Australia's CFOs haven't really embraced the idea of innovation

Mark Kolbe/Getty Images

The finance heads of some of Australia’s biggest companies admit their businesses haven’t been paying much attention to innovation.

About 40% of CFOs say their company hasn’t brought a new product or service to market in three years, according to the 2016 American Express CFO Future-Proofing Survey.

And more than half those who haven’t launched a product for three years say they don’t intend to do so in 2016.

The majority of CFOs surveyed say their company’s approach to innovation is mostly ad hoc, rather than strategically planned.

The survey examines the views of 250 CFOs from Australian companies with revenues of between $2 million and $300 million.

It comes at a time when the federal government has announced the National Innovation and Science Agenda to encourage sustainable growth of Australian industries.

About 70% of mid-sized businesses intend to invest less than $100,000 in innovation in the next year.

Based on a business with an annual turnover of $50 million, that’s only 0.2%. Compare that to the average 7% spent on research and development by the world’s top ten most innovative companies.

Part of the problem, according to the research, is the high number of mid-sized businesses which don’t have a formal business strategy or game plan (23%) or only have one for the short to medium term (37%).

Half of those with no plan anticipate zero growth for the year ahead.

The 40% with a comprehensive, long-term game plan, are most likely to predict double digit growth and are more likely to prioritise innovation.

“It’s no longer adequate for Australian mid-sized businesses to have a short term view,” says Martin Seward, American Express vice president global commercial payments.

“It’s clear that those with a long-term strategy are delivering game-changing growth and effectively evolving to withstand aggressive competition in cluttered markets. They are the ones that will survive and thrive.”

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.