSpaJm1 MD, Owner Other Spatial Small NSW
NswSurJm1 Director Surveyor Small NSW
NswSurJm2 MD Surveyor Small NSW
NswSurJm3 Director Surveyor Medium NSW
QldSpaJm1 Survey Manager Other Spatial Large QLD
QldSpaRz1 MD Other Spatial Small QLD
10 A full version of the interview questions can be obtained from the authors
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QldSurRZ1 Registered cadastral Surveyor, Owner Surveyor Small QLD
QldSurSs1 Office Manager Surveyor Medium QLD
VicSpaRz1 Manager Other Spatial Small VIC
VicSpaRz2 MD, Geo spatial systems developer Other Spatial Small VIC
VicSpaRz3 Client executive Other Spatial Large VIC
VicSpaRz4 MD Other Spatial Medium VIC
VicSpaRz5 MD, CEO Other Spatial Medium VIC
VicSpaSurRz1 GIS Coordinator Hybrid Small VIC
WaSpaJm1 R&D Manager Other Spatial Medium WA
WaSpaRz1 MD Other Spatial Medium WA
WaSpaRz2 CEO Other Spatial Medium WA
WaSpaSurRz1 Business Development Manager Hybrid Medium WA
WaSurJm1 General Manager; Operational Manager Surveyor Small WA
Note: small is up to 15 FTE’s, medium is 15-200 FTE’s and large is 200+employees
Because this is a qualitative study we report the attitudes and opinions that are held by the
respondents but we cannot extrapolate from these small numbers to estimate the percentage
of the population who might hold these opinions. Hence we report the number of respondents
who hold each of the opinions but not any percentages or statistics, which are inappropriate in
a qualitative study. Data to calculate these statistics will be gathered in the following survey.
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2. Results from the interviews This section reports the respondents’ answers to the main questions of the interview.
Many respondents’ comments on significant changes and improvements arose from
reflections about how the firm was carrying out its business now, compared to the recent past.
2.1 Reported definitions and measurements possibilities of innovation
In order to get insights into the industry’s understanding of innovation, we enquired of the
interviewees how they would define innovation. Figure 2 provides an overview of their
responses, highlighting that there is no broadly prevailing definition of innovation. The most
important factor participants referred to in order to define innovation was something new in
general to enable an increased efficiency or problem solving (55% of the respondents). A
managing director from a large Spatial firm, for instance, defined innovation as following:
“I would say it is solving a problem in a unique way”.11
Other answers referred to the use of new technologies, software or instruments (30%)
and to different ways of thinking and approaching issues that arise in firms (10%). An
example of the latter is given by a large Hybrid firm:
“It's the new thought process. Bringing in fresh ideas, new ideas (…)”.12
11 WaSpaRz1 12 WaSpaSurRz1
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Figure 2: Interviewee’s definitions of innovation
Note: multiple answer per participant possible
In addition, we asked the interviewees how they would measure innovation. Figure 3
provides an overview of their responses. As expected, many interviewees suggested
measuring changes in productivity or market success. A managing director from small Other
Spatial firm for instance said:
“Find out how much of a company's revenue stream came from the same product they
were offering last year.”13
Others suggested measuring changes in firm’s R&D expenditure or in their efficiency.
A managing director from a large Other Spatial firm suggested for example:
“[A] lot of the improvement is coming about through IT, you know, speed of
processes and that sort of thing, you could measure the amount of time it would have
taken to do a certain area in you know, in different times, you know in five year
increments.14
13 VicSpaRz2 14 VicSpaRz4
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Several others referred to a broad range of other answers, such as the number of
developed software products or client satisfaction.
Figure 3: Interviewee’s views on measuring innovation
Note: 14 respondents, some with multiple answers
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2.2 What role does innovation play in the company’s success?
We next inquired into the role that participants ascribed to innovation in their firms.
Many of the significant changes and improvements arose from reflections about how the firm
was carrying out its business now, compared to the recent past.
Out of the seventeen participants who answered this question, only one firm says that
innovation doesn’t play a very great role in their company. Nine interviewees, however,
express that innovation is (very) important for their company. The founding CEO, for
instance, says:
It has been the absolute critical foundation of this company’s success and continued success,
has been and will be – innovation.15
Those interviewees, who elaborate on the importance of innovation in their firms,
provide different reasons for this. Firstly more than one company states that innovation is
crucial to their existence. The manager of a small Spatial services company, for instance, says
that without their investments in innovations, they “would not exist”.16 Secondly, innovation
is described as a way to stay ahead of their competitors or to differentiate themselves from
them. A large Hybrid company manager, for instance, says:
Being a service oriented company in a competitive environment, we need to continually look
for innovation to improve the product and the service delivery. The clients won’t stay with the
same product, if someone else comes out and says oh you know, um, my widget has got a
whistle for the same price, then they will go with that, even if they don’t want a whistle, they
will just say oh well, I’m getting more why wouldn’t I want one with a whistle.
But this does not only apply to large companies. A small Surveyor, for instance, says:
15 WaSpaRz2 16 VicSpaRz1
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Things have been done completely differently now, and if we hadn’t changed and kept pace
with that, we wouldn’t be here.17
Thirdly, innovativeness is important to manage growth. A small Hybrid GIS
Coordinator formulates this as following:
[O]ur business is in a growing stage, so managing a growing business requires innovative
ideas. Going by your definition we are introducing …. systems and processes, so that you are
able to manage that growth and also compete. So it is not just about competing in the
marketplace, but also about how you are growing the business.18
17 NswSurJm2 18 VicSpaSurRz1
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2.3 Reported innovation activities: What did firms do to be innovative?
Subsequent to investigating the respondent’s views on innovation and, we examined the
innovations that had actually taken place in their firms during the past year. When the
participants were approached to take part in a formal interview, they often replied that they
were not innovative. During the interviews, however, we noted that most firms are not only
continually improving themselves, but that many interviewees were able to mention one or
more innovations in their firm during the past year. Out of the twenty interviewed companies,
fourteen mentioned one or more product or service innovations during the last year. Six firms
mentioned one or more marketing innovation, eight firms mentioned one or more process
innovation and seven firms mentioned organisational innovations. Figure 4 provides an
overview of the reported innovations.
Figure 4: Reported innovations by interviewees
Respondents mentioned a wide range of innovative activities. Product innovations included
for example a natural language search engine, the sales of new technology and the use of
sophisticated graphs used for image pattern recognition. Examples for marketing innovations
include the use of social media and the introduction of several new marketing concepts.
Process innovations included new manufacturing techniques and new processes to draw up
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plans, and organisational innovations included going public and the introduction of new
management team work strategies.
Remarkably, relatively few of the interviewed surveyors mentioned
organisational/managerial innovations, while almost all Other Spatial firms mentioned one or
more product/service innovations. Firm size does not seem to have an effect on the type of
reported innovations. Graphs X and X provide an overview of the mentioned innovations per
firm type.
Graph X: Innovation types by firm size
Graph X: Innovation types by firm type
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Innovation newness
Further, we asked the participants how new their innovations were. Figure 6 shows the
proportion of innovations that were reported as new to the firms only, new in the industry or a
world-first:
Figure 6: Reported newness of innovations
Not surprisingly, most firms mentioned one or more innovations that were new to the firm.
More surprising was the number of reported innovations that were new to the world. An
example of such an innovation is the invention of a new radio-location technology that
provides precise positioning in many environments where GPS is either marginal or
unavailable.
The new to the world innovations were all reported by the Other Spatial firms, both
small and medium/large firms. There was a strong relationship between firm age and these
type of innovations as well: all new to the world innovations were reported by firms founded
after 1997, while firms in our sample that were founded before 1997 reported no new to the
world innovations.
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Innovation radicalness
Another typology in the innovation literature distinguishes between incremental innovations
that are significant improvements to an existing product, method or process and radical
innovations that change the core business of the firm. Therefore, we asked participants
whether their innovations were radical or incremental innovations. Not surprisingly, most
innovations were incremental innovations. Figure 7 provides an overview of the reported
innovation radicalness.
Figure 7: Innovation radicalness
Reported innovation outcomes including Intellectual Property Protection
After exploring the innovations that had taken place in the sector during the last year, we
inquired into the resulting innovation outputs. Out of twenty interviewed companies, nine
have one or more ways to protect their intellectual property: patents were mentioned twice,
non-specfied forms of IP protection four times, license agreements three times and other IP
protection measures, such as trademarks and confidentiality agreements, were mentioned
three times. Most measures come from medium to large firms: six of the eleven medium to
large firms mentioned IP protection measures and three out of nine small firms did.
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All IP protection measures were mentioned by Other Spatial firms, none by Surveying firms.
Two firms mention their caution when it comes to patenting: “Patenting it is only going to
tell the rest of the world our idea.”19
Reported benefits from innovation
Apart from these innovation outcomes, most interviewees allude to several other benefits
their firm has gained from innovation. A large majority of interviewees refers to innovation
as a key factor to increase their reputation. A client executive from a large Other Spatial firm
says:
No doubt reputation improves; people like to see innovative companies. Customers don’t
always like to pay, but they like to think they are dealing with something new, sexy and
good.20
The CEO of a large Spatial company even goes as far as to say that:
[Innovation] has built our reputation; it is wholly responsible for our reputation. 21
Subsequently it is not surprising that a majority of interviewees report an increase in their
sales and income due to their innovation activities. The CEO of a medium to large Other
Spatial company expresses this short and sharp:
What are the benefits? Survival and growth.22
Another big Other Spatial company even states they have become market leader due to their
innovation.23 An additional benefit from innovation that many firms mention is the
improvement of the firm’s internal processes, such as time efficiency. Many of the
interviewees further report that their innovations have helped them to attract new customers 19 VicSpaSurRz1 20 VicSpaRz3 21 WaSpaRz2 22 WaSpaRz2 23 WaSpaJm1
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or to gain recurring customers. A large Hybrid firm reports that customers stay with the firm
because of “our innovative approach to doing it and our solutions are technically superior to
the others. We were told that”.24 This applies not only to national customers: eight of the
twenty interviewees report that their innovations have contributed to their firm’s
internationalisation.
Further, several human factors are mentioned. Amongst others, a small Surveying
firm refers to self satisfaction as benefit from being innovative.25 Several others refer to staff-
related factors as a result of their innovations, such as staff motivation and staff retention. A
managing director from a small Survey firm says:
I think it is a way of engaging the staff, by having the best sort of stuff is a way of engaging
them and keeping them.26
A medium size Surveying Firm reports that his staff benefitted from their innovations in a
very direct way:
it makes the job easier for your staff which means they are not getting as fatigued, or it is
safer for them, certainly. (...) [We were] able to reduce the risk of injury to our staff, so
things like there is an obvious advantage to you know, protect your staff.27
Figure provides an overview of the reported innovation benefits to the firms.
24 VicSpaSurRz1 25 NswSurJm1 26 NswSurJm2 27 QldSurSS1
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2.4 Innovation enablers
In order to investigate which factors enhance innovation in the industry, participants were
further asked where the ideas for their current innovations had come from and which factors
encourage in innovation in their firms. They identified several internal and external
innovation enhancing factors. Figure X provides an overview of the innovation increasing
factors that were most often pointed out by participants.
Figure X: Reported innovation enablers
External requests from customers
Asked what factors would increase the level of innovation in his firm, one of the interviewees
replied: “A client and two of our key people”.28 This response illustrates our finding that most
innovations were client-driven. When it comes to innovation, most firms are reactive, not
28 VicSpaRz1
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proactive. When asked where the ideas for their current innovations came from, thirteen from
twenty respondents to referred to specific client requests as a source for innovation.
“New ideas are always solution based to the problem that we are faced with. We don’t
sit here thinking up scenarios, we are given scenarios and that is how our innovation
comes up. The trigger is always a problem that comes from an external source.”29
Firms reply to client-driven and client-funded requests and then apply their innovative
solutions again in future projects with future clients.
Networks
The second external factor to enhance innovation was
the use of different types of networks that can roughly
be subdivided into three groups: informal contacts,
formal connections and conferences and trade shows
etc. Examples from informal contacts are friends with
complementary expertise or networks. This kind of
networking is not limited to smaller firms. A medium
to large special company reports:
“We had just had someone in Sydney and done some work with Google search and
the guy had just moved into one of our subsidiaries and he said: when I’m in Sydney
I’ll go and speak to Google and they said oh we are looking for a spatial partner, and
it is all sort of started there. “30
Formal networks include vendors of new equipment or formal cooperation with others
or external advice. When asked for the source of the idea for his organisational innovation, a
large Surveyor for instance referred to a business coach that helped him with this as part of a
government program:
29 NswSurJm3 30 WaSpaRz1
“We were demonstrating [a program] to a friend of mine, he
was blown away by the whole concept and he said: it's a pain
that you can't do searches in such and such way. [Name] did
a prototype a day later, we showed our great capability to a
couple of potential customers and they said: can we have it
now.“ 1
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“[T]hey made four or five recommendations and that was I guess the most
appropriate to start with.”
Further, few mentioned conferences and trade shows but only one indicated they were
a source of inspiration.
Other external enabling innovation factors Further, several other external factors were mentioned, including for instance hiring a
business coach or changes in government regulations. Another factor which enhanced
innovation was government assistance with R&D grants. The CEO of a large Other Spatial
Company for instance, says:
“There is no way we could have done this with the Venture Capitalists, no way,
impossible. So we had to sell, the Australian Government gave us R and D grants, so
we got the largest research and development grants that were going”. 31
Although five companies reported to have received R&D grants and four companies
mentioned to have applied for R&D tax concessions, not much is said about whether this has
helped companies to be more innovative.
Corporate culture
The most mentioned internal factor to enable innovation was a firm’s internal processes and
corporate culture. Some firms report mechanisms they have in place to increase their level of
innovation. A medium to large Other Spatial firm reported for instance:
“I mean we try to promote innovation as a way of thinking, so we have little things
like, we have an email thing called ideas, and anyone who forwards an idea, it can be
an internal idea to make our business more efficient, or it could be an idea from
outside as well. We have got it in people’s KPIs where there is innovation. So they’ve
got to demonstrate that they will put innovation to work. It may have resulted in
31 ActSpaJm1
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nothing, but at least they showed they were trying to be innovative, not just going
through the motions.”32
These ways of increasing innovation are not limited to the larger firms. A small Other
Spatial firm for instance reported to dedicate their Friday afternoon time to non-client related
work to improve their solutions and said about the results:
“What we have been able to do has been fantastic. Things that you would think would
take a long time to do we have been able to make some really significant progress in
just these half day chunks each week.”33
Further, a small Surveying firm, a medium/large Other Spatial firm and a large
Hybrid firm all referred to the use of slack time to invest time into future process. A large
Hybrid company describes this investment as follows:
“They were all probably two or three years ago and this is where we actually had
some spare capacity during the GFC which we were able to deploy into R and D
projects so that when we came out of the GFC we had some new things to put to the
market.”34
Other reported examples of a corporate culture that strengthen innovation include an
inspiring CEO, management who encourages staff to come up with new ideas and staff that is
motivated to find new and innovative solutions.
Internal ideas from executives or staff Apart from the general company culture, several respondents refer to specific ideas that were
put forward by either executives or staff. A small Surveyor for instance reported coming up
with an innovation while teaching:
32 WaSpaRz1 33 VicSpaRz2 34 WaSpaSurRz1
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When I was teaching, …, I was teaching surveying to builders and we would have to do, …,
some site plans and so trying to teach them how to draw a site plan highlighted to me how
hard it is without the technology and also how easy it is without the technology if you
concentrate on different things (...)35
R&D investments Further, eight companies report their monetary and/or time investments in R&D as the source
of their current innovations or as a factor enabling innovation in their firm. Examples include
conducting an industry survey, having an R&D subcommittee or staff, researching the
legislation to discover possibilities and allocating staff time to work on an experimental
program.
Other internal factors
Further, a very wide range of other factors enhancing innovation are mentioned. Three firms
for instance specifically mentioned hiring staff with a specific expertise. Other factors that
were reported to have contributed to innovation in the firms include having good industry
knowledge, reading (technical) publications, having a highly qualified staff, good governance
or a good board and more individual factors such as a personal reward of achievements or
kudos from peers.
Another factor encouraging innovation that was mentioned is the need to respond to market
pressure. Most interview participants, especially Surveyors and small firms, reported the
competition rates to be (very) high. This high competition makes it important for firms to stay
at the cutting edge of technology and to find the best and most efficient solutions to
problems. As one of the interviewees phrased it when asked which factors encourage
innovation is his firm:
“External forces such as price of jobs and things like that (...) the bigger picture is to
be competitive in the industry, and cost effectiveness.”36
35 QldSurRz1 36 VicSpaSurRz1
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Most firms stated that they were early to adopt new innovations and three firms related the
market pressure directly to innovation. A small company describes innovation as the reason
for their survival37 and a large Other Spatial company says:
“I would say that we tend to do it more out of necessity or you know you have to be
unique to innovate in order to keep up, so I guess that is there.” 38
Figures X and X provide an overview of the reported competition rates in the industry
Figure X: Reported competition rates by firm type
Figure X: Reported completion rates by firm size
37 NswSpaJm1 38 VicSpaRz4
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2.5 Innovation barriers
After identifying factors that stimulate innovation, participants were asked which factors
inhibit innovation in their firms. Chart X provides an overview of the mentioned innovation
barriers.
Chart X: Reported innovation barriers
Time or money constraints
Time and monetary constraints proved to be the greatest barrier for the interviewed
companies. The necessity to maintain their cash flow is especially important for small firms:
eight out of nine small firms reported this as an innovation barrier, while only five out of
thirteen medium to large firms considered this as a concern. One of the interviewees
describes this as following:
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[I]nternally we might slow things down on the innovation if cash flow becomes an
issue; then we concentrate more on client work. 39
Time and money constraints obstructed innovation equally in Survey and Other
Spatial firms: four out of six Surveying firms, seven out of twelve Other Spatial firms and all
two Hybrid firms described this as an innovation barrier.
Embedded Attitudes and Corporate culture
While respondents mentioned their corporate culture as an
important factor to enable innovation, a firm’s corporate
culture can also form a hindrance to innovate. Several firms
mentioned opposition to the use of new technology or
procedures in their firm as a barrier to innovate. A large Surveyor formulates the issue short
and sharp as “the old "we've always done it that way". 40 This resistance to change is reported
as coming from staff, but also from a company’s management, who is not easily persuaded to
try innovative and new techniques.
Not only the new technology, but also the uncertain outcomescan cause resistance to
innovation. The managing director of a small Other Spatial firm says:
[S]ometimes we get discouraged from pursuing the building of a completely different product
because we’re not sure how it is going to be received in the marketplace.41
The managing director of a large Other Spatial firm reports a similar situation:
[I]f you invest in something and it ends up being a waste of time you are shyer the next time
around, even though it might better, you are shyer. So your corporate memory sometimes
causes issues, and that is why we have probably had about a four year gap where we haven’t
been that innovative, and it is only now we are starting to get back into it.42
39 VicSpaRz2 40 NswSurJm3 41 VicSpaRz2 42 WaSpaRz1
“There is always resistance to change”.
(VicSpaSurRz1)
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Both Hybrid firms, two out of six Surveying firms and three out of eleven Other
Spatial firms mentioned this barrier. As one would expect, interviewees from medium to
large firms reported this issue considerably more often than those from small firms: six out of
ten interviewees versus one out of nine respectably.
Tendering practices of Government and industry
The respondents referred equally often to government as a barrier to innovation as to their
firm culture. This concerned two Survey, one Hybrid and four Other Spatial firms, three of
which were small and four were medium to large. One of their concerns regarded the
government attitude in general, such as its focus on mining and little investment in the
commercialisation of innovation.43 A large Other Spatial company, for instance, calls the
government conservative and tardy, which is an important barrier to innovation, because he
feels that for the government, “process becomes more important than the result.44”
The interviewee’s perceptions of paperwork or procedures are mentioned by others as
well; a small Surveyor for instance refers to the “requirements for tendering as a massive
process that discourages small operators”. In some cases, government regulations could be
perceived as a barrier. A small Surveyor referred to the Surveyor’s Act, which prescribes the
presence of a second person while using GPS instruments for safety regulations. He judged
this to be sensible in cities with much traffic, but not in a paddock.45 Also reported was a
local counsel initially opposing a small Surveyor’s innovative approach46 and government
competition that makes it hard for a big Hybrid firm to compete:
[The government] develop[s] internally procedures and process and procure their
own data through different arrangements (…) so there is no real market edge there
and because of the scope and scale, you can’t compete, the costs basis is a lot lower
for govt data than it is with data that we would acquire.47
43 ActSpaJm1 44 VicSpaRz3 45 NswSurJm2 46 NswSurJm1 47 WaSpaSurRz1
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Other internal and external factors In addition, a number of other issues were mentioned by firms. Three firms reported having
had various technical issues when developing or introducing their innovation. Both one large
and two small companies refer to the company’s size as a barrier; in case of the small firm the
the interviewees referred to a lack of internal skills. Other examples include outsiders not
believing in the innovation or cooperating with a big foreign company with their own
procedures. Further, a respondent mentioned tight costomer requirements:
“I notice people are getting quite prescriptive now about how they want things done
and sometimes you don’t get much leeway to improve the process. You need to follow
what they prescribe.”48
Despite being the greatest enhancer for innovation, some customers can also hamper
innovation, which makes them a powerful factor in the industry’s innovativeness.
2.6 Emerging Issues
Much of the innovation carried by these firms was incremental, often shaped by the need to
ensure the financial viability of the firm such as increased speed, accuracy and efficiency of
work. In addition, the opportunity to develop solutions for new and existing challenges often
led to new way of working, employing new technologies or applying existing technologies in
new ways. The activities engaged in were often not described as innovative, and are
understood as part of continuous improvement in a competitive industry, often to deliver a
quality product, service or solution for returning clients. Early adoption and sometimes even
beta testing of new technologies are activities undertaken.
48 VicSpaRz4
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3. Conclusion
This report presents findings from an exploratory study to identify the innovation activities,
and the enablers and inhibitors of innovation in firms in the spatial information industry.
Face to face semi-structured interviews were conducted with a sample of 20 large and small
diverse firms in the spatial information industry.
In this investigation of innovation in the spatial information (SI) industry, many firms
reported that innovation is a key factor in a firm’s success, helping to ensure the firm’s
survival, attracting new customers, generating benefits such as good reputation, sales, firm
growth, and time efficiency, as well as work satisfaction, staff motivation and retention.
Firms reported multiple forms of innovation including product and service innovation,
process innovation, organisational or managerial innovation and marketing. Most innovations
were new to the firm or new to the industry with few considered radical or new to the world.
Less than half the firms use intellectual property (IP) protection practices with only a few
mentioning patents49.
Both internal and external factors enabled innovation in these firms. Factors internal to the
firms include processes and a corporate culture where ideas were encouraged, generating and
applying ideas from executives or staff, R&D investment of time and money and government
contracts. External enablers of innovation include requests from new and existing clients that
required new solutions, new knowledge from professional networks conferences and trade
shows and government contracts. Barriers to innovation were time and money constraints,
aspects of corporate culture such as embedded practices, and tendering practices.
49 Note, it was beyond the scope of this study for the authors to conduct independent
investigations in the claims of the respondents regarding those activities that were identified
as innovative.
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Based upon these findings we recommend inclusion of measures for the ‘hidden innovation’
in organisational practices, and measures of the internal factors that enable innovation such as
corporate culture and continuous improvement, in addition to innovation R&D projects.
Information gained from this study will be used to develop a framework to assess innovation
in the SI sector and will inform the survey instrument to assess innovation in all firms in the
SI industry.
4. References
• Australian Bureau of Statistics, 8158.0 - Innovation in Australian Business, 2006-07,
http://www.abs.gov.au/ausstats/[email protected]/Previousproducts/8158.0Glossary12006-
07?opendocument&tabname=Notes&prodno=8158.0&issue=2006-07&num=&view=
• Cooperative Research Centre for Spatial Information,
http://www.crcsi.com.au/About/What-is-Spatial-Information
• Fair Work Act 2009, section 23,
http://www.fwa.gov.au/index.cfm?pagename=legislationfwact
• Spatial Industry Business Association, http://www.spatialbusiness.org
• Spatial Industry Business Association, http://www.spatialbusiness.org/aus/Position-
On-Issues
• Surveying & Spatial Sciences Institute, http://www.sssi.org.au/details/cat/8/sub/9.html
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Definition referen
ce?
Inno
vators are th
e first individu
als to ado
pt an inno
vatio
n. Inno
vators are willing to ta
ke risks, you
ngest in age, have
the highest social class, have great financial lucidity, very social and
have closest con
tact to
scien
tific sou
rces and
interaction with
other inno
vators. R
isk tolerance has them
ado
pting techno
logies which m
ay ultimately fail. Fina ncial
resources he
lp absorb these failures. (R
ogers 19
62 5th ed, p. 282
)
This is th
e second
fastest category of individu
als who
ado
pt an inno
vatio
n. The
se individu
als have th
e highest d
egree
of opinion
leadership amon
g the othe
r adop
ter categories. Early ado
pters are typically you
nger in
age, have a higher
social status, have more fin
ancial lucidity, advanced ed
ucation, and
are m
ore socially fo
rward than
late ad o
pters. M
ore
discrete in
ado
ption choices than
inno
vators. R
ealize judiciou
s choice of ado
ption will help them
maintain central
Individu
als in th
is category adop
t an inno
vatio
n after a varying de
gree
of tim
e. This tim
e of ado
ption is significantly
longer th
an th
e inno
vators and
early ado
pters. Early M
ajority
tend
to be slow
er in
the ado p
tion process, have above
average social status, con
tact with
early ado
pters, and
seldo
m hold po
sitio
ns of o
pinion
leadership in
a system (R
ogers
1962
5th ed, p. 283
)
Individu
als in th
is category will ado
pt an inno
vatio
n after the average mem
ber of th
e society. The
se individu
als
approach an inno
vatio
n with
a high de
gree
of skepticism and
after th
e majority
of society has ado
pted
the inno
vatio
n.
Late M
ajority
are ty
pically skeptical abo
ut an inno
vatio
n, have be
low average social status, very little
financial lucidity
,
in con
tact with
others in late m
ajority
and
early m
ajority
, very little
opinion
leadership
Individu
als in th
is category are the last to
ado
pt an inno
vatio
n. Unlike some of th
e previous categories, individu
als in
this category show
little to
no op
inion leadership. The
se individu
als typically have an
aversion to change‐agen
ts and
tend
to be advanced
in age. Laggards typically te
nd to
be focused on
“tradition
s”, likely to have lowest social status,
lowest financial fluidity, be olde
st of all othe
r adop
ters, in contact w
ith only family and
close friend
s, very little
to no
Ado
pter category
Inno
vators
Early Ado
pters
Early Majority
Late M
ajority
Laggards
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