innovation readiness and performance in the spatial ... · innovation readiness and performance in...

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

http://www.crcsi.com.au/

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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

For public distribution

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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


21

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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Figure X: Reported benefits of innovation


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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


25

“[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


26

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


27

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


28

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


29


30

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:


31

[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)


32

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


33

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


34

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.


35

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


36

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


37

Source: Everett M. Rogers, Diffusion of innovations, Free Press of Glencoe, 1962, p. 150.


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