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Lessons in innovation from the continent

Just 50 years ago, New Zealand was outpacing Scandinavian countries – but differing attitudes to innovation have seen a sizeable gap open up, and not to our advantage, says Professor Kenneth Husted.

Just 50 years ago, New Zealand was outpacing Scandinavian countries – but differing attitudes to innovation have seen a sizeable gap open up, and not to our advantage, says Professor Kenneth Husted.

"We need to think of innovation as a space we can put money into and capture value from," said the newly-appointed co-director of the University of Auckland's Business School Centre for Entrepreneurial Learning.

"The trick is to foster these competencies so that the ability to deal effectively with risk and uncertainty and to collaborate locally around innovation becomes widespread."

Husted was previously research director at the Copenhagen Business School's Management of Innovation and Knowledge (MINK) research group. While he says motivation for New Zealand to lift its game may come from comparisons with Australia's economic performance, we need to find our own solutions, and Nordic countries offer some useful insights.

"Scandinavia is a cluster of societies that have created growth largely through innovation and research commercialisation. They possess diversified economies spanning both traditional and high-tech sectors, robust interaction between universities and industry and a widespread understanding of how to nurture innovation," he said.

According to Husted, innovation can transform the fortunes of any enterprise – not just those in the high-tech sector. Much of the innovation in Scandinavia is taking place in traditional industries. Danish manufacturer Velux, for example, collaborates with universities to refine its range of roof windows products. The company now has manufacturing plants in 11 countries and global industry dominance. Meanwhile, the Norwegian seafood sector has built up a complementary machine manufacturing industry which gives it a competitive advantage.

"Even though New Zealand has one of the world's largest seafood industries, we don't have that depth of support."

He said the process of innovation tended to have a ripple effect throughout an economy – when companies begin to innovate, they collaborate with suppliers and others near them in the value chain, then begin to look to other organisations, such as Crown Research Institutes, for input.

"So, in effect, innovation drags research commercialisation along with it."