Embracing change: case studies on how Australian firms use incremental innovation to support growth

The Embracing Change project fills gaps in our knowledge about innovative activity by Australian firms that is not generally related to R&D and barriers to these forms of innovation. The project focused on gradual (incremental) business change and improvement, and was based on thirty case studies of firms (mostly small firms) chosen for their commitment to continuous business change and improvement.  Breaking away from the usual focus on incremental innovation (simply defined as minor improvements to products and services, as perceived by the consumer), the framework for this project concentrated on the (manager-controlled) internal processes within firms that were conducive to incremental innovation.

Among the findings, incremental innovation was found to be directed mainly towards higher quality or customised products/services and niche markets.  The importance of listening to customers was a paramount factor.  The main barriers to innovation were those of growing a small business, obtaining finance, finding staff, marketing overseas and relying too much on the founder. Knowledge management also proved to be an increasing challenge for firms.  In particular, firms’ abilities to turn what is in employees’ heads (tacit knowledge) into formal knowledge (e.g., written production manuals) that could be accessed by others in the firm, proved to be a major issue.  The management of growth in a small company was also a key issue for the firms studied.

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