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The Institute of Public Accountants is using its 2016 pre-budget submission to encourage the government to support innovative small-to-medium enterprises (SMEs).
CEO Andrew Conway noted the need for Australia to develop a sound public policy that encourages innovation among SMEs.
“Around 10 per cent of Australian businesses produce innovative goods and services, while between 16 and 21 per cent innovate in their underlying business processes," said Mr Conway.
“Even if Australian SMEs are not the initial investors or innovators, they can still capture some of the value of innovations developed elsewhere," he added.
According to Mr Conway, innovation policy must include measures to encourage diffusion and uptake of existing innovations to a broad range of firms, as well as encourage new innovations themselves.
“Firms that can adopt continuous improvement methods to embed incremental innovation can generate large productivity improvements.
“SMEs are an excellent starting point. Large firms often find it hard to change their business model to capture value, but SMEs can change them more easily."
Mr Conway acknowledged the role of the government and the recently announced innovation statement.
“We believe that the government plays an important role," he said.
"They can provide strong research and development support, enabling better linkages between cutting-edge universities and industry; provide support to firms to adapt existing technologies and innovation; and encourage firms to develop their ability to search for new options, evaluate them and successfully implement and adapt them to their specific context."