Another year may be drawing to a close, but the pandemic is showing no sign of doing the same. So what lessons about innovation can we glean from 2021? Whether they’re from Austrade,  CSIRO  or the Treasurer Josh Frydenberg himself , the forecasts indicate that the Australian economy is poised to come roaring back next year. How can innovators make the most of the predicted recovery or respond if Omicron or another variant blows the economy off course? We look at the seven ways 2021 has schooled us on innovation to help you navigate whatever 2022 has in store.
1. Digitalisation dominates
When COVID-19 arrived in 2020, and we took cover from the virus, the pandemic saw the world embrace digitalisation in a few short weeks. The trend towards digitalisation has continued to accelerate through 2021 and is now a megatrend. According to market analysts Gartner, this year, Australia’s spending on IT is the highest in a decade. And it is predicted to grow 6.5% in 2022, due to a newfound willingness of businesses and their teams to adopt digital technology. The forecast places Australia ahead of global trends when it comes to digital spend.  By looking for new opportunities to use technology, your business can enhance efficiency and save costs helping you keep pace with or edge ahead of your competitors in 2022.
2. Prioritise cyber security
Cyber security is essential if you want to keep your business safe and secure online. Part of the fallout from 2020’s seismic shift to digital was a surge in cyberattacks, and many businesses found their protection wanting. During the 2020-21 financial year, the Australian Cyber Security Centre recorded more than 67,500 cybercrimes — up 13% on the previous period and equivalent to an attack every 8 minutes. In total, Australian businesses fell prey to over 500 ransomware crimes, with many companies becoming casualties of a crimewave designed to compromise business emails. Health care, food distribution, energy and other essential services were some of the most heavily besieged sectors. While a cyber breach can happen to any business, those with R&D have intellectual property worth stealing. If you haven’t already done so, review your company’s cyber defences, and if possible, fix any chinks in your armour before the new year begins.
3. The certainty of uncertainty
We’ve nearly cycled through twelve tumultuous months and the second year of a pandemic that upended the world as we knew it. 2021 began with the promise of a vaccine-led recovery. Then less than six months into the year, the Delta strain emerged and promptly arrived in Australia, triggering sustained lockdowns for the eastern states. As Australia’s vaccination rate approaches 75% of the total population, the as yet unknown threat from Omicron is casting a shadow over the country’s plans to reopen.  For innovation businesses, the key takeaway is that there is certainty in uncertainty. With no finish line in sight, the pandemic could either fizzle and disappear into the crowd or be with us for months or years. Combat the unpredictability by focusing on your R&D and nurturing an innovative culture among your team members. This way, you can move quickly to capitalise on post-pandemic economic growth or pivot to meet new issues the pandemic could bring. Extra challenges are tough but create fertile ground for idea generation and successful innovation.
4. The Great Resignation looms large
The Great Resignation has been reported around the world, and now experts are warning Australian businesses to brace for its arrival. So what’s behind the phenomenon, why is it important, and how can you protect your business? Working from home (WFH) offers zero commutes, Zoom meetings in your slippers and unparalleled flexibility. But its leading downside is the blurry boundary between work and home life. Many workers have been feeling the strain day-to-day, leading to burnout. Many businesses are struggling to build and sustain teams of staff who have never met or worked together face-to-face. All this is leading employees to re-examine what’s important to them, with many looking to find new roles that offer meaning. Start-ups and businesses with R&D often have highly skilled and hard to replace specialists on their teams. So what can you do to stop your best people from walking out the door? Start by revisiting what matters to your team. According to SmartCompany, many workers are now placing a higher value on health and safety and want to keep some of their flexible work arrangements as they emerge from lockdown. Remember, the culture you create in your business has an outsized impact on your team’s morale and how likely they are to stick around. So make a point of talking about the company’s vision, mission, values and business goals with all employees regularly. This will help them find the meaning they’re seeking from work and pull cohesively in the direction you want to take the business.
5. Supply chains are strained
Peaks and troughs in the demand and supply of goods have wreaked havoc with international supply chains this year. Now, China is bracing for a winter surge in COVID-19 cases fuelled by new variants. Shortages and the rising cost of diesel and petrol are hitting the global economy. This combination is creating a perfect storm for more supply chain chaos. Australia has already seen fuel prices skyrocket. But the spectre of factory shutdowns in China and ballooning shipping costs could be bad news in 2022 for R&D programs or innovative products that rely on imported components. If you haven’t already done so, try to build up a contingency stock of the items you require. If that’s not possible, look for an alternative, preferably homegrown suppliers, to reduce your company’s supply chain vulnerabilities. Channel your inner scrouge and look for ways to use less fuel and energy and make the stock you have last longer. Consider applying for government funding in the form of the Certain Inputs to Manufacturing (CIM) grant. While the CIM will not solve your immediate supply chain issues, it could ease the financial burden if your business is eligible.
6. Innovation makes sense
Recent research from CSIRO confirms what you and the wider innovation community have always known; innovation creates solutions and wealth that benefits everyone. CSIRO’s latest working paper, Quantifying Australia’s returns to innovation found that every dollar spent on R&D returns at least $3.50 to the Australian economy. Although it can be sorely tempting to cut back on R&D when times get tough, remember it’s today’s innovation that will generate tomorrow’s revenue and profits. So if your business needs to cut costs in the coming months, try to ringfence your R&D budget and pare back on administration, travel or accommodation costs first. Remember, the R&D Tax Incentive (R&DTI) is there to support every R&D dollar you spend. And if you bring your tax refund forward regularly with Radium Advances, it triggers additional refunds that make your R&D budget go further.
7. Broader horizons for capital
Having different sources of capital helps your business balance financial risks and enjoy smoother cash flow. In turn, this enables your R&D to move forward without pausing. Innovators that could draw on debt finance, equity finance, government grants and good old fashion bootstrapping were more resilient and better able to continue their R&D throughout the COVID-19 crisis. A silver lining of the pandemic is that alternative finance such as peer-to-peer lending and R&D Advances went mainstream as more and more businesses added these sources of capital to their financial mix. With the end of the pandemic nowhere in sight, canny businesses with R&D will benefit from pursuing a diverse capital stack throughout 2022 and beyond. Radium Advances are R&D loans that let you access your own money, in the form of your R&D tax refund, early. If your business is eligible to apply for the Federal Government’s R&D tax incentive, you can apply for a Radium Advance. It’s as simple as that. We approve Radium Advances within two business days and send funds to your bank account three days after we receive your signed loan agreement.* There are no upfront repayments or fees, and the cost of your Radium Advance is more than covered by your tax refund when it arrives. So if you’re looking for finance that is certain in these uncertain times, call us on 1800 723 486 or request a call back with one of our R&D experts today.
*Radium Advances can be approved within two business days if all application documentation is received and correct. Radium Capital is a specialist R&D financier. In assessing your eligibility and preparing your R&DTI claim, we recommend you seek the advice of an R&D consultant.
 Austrade (2021) Why Australia Benchmark Report 2021 [online] available at: https://www.austrade.gov.au/benchmark-report/home
 CSIRO Futures (2020) COVID-19: Recovery and resilience, CSIRO, Canberra, [online] available to download at: https://www.csiro.au/-/media/Do-Business/Files/Futures/COVID-19-Recovery-Resilience-Report.pdf
 Reuters (5 Dec 2021) Australia to raise its 2022 economic growth forecast – treasurer [online] available at: https://au.finance.yahoo.com/news/australia-raise-2022-economic-growth-013733808.html
 Gartner (2021) Gartner Forecasts IT Spending in Australia to grow 6.5% in 2022. [online} available at: https://www.gartner.com/en/newsroom/press-releases/2021-10-26-gartner-forecasts-it-spending-in-australia-to-grow-6-
 Our World in Data (Dec 2021): Coronavirus (COVID-19) Vaccinations, Share of people vaccinated against COVID-19, Dec 4, 2021 [online] available at: https://ourworldindata.org/covid-vaccinations?country=AUS