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Technical skills are not enough for sustained innovation

Updated: Apr 4

30 November 2022

Technology-oriented businesses, be they startups, high-growth, or mature, require a mix of skills to succeed and prosper. Moreover, the required skills mix will evolve and change at various stages of business evolution.

Skills are often grouped into several broad categories: hard skills, business skills, soft skills, creative and design skills, and management skills.

Hard skills, or technology skills, are regarded as the base from which a business starts and operates. They involve the application of scientific knowledge to create products and services. There is an established historical link between advances in science and technology and economic progress.

Current policy attention has been focused on the shortage of hard skills – in engineering, information and digital technologies, and in new and emerging high technology areas. These are encompassed by the shorthand reference to STEM (science, technology, engineering, and mathematics).

But addressing the skills shortages in STEM alone may not yield the much sought-after productivity and growth outcomes.

More policy attention is required to develop the skills for innovation – to carry technological capabilities through to creating commercial, economic, and social value.

There is a chorus calling for a greater commitment to knowledge transfer and research commercialisation, but the skills required to achieve this are also in short supply.

Innovation requires people with broad knowledge and capabilities that draw on the humanities, arts, and social sciences (HASS). These capabilities contribute in very important ways to the other elements of the skills mix.

Soft skills combine interpersonal relationships, communication, character traits, attitudes and behaviours, and many other social skills.

They cover the capacity to create social capital – building networks, relationships, connections, teams, and coalitions – and trust in organisations and the broader innovation system.

Soft skills are developed from understandings drawn from the social sciences and humanities, particularly disciplines that develop cognitive and critical abilities and understandings of human and organisational behaviour.

Creative and design skills reflect a willingness to experiment and to engage in associational or integrative thinking. These skills encompass ingenuity, resourcefulness, and a willingness to use initiative.

Business skills are mostly associated with knowing where and how to start, grow and sustain a business. Skilled businesspeople know how to assess an invention or discovery’s current and potential value to customers, suppliers, and distributors along the value chain.


Entrepreneurial skills are specific business skills that involve identifying potential business opportunities by seeing gaps in a market or identifying new or different ways of meeting existing market needs.

Entrepreneurs envision products, secure resources (capabilities), arrange assembly from multiple sources, create brands (image), design packaging and presentation (aesthetics), establish sales and distribution channels, and develop strategies to exploit the opportunity profitably through market positioning (advertising).

Entrepreneurial skills are not confined to new businesses or startups. They are required in all businesses, irrespective of size.

Business opportunities are not always driven by new technology availability. But technology often enables capturing opportunities and solving a pressing business problem. Technology development can be “pulled through” by market opportunities.

Business skills are sourced largely from courses and programs in the social sciences and humanities, particularly in management, commerce, and commercial law. Without them, production-oriented businesses – new or old – are more likely to fail.

Management skills are required to run organisations efficiently and effectively. They relate to setting objectives, organising activities and people, motivating, creating monitoring and performance measurement systems, and ensuring ongoing people development.

Australia’s understanding of management as a capability and a resource is far less sophisticated than it is in the US, the UK and Europe.

This may reflect our economic history, our commodity culture, and the low level of complexity in industrial outputs.

In the US, management has long been regarded as the visible hand that guides organisations to commercial success.

Management skills are developed through experience. People educated in engineering, marketing, finance, and law have become successful managers.

Managers draw on a wide range of popular and scholarly management thinking to hone their skills. Teaching and research in management can help sharpen those skills

Taking a broader policy view

Innovation involves a broad suite of knowledge, skills, and capabilities drawn from various academic disciplines, including but not limited to science and technology.

Skills drawn from the social sciences, arts and humanities are called upon to address many of the tasks required for business success and sustainability – including financial management, market research, communication and public relations, human resources management, protection of intellectual property, enforcement of contracts, and regulatory and statutory compliance.

A great deal of policy attention is being given to building and celebrating skills in the STEM area. This is to be commended. But much less attention is being given to skill requirements that will support, sustain, and grow innovative businesses.

Innovation policy should reflect the importance of the skills mix and the contribution of the humanities, arts and social sciences to innovation and business development.

As businesses grow and develop and disciplinary fields deepen, businesses require access to a very broad mix of skills.

Policy should encourage people to acquire capabilities across the skills spectrum. One skill set should not be seen as superior to any others. This includes continuing support for teaching and research in the humanities, arts, and social sciences.

But while the case for investment is STEM is well articulated, advocacy for HASS tends to be fragmented and disorganised.

Originally published in InnovationAus, 30 November 2022

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1 Comment

Excellent article ... the focus has been on STEM, at the expense of the other necessary skills.

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