An economic heat map identifying Sydney’s innovation hotspots shows the value of proximity and collaboration in encouraging greater innovation, UTS Business School Dean and innovation expert Professor Roy Green says.
The Deloitte Access Economics report, ImagineSydney, Create, produced with the help of researchers from UTS Business School and with the sponsorship of the Sydney Business Chamber, measures innovation across the Sydney basin and looks at ways to unlock further growth potential.
If just 10 per cent of the “non-innovators” identified in the study did something new every year, Sydney’s gross regional product could increase by $25 billion, the report suggests.
Innovation doesn’t necessarily mean a new invention, and isn’t restricted to big companies, Deloitte Sydney’s Managing Partner Dennis Krallis says. “Innovation is about doing something smarter or simply changing a process or improving a management method – and the business payoff can be spectacular.”
The report estimates 138,000 businesses in Sydney could be described as non-innovators – having not made any significant change to their offerings, processes, organisation or marketing over the past three years.
The heat map identifies the Sydney CBD, including Haymarket, as the number one innovation hotspot, followed by Macquarie Park, North Sydney, Pyrmont/Ultimo and Surry Hills. A number of these hotspots combine to form the ‘creative digital’ precinct around UTS.
The data clearly demonstrates the influence [of] improved connections and collaborations, locations and spaces
The map is based on the Create Heat Index created with expert input from UTS Business School researchers. The composite index considers two dimensions of innovation: inputs (factors such as the working population and the presence of institutions like universities) and outputs (such as new businesses and patents).
A range of indicators feeds into a measure of innovation performance, in the form of innovative activity per employee.
Researcher Associate Professor Renu Agarwal says the ImagineSydney research powerfully demonstrates the value of collaboration and knowledge sharing when people are more open to conversations, individually and as organisations.
“The data clearly demonstrates the influence improved connections and collaborations, locations and spaces have on the establishment of innovation hotspots,” she says.
Professor Green says people in concentrated geographical areas can connect because of their close physical proximity. “There’s really no substitute for that proximity,” he says.
Traditionally, companies chose to locate in particular areas for real-estate reasons, and for sales and marketing, but with little thought of collaboration, he says.
“This is now changing, but it doesn’t emerge spontaneously – it needs to be enabled and cajoled.”
In the innovation precinct around UTS, for example, the construction of innovation infrastructure such as collaborative working spaces and incubator facilities in recent years had enabled vibrant interconnections.
Universities are playing a bigger role in activating dormant clusters, Professor Green notes.
The Executive Director of the Sydney Business Chamber, Patricia Forsythe, says the economic benefit can be measured in many ways in the precincts where collaborative spaces are being developed, including in new buildings at Barangaroo in the CBD, in spaces in Haymarket and Ultimo, and in the innovation hub at Macquarie Park.
Access the ImagineSydney report here, including case studies prepared by UTS Business School.