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Why Australian businesses risk extinction as the innovation crisis grows

New survey findings from Miro, the visual workspace for innovation, show Australian leaders and information workers near unanimously agree that innovation is urgent and critical to business success. But a triple threat of economic uncertainty, fear, and outdated business practices, means few are prioritising innovation—defined as the design, development, and launch of new products and services.

Eighty-eight percent of Australian leaders and 76% of information workers said innovation is necessary to win against the competition. And without it, 88% of leaders said companies risk survival in the next five years.

Despite wide agreement that innovation should be a priority, most (73%) believe it falls by the wayside. Why is this?

Economic uncertainty

Seventy percent of Australian leaders said innovation feels like a luxury and not a necessity in the current climate – 13% higher than the global average. What’s more, 65% said their company should pause innovation until the economy is more stable, and 62% weren’t willing to risk prioritising breakthrough innovations – both figures exceed the global average by 10%.

Fear

Seventy-two percent of leaders agreed fear gets in the way of pushing harder to innovate, and 68% said their company is afraid to prioritise innovation – again outstripping global averages by 10%. Fear is also deeply personal: Nearly one-third of leaders worry about derailing their careers or damaging their reputation if innovation projects go awry, while 54% of information workers worry their jobs will be at risk if their company fails to innovate.

Outdated technology and lack of cross-functional collaboration

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Both leaders and information workers agreed the biggest roadblocks on the path to innovation are technological challenges (like legacy tools) and organisational challenges, especially those related to cross-functional collaboration. Thirty percent of leaders cite technological hurdles, and 25% cite organisational hurdles. Similarly, 31% of information workers cite technological hurdles, and 31% cite organisational hurdles.

“It’s clear that Australian enterprises are conflicted,” said David Oakley, Head of APAC at Miro. “Leaders and information workers agree that innovation is critical, with many saying their companies won’t survive the next five years without making substantial changes to their innovation strategy. But their ability to innovate is being deeply hindered by a potent combination of economic uncertainty, fear, and outdated technology. Australian leaders are noticeably more apprehensive towards innovation than leaders in other countries and they need to overcome this fear and take bold action if they’re to remain competitive and relevant on the global stage.”

“Innovation is an existential crisis for companies today – those that fail to meet the moment will soon be extinct,” said Paul D’Arcy, Miro’s Chief Marketing Officer. “Fortunately, in uncovering the obstacles that organisations encounter on their path to bringing new products and services to market, the data also offers insight into how to face these challenges. By prioritising these solutions, companies can chart a course not just to survival, but to generational success.”

How can companies overcome the innovation crisis?

Survey findings show that organisations are not managing innovation at scale or on a breakthrough level. Miro believes that in order to overcome the innovation crisis, companies need to:

  • Be clear on strategy and communicate it throughout the organisation
  • Develop a diverse portfolio, including pursuing breakthrough bets with confidence
  • Streamline cross-functional product development processes, optimising for velocity and customer-centricity
  • Address the core drivers of fear, and work to normalise failure and failing fast
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