Note: This piece was contributed by Warwick Peel of IdeaScale and Gordon Noble of GNBK, and solely reflect the writers' opinions.
While 2020 was cruel to society and harsh for our economy, it also had its benefits - organisations and government agencies went digital overnight, and most say we leapfrogged five to ten years in digital transformation and technology adoption. During 2020, when we were forced to react to reallocate resources and digitally transform, we did so successfully.
Now it's 2021, so rather than react, we need a plan to reboot the economy. We need to focus on harnessing the innovation and those 2020 pivots to focus on solving some of the challenges in our economy like jobs, rebuilding resilience in our infrastructure and redesigning our future industries. Across society we need to continue to concentrate on issues like health and well-being and increase our focus on inequality. We need to ensure that the lessons of the 2019-2020 summer bushfires are not lost and invest resources to protect Australia's biodiversity.
But as we come out of COVID-19 we also need to be aware that things have been changing. As the nation has been dealing with COVID-19, we have also been hit with trade bans in key economic industries including barley, beef, wine, seafood, cotton and timber.
At the same time as our domestic industries are being hit our superannuation funds are continuing to increase their investments offshore. In September 2013 for every dollar invested by APRA-regulated superannuation funds in Australian listed equity, 70 cents was invested in international-listed equity. Today for every dollar invested in Australian-listed equity, $1.20 is invested in international-listed equity. This shift in asset allocation has been slow and steady and reflects that as Australia's superannuation system matures, there is a lack of opportunities in Australia to absorb superannuation capital.
In the investment world, ESG is now widely understood. The shift of capital towards Environment, Social (dividends) and Governance has reached a stage of maturity with responsible investment funds outperforming significantly, as well as an increase in ethical interests from consumers in their superannuation choices.
In 2021 we need to think about how ESG evolves to become what we call EST. How might we reboot to adopt an Environmental, Social and Technology mindset and implementation plan?
The "G" in ESG is commonly thought of as representing board governance. Replacing G with T reflects that technology and innovation need to be the responsibility of a company board.
Three ways we can innovate towards a higher impact reboot for our economy is to harness one of Australia's winning traits: creativity. Australia needs to leverage its greatest resources to reboot the new economy with a focus towards innovation and transformation capital. Here's a few ways to execute the reboot:
- Recognise the importance of capital; we need to harness transformation capital, to invest in our innovation capital. This means assessing the capacity of companies from both an ESG and EST lens as well as actively investing in new companies and establishing new markets in areas such as Natural Capital.
- Hackathons or Design Sprints: we need to set aside thinking time, we need to step away from the day to day, and allow our people to think about new ideas, to test a hypothesis, to run Proof of Concepts (POCs), and to invest in prototypes. Many companies are now allowing employees a 4-day week. What if we took a step towards this and allowed employees half a day to think and present ideas?
- Crowdsourcing Ideas: we can unlock creative solutions and foster collaboration to enact ideas into action for those with greatest impact. With clients such as NASA, US Navy, Federal and State agencies in Australia, and ASX listed companies, IdeaScale does this with governments and industry across the world with employee, customer and citizen-led crowdsourcing.
The pandemic has shaken the world. The global economy is uneasy and geopolitics uncertain. In the aftermath of covid-19 Australia needs an innovation plan that links to capital. With a reboot underpinned with an innovation plan, our nation can solve our issues faster and harness our national interests, and can again be a builder for our Pacific and Asian neighbours. Australia can become a world leader in creativity and innovation, so let's put our thinking hats on and then execute a plan.
This article was co-authored by Warwick Peel, Innovation Director - Asia Pacific, IdeaScale, and board director for United Nations Association Australia, Victoria, and Gordon Noble, Director GNBK Advisory.