Innovation 'paying off' for NZ businesses

JOHN KIRK-ANDERSON

GREAT IDEA: Christchurch serial entrepreneur Grant Ryan on his creation, the Yike Bike, a fold-up electric bike which is in global demand. Innovation is the key to success, Ryan says.

Relevant offers

Almost half of New Zealand businesses consider themselves innovative but Kiwis still trail Australians when it comes to innovation.

Statistics New Zealand's Innovation Report released yesterday shows 46 per cent of New Zealand business innovated in 2009, whether it was creating new products or improving manufacturing.

It appears to have paid off, with innovative businesses significantly more likely to report increased profits, market share and sales compared with non-innovative businesses.

Of the surveyed businesses who did innovate, 90 per cent said they did so to increase revenue and that the majority of ideas, 74 per cent, came from staff.

However, the number of business innovating has remained static since 2005 and New Zealand still trails Australia, where 52 per cent of companies say they innovate.

New Zealand businesses spent $2.5 billion on developing new products in 2009, only 0.5 per cent of total business spending. This spending was unevenly distributed, with innovative businesses spending an average of $131,000 each on product development compared with just $14,000 by non-innovative businesses.

Telecommunications was New Zealand's most innovative industry, with 79 per cent of businesses claiming to have made innovative changes in 2009, with the IT and film industry also reporting high levels.

The forestry industry was the least innovative, at only 16 per cent, followed by agriculture and retail, at 31 and 36 per cent respectively.

Christchurch serial entrepreneur Grant Ryan has made a career out of innovation, last year launching the YikeBike, a world-first electric half-penny designed for alternative transport in congested cities.

YikeBike received international media attention and hundreds of orders have flooded in from Europe, with commercial production starting in the next three months.

Yesterday, Ryan said that without innovation New Zealand businesses had nothing different to sell and could not compete.

"I can't believe people that go into business and try to do the same as everyone else," he said. "You're never going to succeed like that."

He pointed to the New Zealand film industry during the past 20 years as proof of the value of innovation.

"It didn't really exist 20 years ago and now we are world leaders because of innovation."

New Zealanders were good innovators in theory but sometimes struggled to turn good ideas into good business, he said.

Jade Software is one Christchurch company that pours a significant portion of its revenue into innovation.

Jade's chief innovation officer, John Ascroft, agrees that New Zealand companies do not "do innovation" as well as they could, despite a wealth of good ideas. "I think New Zealand businesses still have some of that mentality back from the old trade protection days that it's okay just to just bumble along," he said.

- © Fairfax NZ News