Australia needs to accelerate its rate of creative innovation to maintain current levels of economic growth and development, according to Michael Schrage, co-director of the Sloan School of Management at the Massachusetts Institute of Technology (MIT).

He said Australian management needs to be able to more cleverly leverage its human capital and design sensibilities as well as collaborative capabilities with both customer and supply chain segments.

Schrage was commenting on the importance of innovation prior to leading a one day international master class at the Powerhouse Museum in Sydney on June 26, 2007.

He will be joined by Ralph Kerle, CEO of the Creative Leadership Forum, to talk to business executives about "How to stimulate your organization to innovate."

The master class explores the notion that it is behavior, not insight or knowledge, that drives innovation.

Conventional wisdom suggests ideas or ideation produce innovation. Not so argues Schrage, who says "ideation only produces representations of ideas."

"True innovation is experienced in the serious play between the innovator and their audience: their clients, their suppliers, their markets," he said.

"The development and design of innovative prototypes is vital. And, it's in the design of these innovative prototypes that innovative teams are created, collaboration skills are honed, and a real understanding of innovation with all its inherent challenges is experienced and learnt."

Schrage will explain the process of innovative prototyping and, through action learning, explore the behaviors that enable organizations to minimize innovation risks while creating real financial and economic value. "It is clear to me that for Australia to continue to enjoy the rate of economic growth and development it needs to retain the highest of living standards it needs to accelerate its rate of creative innovation in value-added contexts," he said.

"Australian management needs to be able to more cleverly leverage its human capital and design sensibilities and my work focuses directly on these challenges. My belief is that Australia is either going to transform its value-added innovation culture or it will be exporting more high-end talent and importing people who will compete for a different class of job."

Schrage, who is considered a leader in design and digital innovation, has a client list that includes Google Inc., Microsoft Corp., Merrill Lynch and Mastercard.

He is author of Serious Play: How the World's Best Companies Simulate to Innovate and Shared Minds: The New Technologies of Collaboration.