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Integrating Innovation The high-quality paperback edition of this book is available for purchase online: https://shop.adelaide.edu.au/ Contents Chapter Abstracts vii Notes on Contributors xiii Foreword Megan Antcli ff , Director, Strategic Projects and Innovation, Director, Tonsley Redevelopment, Department of State Development, South Australia xix Introduction 1 Th e idea of integrating innovation: Entrepreneurship and a systems perspective Göran Roos, Th e University of Adelaide Allan O'Connor, Th e University of Adelaide 3 Part 1: Regional-level perspectives 2 Moving beyond policy path dependency: An approach to fostering innovation in South Australia Jane Andrew, University of South Australia 35 3 A patent perspective of South Australian innovation: An indicator within the regional innovation system story Kym Teh, Th e University of Adelaide Göran Roos, Th e University of Adelaide 63 4 Innovation system symbiosis: Th e impact of virtual entrepreneurial teams on integrated innovation and regional innovation systems Gavin Artz, University of South Australia 91 Part 2: Firm-level perspectives 5 Do clusters matter to the entrepreneurial process? Deriving a conceptual model from the case study of Yalumba Huanmei Li, Th e University of Adelaide Allan O'Connor, Th e University of Adelaide 119 vi Integrating Innovation 6 Operationalising innovation: Hotwiring the creative organisation Fiona Kerr, Th e University of Adelaide 159 7 Business model innovation in nonpro fi t social enterprises Eva Balan-Vnuk, Th e University of Adelaide Peter Balan, University of South Australia 205 Part 3: Innovation management perspectives 8 Complex systems adjusting stability levels and providing entrepreneurial opportunities Vernon Ireland, Th e University of Adelaide 235 9 Intellectual capital system perspective: A case study of government intervention in digital media industries Graciela Corral de Zubielqui, Th e University of Adelaide Allan O'Connor, Th e University of Adelaide Pi-Shen Seet, Flinders University 277 10 A diagnostic tool for assessing innovation readiness Paul Shum, University of Western Sydney 303 11 Developing a framework for the management of Critical Success Factors in organisational innovation projects: A case of Enterprise Resource Planning systems Jiwat Ram, Th e University of Adelaide David Corkindale, University of South Australia 327 Conclusion 12 Innovation and entrepreneurship: Building the systems and strategies for South Australia Allan O'Connor, Th e University of Adelaide Göran Roos, Th e University of Adelaide 357 vii Chapter Abstracts I NTRODUCTION 1 — Th e idea of integrating innovation: Entrepreneurship and a systems perspective Göran Roos, Th e University of Adelaide Allan O'Connor, Th e University of Adelaide Th e aim of this chapter is to set the context for the content to follow. It discusses the origin of the idea for this work and the South Australian contextual setting that has inspired the concept that innovation is integrated through fi rm and socio-economic levels. It pro ff ers the ideas that entrepreneurship is a key contributor to an ecosystem that integrates innovation and that the tools of intellectual capital management are important for understanding how that ecosystem functions to integrate innovation. It then provides an overview of the chapters and outlines the structure of the book before concluding with the challenge that this endeavour undertakes. P ART : R EGIONAL - LEVEL PERSPECTIVES 2 — Moving beyond policy path dependency: An approach to fostering innovation in South Australia Jane Andrew, University of South Australia Th is chapter examines the theoretical and policy discourse that has informed South Australia's innovation policy since the 1980s. Th e recommendations and policy strategies to support innovation have changed little during this time, and yet South Australia's productivity improvement through innovation still lags behind other states and economic regions of similar size. Th is chapter considers where impediments may lie in South Australia's innovation system and argues that there is a need viii Integrating Innovation to move beyond the current policy path dependency that relies upon behaviours and attitudes that have traditionally served to maintain stability and control. Th e state needs to invest in gaining a di ff erent and more holistic understanding of the contribution and value contributed by diverse knowledge taxonomies, from both the HASS and STEM disciplines, and the multiple monetary and non-monetary transactions that inspire and support innovation across the economy. 3 — A patent perspective of South Australian innovation: An indicator within the regional innovation system story Kym Teh, Th e University of Adelaide Göran Roos, Th e University of Adelaide Th is article explores innovation performance in the context of patent data from South Australia (SA). Th e analysis highlights underlying assumptions and limitations of such an approach, although certain conclusions concerning that state's innovation trajectory are suggested. Integral to this exploration are the economic, regulatory and constitutional features that a ff ect and de fi ne the nation of Australia, of which SA is one of six states. Th e SA patent activity analysis launches a discussion of the state's regional innovation system (RIS). Uniquely, this research exploration brings together the two elements of examining an innovation system unit that is smaller than a nation and linking that with the state's innovation performance. 4 — Innovation system symbiosis: Th e impact of virtual entrepreneurial teams on integrated innovation and regional innovation systems Gavin Artz, University of South Australia Th e experience of technology entrepreneurship in Adelaide, South Australia, hints at a symbiosis between the evolution of a regional innovation system, the changes that such a system causes in managerial and cultural forms at the company level, and how these new collaborative forms then feed back into the regional innovation system as well as link to national and international innovation networks. Th rough an examination of the MEGA entrepreneurship education program and the working relationships between organisations and companies that have grown ix Integrating Innovation around it, speci fi cally the digital media company rezon8 , virtual entrepreneurial teams enabled by cross-institutional and cross-organisational collaborations are explored. P ART : F IRM - LEVEL PERSPECTIVES 5 — Do clusters matter to the entrepreneurial process? Deriving a conceptual model from the case study of Yalumba Huanmei Li, Th e University of Adelaide Allan O'Connor, Th e University of Adelaide Although the importance of industrial clusters in inspiring regional entrepreneurship has been increasingly recognised, little is known about the dynamic mechanism through which the cluster involvement of a fi rm in fl uences its entrepreneurial process. Th is chapter initiates an attempt to conceptually model the interactions between multidimensions of industrial cluster involvements, a fi rm's entrepreneurial process and its entrepreneurial performance. Using Yalumba as a case study, our analysis suggests the feasibility and practicality of the proposed model. We subsequently discuss the implication of the chapter for future industry cluster and entrepreneurial process research and practice. 6 — Operationalising innovation: Hotwiring the creative organisation Fiona Kerr, Th e University of Adelaide In order to thrive in the twenty- fi rst century, organisations need not only to be able to recognise complexity and sustainability as key components of business, but also to be able to foster and harness them. Th ose who operate successfully in such an environment go beyond organisational learning and strategy planning to building adaptive, innovative capabilities which result in sustained competitive advantage. Th is chapter explores how such adaptation and innovation are coupled with a capacity for strategic innovation and the ability to 'hotwire' across industry boundaries, and how such abilities ultimately decouple organisations from the con fi ning need to know what is over the horizon in order to be able to deal with it. x Integrating Innovation 7 — Business model innovation in nonprofit social enterprises Eva Balan-Vnuk, Th e University of Adelaide Peter Balan, University of South Australia Nonpro fi t social enterprises innovate their business models; however, little is known regarding why they do this, nor what capabilities they need to innovate their revenue-generating activities. In this qualitative exploratory research, we examined fi ve nonpro fi t social enterprises in South Australia, and found that these organisations consciously innovate their business models for two key reasons: to remain fi nancially viable, and to expand the delivery of important services to the community. In addition, we identi fi ed six capabilities that enable nonpro fi t social enterprises to support their business model innovation. P ART : I NNOVATION MANAGEMENT PERSPECTIVES 8 — Complex systems adjusting stability levels and providing entrepreneurial opportunities Vernon Ireland, Th e University of Adelaide Th e chapter primarily focuses on entrepreneurial opportunities being released by complex social systems changing stability levels. Th ese are driven by contextual and environmental pressures and societal in fl uences. Models of changes to socio- technical systems are presented. Firms and individuals need to both quickly sense the change in a complex system, create meaning from the change in order to identify a direction of that change, and respond by initiating processes that secure entrepreneurial opportunities. Exploiting changes in complex systems is assisted by skills in recognising how to manage complex systems. 9 — Intellectual capital system perspective: A case study of government intervention in digital media industries Graciela Corral de Zubielqui, Th e University of Adelaide Allan O'Connor, Th e University of Adelaide Pi-Shen Seet, Flinders University Th is research explores how a systems analysis informs strategies of government program intervention using the case of a government-led initiative for the creative xi Integrating Innovation industries development in South Australia (SA). We contrast an intellectual capital (IC) perspective employing IC analysis tools (Roos, Pike, & Fernström, 2005) with a complex systems analysis model (McKelvey, 2004). Th e government's interventions addressed major gaps in the sector; and the IC analysis was able to create deeper insights into the resources and capabilities exposing the knowledge resource interdependencies between three major stakeholder sectors. 10 — A diagnostic tool for assessing innovation readiness Paul Shum, University of Western Sydney Using data-mining methods to classify the sampled companies, an 'innovation- ready' category is identi fi ed. Th eir scores in innovation capabilities and environment are consistently higher in all dimensions than that of the 'Non-innovation ready' category. Th is study overcomes problems of previous innovation studies by developing systematically an innovation readiness framework that is based on intellectual capital and captures a more complete set of innovation capabilities with associated enterprise-wide interlocking mechanisms and required cultural change. Th is benchmark innovation pro fi le will help practitioners from SMEs with stringent resource constraints to more accurately and consistently target important areas for improving their organisation's innovation capabilities. 11 — Developing a framework for the management of Critical Success Factors in organisational innovation projects: A case of Enterprise Resource Planning systems Jiwat Ram, Th e University of Adelaide David Corkindale, University of South Australia Th e complexities of the organisational innovation process of ERP systems pose serious challenges for the uptake of such innovations in SMEs. Researchers have therefore identi fi ed a large number of critical success factors (CSFs) to help achieve success at various stages of this innovation process. However, little is known about how the identi fi ed CSFs are to be managed. We present a framework for the management of nine commonly identi fi ed CSFs. Th e proposed framework will help SMEs in putting together an action plan to successfully manage the ERP innovation process. Th e framework can also serve as a basis for the development of a theory of the management of CSFs. xii Integrating Innovation C ONCLUSION 12 — Innovation and entrepreneurship: Building the systems and strategies for South Australia Allan O'Connor, Th e University of Adelaide Göran Roos, Th e University of Adelaide Th rough review of the submitted chapters, a number of key issues emerge that illustrate the di ffi culty of integrating innovation. Of primary importance is recognition that innovation in South Australia (SA) is interdependent with systems that in fl uence the fi rm and individuals, as well as national and international systems of innovation. Intellectual capital is shown to be a useful lens, particularly given that system integration is heavily dependent on the human, relational and structural elements which facilitate innovation. Four strategies for SA are suggested for the development of an assistive ecosystem for integrating innovation, and a future research agenda is mapped out which, if pursued, will strengthen our understanding and engagement with the systems of innovation. xiii Notes on Contributors Jane Andrew is an educator and researcher working at the University of South Australia in the School of Art, Architecture, and Design, where she is the Director of matchstudio, an interdisciplinary research and professional practice studio that supports students' transition from university to work. Jane's early career as a designer- maker, together with her role as Executive Director of Craftsouth (now Guildhouse), inspired her teaching and research career, which focuses on the contribution of 'creative capital' to economic development. Collaborative, trans-disciplinary practice, value networks and systems thinking are other areas of her research focus. In 2004 she was awarded an APAI scholarship and commenced a PhD as part of an ARC Linkage Project at the Centre for Labour Research/Australian Institute for Social Research and the Department of the Premier and Cabinet's Strategic Projects Division. Gavin Artz is an economic development professional exploring large-scale innovation. He works for the South Australian Government developing and implementing the strategies and policies needed to build an e ff ective regional innovation system. He holds an MBA from the University of South Australia and a BA in Politics from La Trobe University, and is currently a PhD candidate at the University of South Australia researching innovation. Gavin has been the CEO of the Australian Network for Art and Technology and was a founding Director of the Australian Design Alliance. He has been a participant on the FutureEverything Award International Advisory Group (UK), Innovation and Business Skills Australia Expert Working Group, P2P International IP and Commercialisation Forum Steering Committee (UK) and Chair of ISEA2013. Peter Balan joined the University of South Australia following a career in market research, marketing and company management in France, Germany, Switzerland, the UK and Australia. He was the Foundation Head of the University's School of Marketing and the Foundation Director of his university's Centre for the Development xiv Integrating Innovation of Entrepreneurs. His research is in innovation capability, entrepreneurial orientation and business model innovation, as well as in entrepreneurship education. Eva Balan-Vnuk combines qualitative and quantitative methods, namely concept mapping and Qualitative Comparative Analysis (QCA), in her research to investigate aspects of innovation and entrepreneurship, including business models. Prior to academia, Eva spent nine years working for Microsoft in Europe, Middle East, Africa and Asia, in a variety of sales, marketing, strategy and management roles. After having completed her PhD to better understand the business model strategies of sustainable social enterprises, she now works for Microsoft in Australia, working with customers to help them identify ways to become more innovative. Eva is a Visiting Research Fellow at the University of Adelaide. David Corkindale completed a science degree, worked for a pharmaceutical company and gained a Masters in Business and Operational Research (OR) and then worked in OR for a major engineering company in the UK for some years. Becoming interested in marketing, he ended up working in research for the largest advertising agency in London. He moved to be on the marketing faculties of a major Business School in the UK and then in Canada, gaining a PhD along the way, before coming to Australia. He is now Professor of Marketing at the University of South Australia, where he was instrumental in establishing the School of Marketing. He has specialised in the role of marketing in the commercialising of new technology, has done a range of assignments in this and is now undertaking research on choice behaviour online. He has published fi ve books and many papers in academic journals. Graciela Corral de Zubielqui is the Associate Head (Research) and a lecturer in the postgraduate Project Management and Innovation area in the Entrepreneurship, Commercialisation and Innovation Centre at the University of Adelaide. She completed her PhD in the area of innovation, globalisation and SMEs performance. She also holds a Bachelor of Economics (Honours) and a Master in Economics and Business Administration. She worked in projects which linked government departments, industry and university. Her research interests include innovation, knowledge transfer, collaboration activities between government, industry and university, SMEs performance and impact on regional economic development. xv Integrating Innovation Vernon Ireland is Director of Project Management for the University of Adelaide. Previously he has been Corporate Development Director of Fletcher Challenge Construction, responsible for people and business systems improvement in the USA, New Zealand, Australia, Paci fi c and Asian businesses, in the $2 billion pa company; in academe he was the foundation Dean of Design, Architecture and Building at the University of Technology, Sydney. He has conducted sta ff development programs with the Shanghai Construction Commission, Defence Materiel Organisation and Th ales Australia. He supervises seven PhD students, one on linear projects and six on complex systems and projects. He has been awarded the Engineers Australia Medal (2008), the Rotary International Gold Medal for contributions to vocational education (2006) and the Magnolia Silver Medal from the Shanghai Government (2000) for contributions to Chinese overseas relations. Fiona Kerr is a specialist in systems and neural complexity at the University of Adelaide, having spent nearly thirty years in the business world working in the areas of organisational creativity and transformation before entering academia. Th is sometimes meant embedding in an organisation or a bureaucracy for up to three years to assist in innovative systemic change. Fiona still consults to businesses and governments in a number of countries, working with systems complexity on a number of levels, from increasing adaptivity in small organisations to a whole-of-government perspective on their role in enabling and growing innovative capacity, and value chain network analysis. She became interested in the cognitive aspects of leaders who shape innovative systems, and the increase in complexity of sta ff in adaptive organisations, and is now researching cognitive di ff erences in creative leaders. She is a regular speaker on the practices and neuroscience of creating and leading adaptive organisations. Huanmei Li (Mushui) did her PhD at the University of Adelaide. Her thesis is on the innovation and marketing performance of Australian wineries. Speci fi cally her research was about how management practices of wine companies can best leverage region-speci fi c tangible and intangible resources to successfully pursue opportunities and to achieve innovation and market performance. During her time as a PhD student, she was also involved in several projects on the innovation behaviours of SMEs and the wine industry. Currently she works as a project assistant at Vanderlee and Associates and she is Chinese wine market advisor at the Barossa Grape and Wine