Words by Ian Dover
General Manager – Industry Implementation, METS Ignited
In Europe and North America, the term ‘cluster’ has been used for 25 to 30 years to denote the coming together of suppliers, customers, researchers, government and community to do things within industry sectors much faster than they’ve ever been done before.
Here at METS Ignited, we want to introduce that into Australia’s mining equipment, technology and services (METS) industry to help make it more internationally competitive.
We have a saying within our organisation. We pose it as a question: Why should people collaborate? And the answer is, because it’s faster than competing. There’s no denying that collaboration enables you to achieve an end solution much, much faster than when trying to do it alone with limited resources and limited capability.
One of our key objectives is to accelerate the rate of commercialisation of Australian innovation in the METS sector. And that comes from the fact that, in Australia over the last certainly 30 to 40 years, there’s been a lot of money going into research but the country hasn’t really seen the benefits of that in terms of commercial outcomes as a result.
We need to move right away from this concept that the researchers do the research and then commercialise it, and instead move towards a collaborative approach to innovation where we understand the customer needs right from the start.
Involve them in identifying the main challenges, really understand what problems need to be solved – which customers would be willing to put money on the table to solve – and then develop a solution.
That way there’s a very high likelihood that it’s going to end up in industry and be commercialised. Now that’s a great foundation for successful innovation.
Moving in the same direction: Ian Dover says collaboration trumps competition when it comes to innovation.
But first you have to understand what your ‘core competency’ is. What is it that really sets you apart from everybody else? And then if you get numbers of companies that have different core competencies to come together, you can bundle their products and services together to open new markets. That’s what the Europeans have done – and done really well.
They started off with focusing in local areas and regions – maybe supplying an industry like the North Sea oil, or automotive in Germany – but when they come together, they really understand what the problems are that the industry has. While solving these problems they can join forces and sell totally new things that open markets outside of their region.
Australian industry – particularly our SMEs – are very competitive and fiercely independent. And while that might be fine within Australia, it means that we’re not really going to be highly competitive against other suppliers from overseas on the international market.
Of course, the thought of collaboration can seem a little intimidating to some businesses and one of the biggest reasons for that is intellectual property. Australians don’t like talking to others if they think they’re going to give away some secrets about their innovation or their business model.
Innovation is not only technical. A lot of innovation is around business models. You’ve only got to look at, say, the likes of Airbnb. Their success is not around the technical stuff – but around their business model and the way they’ve applied technology.
Another barrier we need to overcome is that traditional view that our market is just Australia. Many companies aren’t that inspired at looking to international business.
What we’re finding though is that the younger demographic – METS companies where the founders are probably in their 30s and 40s, or even 20s and 30s – are much more inclined to have a different view of intellectual property and international opportunity.
In particular, they understand that IP can change very rapidly and if they don’t act to capitalise on it within a reasonable time frame, they’re likely to lose their edge anyway.
Because if you’re not capitalising on your IP – and you get a relatively short space of time to do that, maybe one or two years – the chances are that someone else is going to come up with something similar.
But even in the big companies, a shift is starting to occur.
There’s a saying that used to be around in the mining industry: “the big miners like to be first to be second”. That they’re never going to risk innovation in the first instance – that they’re always going to look to someone else to do it and then they’ll become a fast follower.
That feeling, that philosophy, is starting to change. A number of the big companies now are realising that if they’re going to compete with other miners internationally – and the mining industry is becoming more competitive now – that they really need to find a new way to engage with small- and medium-sized innovative companies in order to get a faster and better result.
So, the mining companies themselves are starting to realise that they need to be competitive and they need to be adopting innovations before others, otherwise they’ll get locked out of certain mining opportunities too.
Every couple of years, we run a survey through one of the consulting groups that works with the international resources sector and mining executives around the world. In it, there’s a question: How critical will innovation be over the long term?
In 2013, it was 37 per cent of executives who said innovation was critical. In 2015, it was 41 per cent.
In 2017, 62 per cent of executives surveyed said innovation was critical to their success going forward. That’s nearly doubled in four years.
While a handful of the big companies do invest in innovation, often it is outsourced to SMEs.
So they’re going to be looking to their suppliers to provide that innovation. It’s up to suppliers to then attract the attention of their customers with innovative solutions that are safe, extremely cost-effective and integrate well.
Ready or not, innovation is the way forward. And a collaborative approach is going to be essential to get there.