Dynamic management training should be offered through the new Industry Growth Program to help raise the global competitiveness of local small businesses, according to the Committee for Economic Development Australia.
The policy proposal is contained in a report on ‘boosting dynamism’, authored by Committee for Economic Development Australia (CEDA) senior economist Melissa Wilson, that encourages the federal government to build “dynamic capabilities within Australian businesses”.
Dynamic management training would help businesses maximise long-run success “in environments that are highly volatile, uncertain, complex and ambiguous”. A survey on dynamic capabilities completed by CEDA last year found that the most dynamic firms had higher productivity and net profits.
CEDA argues dynamic capabilities neatly support the Industry Growth Program’s (IGP)’s aim to scale high-tech manufacturing capability.
The report also argues that dynamic capability workshops and cohort training sessions could both uplift individual businesses and establish a network of senior business leaders that can influence the wider innovation ecosystem.
This could help address a recent finding from Industry Innovation and Science Australia on the ‘barriers to commercialisation and innovation’ that the management experience and skills needed to lead innovative businesses in Australia has atrophied over recent decades, according to the report.
The dynamic capabilities framework focuses on cultivating a firm’s ability to “sense opportunities threats and customer needs”, “seize opportunities to satisfy customers, shape markets and capture value”, and “transform themselves when renewal is needed”.
Equipping business leaders with these skills would likely bolster the whole company as they are “critical for setting firm strategy, structure, and processes”, the report reads.
Adding dynamic capabilities training to the existing advisory services offered under the IGP would “be a low-cost [and quick] way to trial similar training methods to those that have worked overseas”, particularly in Singapore and New Zealand.
It would enable the acquisition of skills “not typically taught in business schools”and which may be too costly for small businesses to access otherwise. CEDA’s survey on dynamic capabilities last year found that while many firms were interested in developing dynamic capabilities they often lacked the time and resources to upskill.
As such, free-to-apply government programs could fill the gap. Of the headline $392.4 million committed to the IGP, $105 million has been set aside for the provision of advice and for other administrative requirements.
Currently, 19 business and technology consultants have been contracted to deliver the advisory services component of the program, most of whom previously delivered similar services under its predecessor, the Entrepreneur’s Programme.
IGP advisers are currently expected to provide advice to support commercialisation or growth projects being undertaken by SMEs.
When delivering the program, CEDA recommends that IGP advisers draw on the design of dynamic capabilities support from schemes in Singapore and New Zealand.
These acknowledge the limitations of the small local market and helps business leaders focus on “expanding into global markets for long-run growth and success”, noting that a focus on efficiency and savings is insufficient.
The CEDA report argues that results from the first three cohorts of Singapore’s Scale-Up SG Program suggest early success.
Of the 49 companies that participated, 57 per cent have entered into a new market, 85 per cent had launched new businesses or products, and 87 per cent had initiated a digital transformation project.
However, CEDA acknowledges that evaluation of dynamic capabilities education is “especially important, given this is an emerging area of research and there is still much to learn”.
