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2 Collaboration and Value Networks as the Future for Innovation

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3 Overview 1.The Food and Beverage Industry and FIAL 2.Innovation and collaboration Some research 3.Current FIAL collaborations 4.Lessons learnt and next steps

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4 Australian Food & Beverage Facts 1.Australias largest manufacturing sector at 23.5% of manufacturing and contributing $24B (2013) to the economy 2.Employs > 200 000 in manufacturing with significantly more when agriculture is included 3.13000 manufacturing companies, mostly small medium companies (SME) 4.High business churn (2011-2012 Food) 1794 entries 1554 exits 5.Government objective to double manufacturing by 2050

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5 Food and Beverage Stakeholders National market Retailers & others Industry associations Retailers & others T&L Industry associations T&L International markets Retailers & others T&L Industry internal capability to deliver Suppliers to manufacturers/producers/retailers T&L Transport and logistics SMEs MNEs Networks Research & Development (Academia, research institutes)

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6 Some Dynamics Shaping the Industry Wealth of intellectual capital and resources which are not being fully utilised to deliver maximum return for the industry Collaboration is key to bridging the geographical dispersion of the industry Consumer desires/needs/wants are evolving rapidly and products/services need to keep up

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7 Some Dynamics Shaping the Industry Focus on incremental innovation (safer and less costly) and not new- to-the world innovations Disconnect and lack of cooperation between researchers, education institutes, industry and other support services which restricts their innovative capacity / market opportunities

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8 Some Dynamics Shaping the Industry Growing individual disposable wealth in Asian Countries Increasing availability of imports and ability to export

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9 Some Dynamics Shaping the Industry Depletion of natural resources & population growth Ageing population

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10 Capability/Skills Gaps Impacting Innovation Packaging Technology there is no packaging course in Australia, and companies are continuing to downsize in- house packaging skills Food Safety with fewer students and changes in focus to courses, there is less understanding of food safety with small companies often without technical support in-house or access to Food Technology combining science and engineering appears now to be largely learnt on the job. Few pilot plant facilities exist and few in-company placements for students Project Management basics of how to be efficient and take an idea to market seem to be confined to pockets within the industry Commercialisation how to scale up from an idea to reality and gain the science that supports capability Business Strategy ability to work on the business to stay relevant and sustainable vs being good at business today

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11 Innovation Presentation title | Presenter name 2014 ARC Advisory Group

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12 Innovation Presentation title | Presenter name

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13 Connectedness 13 Hargraves Institute 2013

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14 Connectedness 14 Hargraves Institute 2013

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15 Entrepreneurs and inventors are no smarter, no more courageous, tenacious, or rebellious than the rest of us they are simply better connected Andrew Hargadon How Breakthroughs HappenThe Surprising Truth About How Companies Innovate, Harvard Business School Press, 2003.

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16 Invisible in the formal structure Powerful through their networks Innovation Catalysts

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17 What you get from mapping Innovation Catalysts Ideas only become valuable once implemented Innovation Catalysts turn ideas into action Innovation Catalysts arent self appointed. Use peer- nomination to reliably identify the real Innovation Catalysts. Analyse the nominations and determine the reach and influence of Innovation Catalysts Investment in those people who are most influential in their business unit or location / business unit Who are the Innovation Catalysts here? Hargraves Institute 2013

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18 Business v Researcher Measures and Drivers

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19 Who are the Innovation Catalysts here? Hargraves Institute 2013

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20 Innovation a network of collaborators Presentation title | Presenter name Jean Franois Lacoste-Bourgeacq

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21 The internal part of the Innovation Connectome Beyond people availability and their relevant expertise in the delivery of innovation, the following additional features shall be considered: Creative thinking Balance of right-brain, left-brain (analysis & intuition) Organizational and innovation management skills Resilience Execution skills: Turning ideas into viable products and services Flexibility Customer sensitivity Networking & teamwork skills Turning ideas into new businesses Entrepreneurial skills, self-starters Political savvy Neuronal Innovation the Next Big Thing After Open Innovation By: Jean Franois Lacoste-BourgeacqJean Franois Lacoste-Bourgeacq

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22 Networks Across Australia

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23 Innovation and the community Companies are widely perceived as prospering at the expense of the broader community Companies must take the lead in bringing business and society back together.. Yet we still lack an overall framework for guiding these efforts, and most companies remain stuck in a social responsibility mind-set in which societal issues are at the periphery, not the core. The solution lies in the principle of shared value (emphasis added), which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking. Creating Shared Value by Michael E. Porter and Mark R. KramerMichael E. PorterMark R. Kramer Harvard Business Review Jan 2011

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24 Ways of Behaving to Achieve Outcomes Communicative and sharing of information and knowledge Optimistic, energetic and passionate - about the future of the industry

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25 Ways of Behaving to Achieve Outcomes Consultative to enhance and support the skills in the industry Outcome focused for industry success Accountability to each other and the industry

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26 Ways of Behaving to Achieve Outcomes Integrative and transparent to establish an environment of trust and collaboration Encouragement of active participation and contribution

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27 Project- SME Solution Centre Technical services and technology access and capability, coupled with technical or business training to address a technical challenge or innovation to provide commercialise outcomes for SMEs One size doesnt fit all but combined options and capabilities give wider opportunity for engagement and support Geographic location has enhanced reach and influence to engagement Currently 10 projects in consideration or progress from Tasmania to Cairns covering new horticultural crops to development of new processing technology

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28 Project Collaborative Ring Workshop Using a peer learning format developed in the US, a group of companies share challenges and solutions Pilot workshops have been run in several Australian cities where companies were asked to share 2 challenges each with peers from industry, with at least one challenge being export related For every challenge, there were 2.5 - 4 solutions generated by peers >$10m in potential savings and/or new revenues Next steps are ongoing connectivity to continue business support and develop local clusters

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29 Innovation Catalyst Program FIAL Food Futures A Catalyst Approach Tested with 15 Food companies delivered >$15M in value Increases the success by empowering businesses through sharing information and building capability over a 6 month duration Understanding current performance and identify where to focus to: Develop people Build new capabilities for the future Access new information and contacts FIAL is supporting: 12 Clusters with 1 cluster per state Cluster 20+ companies 15 scholarships in each state for SMEs 5 companies recruited from large companies Open to all companies in the Australian Food & Beverage sector

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30 Lessons Learnt Multiple solutions are needed to support the range of opportunities New ventures can create strange bedfellows that need time to learn and work smoothly together Start working together assuming positive intent and mutual benefit Key leaders are always needed but cant be the only drivers While its not always equal in capacity, everyone brings benefits and capabilities that are needed by the group

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31 Next Steps Form broader, more virtual clusters of practitioners that share learnings and benefits Continue to foster the connections from the Collaborative Rings and catalyst clusters Complete a base line survey on industry reward for thought change in collaborations and clusters Develop additional options for connection and champion cluster initiators where practical

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32 FIAL Team t+61 3 9479 6043 emirjana.prica@fial.com.au wwww.fial.com.au Thank you