Small changes equal big rewards: Sydney’s $25 billion innovation potential
27 April 2017: An economic heat map identifying Sydney’s innovation hotspots, including two previously unheralded areas, features in a new Deloitte report offering new solutions to unlocking the city’s future growth potential.
ImagineSydney, Create, produced by Deloitte Access Economics and sponsored by the Sydney Business Chamber and University of Technology Sydney (UTS), draws the connection between innovation and empowerment, and the importance of businesses innovating in whatever capacity to create and capture value and deliver new opportunities.
“It’s important to remember that innovation doesn’t necessarily mean a new invention,” said Deloitte Sydney Manager Partner Dennis Krallis. “Innovation is about doing something smarter or simply changing a process or improving a management method, and the business payoff can be spectacular.
“Sydney’s one of the world’s leading cities and an innovation pioneer, but businesses need to do more to keep us at the top to keep our productivity and standard of living high,” he said.
The Executive Director of the Sydney Business Chamber Patricia Forsythe said: “It is clear that the economic benefit is being measured in many ways in precincts where collaborative spaces are being developed, including in new buildings at Barangaroo, spaces in Haymarket and Ultimo, and in the innovation hub at Macquarie Park.”
Dean of the Business School at UTS Professor Roy Green said: “We know that innovation thrives in a collaborative context –both from survey evidence, and anecdotally. People in concentrated geographical areas can generate high levels of innovation and they can connect because they are in close physical proximity. There’s really no substitute for that proximity, though it can be supplemented by virtual connections through the Internet too.”
This first of four ImagineSydney reports, Create finds that even small changes through focusing on innovation could have huge economic benefits. It finds there are 138,000 businesses in Sydney that could be described as non-innovators, which over the past three years have not made any significant change to their offerings, processes, organisation or marketing.
If just 10% of these did something new every year, Deloitte Access Economics estimates that Sydney’s gross regional product could increase by $25 billion.
“This is not just about big companies making changes. Smaller players doing small things are also innovators. It could be anything from better product marketing, or refining staff rosters to new technology,” said Krallis.
The Create Heat Map included in the report measures innovation performance, based on innovative activity per employee, across the Sydney basin using a range of indicators from sources including the Australian Bureau of Statistics, Innovation Australia and the Office of the Chief Economist.
Sydney’s CBD, including Haymarket and The Rocks is the number one innovation hotspot, followed by Macquarie Park, North Sydney, Pyrmont, Surry Hills and Neutral Bay.
But the list also includes surprise locations such as Rydalmere and Turrella – Rydalmere because it is home to a Western Sydney University campus and also includes the Homebush precinct, while Turrella wins a place because of the neighbouring Sydney airport and being home to many logistics businesses.
Sydney’s top performers include:
- Sydney CBD (including Haymarket and The Rocks) Home to many large institutions, including the public sector bodies, major banking offices, as well as key property and infrastructure players
- Macquarie Park (including Marsfield and North Ryde) Includes educational, health and technology institutions, including Macquarie University and Macquarie University Hospital
- North Sydney includes health institutions, technology and professional services organisations
- Pyrmont (including Ultimo) Recognised by the NSW government as a knowledge hub, the home of digital and creative start-ups and the University of Technology Sydney
- Surry Hills Home to publishing companies and some of Australia’s fastest growing start-ups
- Neutral Bay (including Kirribilli) Featuring a range of professional services and technology businesses, including innovative digital consulting and ‘internet of things’ businesses, as well as cloud-based construction tender and contract management businesses
- St Leonards Home to Royal North Shore Hospital, a range of supporting medical services, as well as a number of advertising and media companies
- Alexandria and Redfern (including Erskineville and Chippendale) Home to major fashion retailers, appliance and equipment suppliers as well as Australian Technology Park, the NSW Government’s transport and logistics knowledge hub
- Rydalmere and Homebush Bay (including Ermington) home to the Western Sydney University southern campus, the Olympic Park precinct, logistics businesses, a leading international electronics and systems group, and a fire safety equipment manufacturer
- Turrella (including Wolli Creek, Arncliffe and Bardwell Valley) Neighbouring Sydney Airport and its domestic and international terminals, Turrella is home to many logistics businesses, as well as other industrial operators.
“We’ve clearly identified innovative activity is not just confined to one or two areas and by measuring activity on a per employee basis you can see where somewhere such as Turrella deserves its place,” Krallis said.
The report has also identified where collaboration is a significant driver of creating and capturing value.
ImagineSydney urges a new focus on innovation, putting forward recommendations for business and Government to remove existing roadblocks and look beyond existing business models.
The Create edition of ImagineSydney will be followed by three others covering the topics Work, Live and Play.