Report: Innovation hype is triggering market skepticism

New report into Australia's top 100 ASX-listed companies shows shareholders are increasingly skeptical about the trapping of innovation

Innovation might the buzzword echoing across corporate hallways today, but a new piece of research on Australia’s top 100 companies shows deep scepticism from shareholders around the benefits of innovation activities on the bottom line.

The new study, which was commissioned by Terem Technologies of Australia’s top 100 ASX-listed companies found 41 per cent have a publicly announced innovation lab, 23 per cent have a venture fund dedicated to innovation, and 69 per cent account on their financial statements for innovation, R&D or related technology.

But what the report also highlighted was that innovation activities such as these are not being rewarded by the share market without the tangible business results to support them.In fact, the report claimed innovation hype is now being viewed with increasing scepticism by the market.

In addition, the report found companies that claimed a large innovation footprint in their communications to shareholders did not necessarily out-perform companies that did not have the same commitment to innovation.

The top five “innovators by press release” identified by Terem Technologies were Rio Tinto, Commonwealth Bank, Amcor, Bendigo and Adelaide Bank and Aristocrat Leisure.

However, companies producing tangible innovation results are being rewarded even when they do not trumpet innovation.

For Terem Technologies CEO, Scott Middleton, the results suggest companies that want to foster innovation must not only demonstrate actual results from these activities, but also put the emphasis on disruption over iterative improvement.

“Companies can’t talk their way to growth,” he said. “For innovation to have an impact on a company’s performance, it must move the company into a significant, growing market. This takes time and commitment. Innovation around process is important, but these days, it’s just table stakes.”

The report was based on analysing the ASX100 over the short, medium and medium to long term (up to five years), looking at public innovation infrastructure, venture capital funds, collaboration with universities, patents field and board composition. Terem Technologies said it also looked at an organisation’s shareholder-focused rhetoric around innovation by analysing financial reports and press releases.

The report also featured a breakdown of the innovation claims of Australia’s top four banks. According to these findings, all four – CommBank, Westpac, ANZ and National Australia Bank – have innovation labs as well as research collaboration programs underway, and both NAB and Westpac had venture funds.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

​ Creating a purpose-driven brand

So you want to be a brand with purpose. But what does it actually mean to build a brand with real meaning?

Paul Chappell

Partner and managing director, Brand + Story

Customer experience crisis: Proactively mitigating the risk of broken promises

Last Friday, three weeks after United Airline’s spectacular customer experience disaster, customers received a letter from the company’s CEO, Oscar Munoz.

The politics of branding

There have been some real doozies lately. I’m speaking of campaigns where brands have dipped their toe in - or jump straight into the deep end – of the political spectrum, aligning with social causes that seem to be the flavour of the day.

Paul Chappell

Partner and managing director, Brand + Story

Grate post, thanks for the post.No matter what your business is, if you do no not rank among the top most search results of Google, Yahoo...

Rahul

Image intelligence:10 must-see infographics for marketers

Read more

Thank you Shane Blandford for carrying my Smarketing vision into KM !

Peter Strohkorb

​CMO Interview: Why aligning sales and marketing drives innovation at Konica Minolta

Read more

Thanks for helping me putting those threads of thoughts together. Simplification and connection - neat idea.

Mark Bayly

Tips from IAG on how to craft human-centred design

Read more

The problem with Box is that they made a couple of big mistakes - they first hired a bunch of unprepared kids and gave them big roles and...

Tim Woods

CMO interview: Why Box's marketing chief is rewarding staff for failing

Read more

At this point, being hit hard will also be subject for a detailed study. In honesty, too early to tell but there are precedents to follow...

Sean Lindeman

Australian Government to abolish 457 visa program

Read more

Latest Podcast

More podcasts

Sign in