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Innovation Series: Digital futures in the spotlight
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HOW digital technologies drive innovation across all industry sectors became much clearer for attendees at the recent Innovation Series event in Brisbane. The ideas put forward by three expert speakers were takeaway gifts for business innovation.
QUT professor Rob Perrons presented the aspirations for the new QUT-based PwC Chair in Digital Economy ahead of the official launch of this innovative and collaborative position. The PwC Chair in Digital Economy has since gone on to draw major digital economy research contracts, including with Australia Post. 
Professor Simon Kaplan, representing National ICT Australia (NICTA) as its skills and industry transformation director, demonstrated how a new digital technology incubation system can utilise available local data with big data on business transformation worldwide to help steer early stage and fast-growing businesses in directions for success.
NICTA has recently become part of CSIRO and the organisation’s expertise is now utilised in the CSIRO’s Digital Transformation unit.
Prof. Kaplan has applied this knowledge to spin out a new incubator and business development hub from NICTA in Brisbane, North Shore Labs, helping companies and their business leaders to better understand the phases of their businesses and drawing on big data to help project profitable growth pathways.
A good example of how NICTA can assist business n digital transformation came from Anisa Makalic, George Weston Foods’ head of supply chain for its Tip Top Australia New Zealand division. Ms Makalic explained how George Weston Foods had transformed its distribution systems, with the help of NICTA, to drive greater efficiencies while also boosting food security and workplace health and safety outcomes.
A theme of the event, from all three speakers, was the need for businesses to keep up-skilling and re-skilling their staff, to meet the demands of digital transformation and capitalise upon opportunities to innovate.
“As the urgency to become a ‘digital business’ intensifies, keynote presenters highlighted the need for business leaders and organisations to address how the digital disruption will affect their organisation, and how they will redefine themselves in the digital economy to ensure their future survival,” Innovation Series co-ordinator, Kellie Heiler of Zernike Australia said.
Prof. Kaplan gave an overview of how Australian business was falling behind in digital transformation.
“The problem is that the Australian economy has lost its competitive edge,” Prof. Kaplan said. “It actually lost it quite a while ago but the mining boom hid this fact – and now the mining boom has imploded and this is becoming a very obvious problem.
“If we want to remain competitive we have to transform our economy and digital is a big part of that. But the transformation is not actually about digital technology, it is about changing all the other parts of your business so you can take advantage of digital technology properly.”
He examined the Australia economy using the Atlas of Economic Complexity – which maps all the product types available in the world, developed by MIT at Harvard University in the US – calling it “probably the coolest thing I have ever seen”.
This map showed Germany producing a huge variety of products, biased towards the hi-tech end of the scale. The visual comparison of Australia’s production showed it well shy of Germany’s achievements, even though the societies considered themselves comparable. Australia tended to add very little value to its resources “which would be far better for our economy,” Prof. Kaplan said. 
“A consequence of that is we have very, very few large companies, but lots and lots of little ones. So our ability to transform and innovate is actually massively reduced,” he said. He pointed out that the proportion of small companies in Germany was about the same – however Germany also had lots of big and medium-sized companies where Australia had comparatively few.
“But you’ll notice that we have almost no mid-sized companies (Germany has many) and that is what ends up hurting us really badly,” Prof. Kaplan said.
He said the digital revolution forced companies to change on two axes: “You not only have to get bigger, you actually have to change your maturity, that is, in the way you use new technology and in the way you understand the opportunities that new technology affords for your business.
“The resources for this kind of transformation are not available to the kinds of companies that need it most. They do not have the money to hire in a PwC or a McKinsey expert, like the big companies do.”
Prof. Kaplan said the digital technologies may provide the very answer to the situation they have created – the opportunity was there to provide the expertise without the people, by using research and big data to deliver capability that up until now has been dispensed by a few highly-paid experts.
This is the basis behind his North Shore Labs SME Business Transformation Tools program, which uses a combination of modelling, analytics and patterns to diagnose businesses.
Research is done using existing data on the business and external information about ‘like’ businesses. The business leader is then shown a ‘pattern’ that describes the organisation and the ways it has been measured. Finally, business leaders are presented with ideas and suggestions to help the business perform better, provided over time in a semi-automatic way.
“We have to understand why it is these patterns are emerging in an organisation, and then we have to repair them so that the organisation stands the best chance of being internationally competitive into the future,” Prof. Kaplan said. “Finally, we can semi-automate the provision of advice (to the business).”
The overall message from Prof. Kaplan, Prof. Perrons and Ms Makalic was that businesses and their leaders in Australia must undergo a mind-shift to meet with the opportunities that the digital world offers.
“We talk about the difference between going digital and becoming digital,” Prof. Kaplan said.
“The difference is that going digital you keep doing what you are doing and whack in some technology on the side. The reality is that is actually what most organisations have done.
“Becoming digital is a fundamental change in your business so that all of the parts of it work properly in a digital economy.”
www.chairdigitaleconomy.com.au
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