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Innovation: Survive or Thrive?
Brannigans
February 2019
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Why is innovation critical to our future?
Increased Productivity
Economic Diversification
Export Growth
Sustainability Wage Growth
INNOVATION
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Industrial Internet Revolution
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NZ invests half as much as other countries in innovationNew target: R&D spend at 2% of GDP by 2027
New Zealand2016 R&D spend % of GDP
1.28%
OECD2016 R&D spend % of GDP
2.40%
Denmark
2x more researchers and 3x more spend than New Zealand
Source: OECD, Main Science and Technology Indicators, January 2017
Human and financial resources devoted to R&D
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Source: ‘Cut to the Chase – Innovation and firm performance’New Zealand Productivity Commission September 2017
The curse of a domestic focused market – putting a lid on productivity and performance
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Flow on effects of technology revolution
DE-MONESTISATION
DIG
ITIS
ATI
ON
DE-M
ATE
RIA
LISA
TIO
N
DE-CARBONISATION
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McKinsey analysis shows scale of impact
Source: McKinsey & Company
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% time spent on activities that can be automated
Source: McKinsey & Company
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Difference in total public spend on training1993-2015, Percentage points
Source: McKinsey & Company
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How do we solve inequality issues?
Source: McKinsey & Company
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The dilemma is the transition, less so the end game
Source: McKinsey & Company
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The increased burden on the state will be enormous
Source: McKinsey & Company
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Intersection and Integration is inevitable – how will your business play in these new eco-systems?
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Integrated value chain for food
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Scale UP
New
Zealand
launching
April 2019
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Pick your partners carefully for this
journeyWhich of these trends do you think will impact your industry in the next ten years?
• 13% big data
• 13% 3D printing
• 23% automation
• 14% machine learning
• 39% cloud computing
• 44% improved connectivity
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Boards play a critical role
Only 35% of boards say they have the right skills and experience to lead their digital future
28% don’t have the right digital capability (37% unsure)
47% of boards receive good quality report and information from management on technology related matters
23% of boards actively participate in security policy
93% of security breaches could have been avoided
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“Thirty percent of participants in
any strategy discussion should be
younger than age 30, because
they are not wedded to the past”.Quote: Briandcolwell.com
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Digital Innovation Sub-CommitteeCONCEPTUAL
Purpose: Proactively manage Digital Innovation evolution / transformation from the Board
Shift it from being buried to visible and aligned organisational wide
Cross organisational approach fostering collaboration, learning and creativity
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Driving Innovation: Questions to ask
✓ Are you actively planning your workforce for transition to automation and up-skilling / re-skilling? Are you active in the global search for talent in new roles involving AI, Big Data, Blockchain for example?
✓ Are you investing in preparing your leaders with new skills for leading through the industrial revolution?
✓ Have you mapped your current and future eco-systems you will be operating in?
o Actively planning your eco-system approach?
o Participation in hackathons, incubators and accelerators?
o Identification of relevant (international) eco-systems partnerships?
o Identification of acquisition opportunities?
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Driving Innovation: Questions to ask
✓ How are you talking about what you do? In today’s language or future?
✓ How are global and sector mega trends impacting your future?
✓ What level of R&D are you undertaking? Application of emerging technologies to:
o New (and adjacent) products and service offerings
o New customer experience / interactions
o Operational efficiency / transformation
o Supply chain interactions and integrations
o Health and Safety
o New business models
✓ Are you innovating simultaneously – product, operational, organisational?