Innovation in Australia is falling, however there is still an opportunity for enterprises to take decisive action and improve business and economic outcomes.

Ricoh, a provider of smart workplace technology, released the findings of its Ricoh 2020 Workplace Innovation Index, which was conducted by StollzNow Research and looks at how Australian organisations are responding to challenges and opportunities of the digital revolution.

According to CEDAs recent report, Australia has dropped one place in a global ranking of the digital competitiveness of 63 nations.

Dropping from 13 to 14, the report highlighted that business agility, tech skills and communications were key weaknesses. Ricoh's report looks closer at challenges and strengths facing Australian businesses when it comes to innovating.

According to the findings, one third of businesses feel innovation should be at the core of the organisation, but budget, staff resistance and cybersecurity concerns create barriers to action.

Furthermore, the research found almost half of Australia's business leaders agree innovation needs to be applied to developing products and services and internal processes.

It highlighted five spending priorities for Australian companies: improving operational effectiveness (46%); reducing costs (44%); upgrading processes and operations (41%); digitising workflow and processes (39%); delivering a better customer experience (37%).

In fact, the skills shortage and lack of resources is another weakness perceived by respondents. More than a quarter (28%) of respondents stated they did not have employees with the right skills to help them address the need to innovate.

Meanwhile, 74% of executive leaders reported they had the necessary resources in place to embrace change. Their colleagues in middle management were less confident, with less than half the cohort (48%) sharing those sentiments.

On top of this, while many decision makers support the idea of introducing more efficient and innovative systems and processes, they're less enthusiastic about the short term results those systems deliver.

Almost two thirds (65%) of respondents felt there was a loss of productivity when new systems and processes were introduced, up from 61% in 2019.

Moving to the opportunities recognised by businesses, the report also looked at the technologies that aid innovation and the power of developing a digital culture.

The index revealed analytics, workflow tools, collaboration and security are viewed as the key technologies that facilitate and support innovation.

Communications technology can facilitate digital collaboration but many organisations are failing to optimise their investment in this technology by introducing collaborative practices in an integrated and systematic way, Ricoh states.

This year's research found almost two thirds (65%) of executive leaders recognised the value of collaboration; however half that number conceded they were not using collaboration tools in the most productive way.

While blockchain and robotics are popular to discuss and imagine, their value as innovation enablers remains uncertain, the research finds.

Developing a digital culture is a key aspect of achieving digital transformation. Ricoh states while a digitised environment can serve as the foundation for a more innovative corporate culture, only 60% of organisations had a program to migrate to one in 2020, up from 56% in 2019.

The research revealed a jump in the number of organisations that were reorganising their processes and procedures to incorporate best of breed digital technology: up from 33% in 2019 to 45% in 2020.

Staff not being aware of digital transformation plans was a common business practice, with 53% of respondents admitting to only sometimes involving staff in the introduction of new workplace technologies, while about a third (34%) said they always did so.

According to Ricoh, leaving employees in the dark was identified as a contributor to the rise of shadow IT, the use of undocumented software introduced by staff without the knowledge of IT decision makers.

Ricoh states failure to communicate the strategic vision of the organisation can result in staff resistance to innovation and transformation initiatives, particularly in the public sector.

Staff resistance was a barrier in almost half (47%) of all government agencies, this year. Conversely, top down leadership and support for digitisation programs can help ensure they're embraced by employees and lead to increased innovation as a result, Ricoh states.

A third of executive leaders agreed change needed to be driven by senior management with a clear vision, if benefits were to be realised across the enterprise.

According to the research, Australian business leaders are aware that the country is now lagging when it comes to innovation, and that there are opportunities to be taken.

In fact, just one in five (22%) felt the country was ahead of other developed nations in the digital work environment, while 28% stated the country was lagging behind.

Despite those figures, over one in five (23%) believe Australia could be ahead in the future. 50% believe the country will maintain its standing and 22% anticipate Australia will fall behind the rest of the world.

Ricoh Australia CEO Andy Berry, says, “Concerted action, not talk, was needed to arrest the slide, and enable Australia to live up to its image as a can do country.

“Australia has always been a nation of innovators but the challenge we face today is a lack of focus on taking our good ideas and developing businesses around them. We need a culture shift.

"All businesses must develop a platform for continued innovation and create more agile paths forward for new products, services and economic cooperation.

Berry says, “Investing in digital infrastructure and culture which help innovation to flourish is the key to making sure the latter scenario does not come to pass. It needs to be enterprise wide and ongoing, not an isolated or exclusive activity or exercise.

“Developing a program to move to a digital culture will have the welcome side effect of introducing more people to what is possible with digital It's time to awaken ideas from all corners of your organisation.