Podcast transcript
Innovation in sport
Assoc Professor Vanessa Ratten
Audio
You can also listen to the interview [MP3 16.7MB].
iTunes
Visit this channel at La Trobe on iTunesU.
Transcript
- Russell Hoye
Welcome to Sport Unpacked, a regular podcast that explores issues in sport and the views of researchers at La Trobe University. I'm Professor Russell Hoye, Director of La Trobe Sport, your host, and my guest today is Associate Professor Vanessa Ratten from the Department of Management here at La Trobe. Our topic today is innovation and entrepreneurship in sport, seeking to understand what these terms mean in relation to sport and how companies do it well. Welcome Vanessa.
- Vanessa Ratten Hi Russ, it’s great to be here.
- Russell Hoye
Sport is a global product and service industry around the world. How important is sport to the global economy? And how is entrepreneurship engrained in many sports, businesses, organisations, athletes’ teams and sponsors?
- Vanessa Ratten
Sport is one of the top ten industries worldwide and it also contributes to a lot of other industries, for example, education, health, fashion, clothing, so it’s a really important part of the global economy and a lot of people know about sport, so that transfers across international boundaries. And in terms of entrepreneurship, sport is very entrepreneurial in terms of its innovation, risk-taking, pro-activity and competitive aggressiveness so it really ... a lot of the sport played around the world is very entrepreneurial because it really goes ahead of the market and impacts a lot of other industries, in the worldwide marketplace.
- Russell Hoye
And we certainly see that, the impact of the sport industry around the time of the Super Bowl, with the great new product commercials coming out. Everyone wants to see the top ten commercials during the half time break etc. Is that one really big example about how sport is a global industry?
- Vanessa Ratten
Yeah, the Super Bowl is a great example and it’s watched around the world. A lot of people in Australia watch it. It’s got a live telecast and the marketing innovations are a great example, a lot of companies try out their ideas, they bring in new people, like actors and athletes, so it’s very entrepreneurial in terms of its marketing innovations and that’s a great example of NFL.
- Russell Hoye
And sport at an elite or commercial level is quite well known for being innovative, and we have new sports like triathlon and new adventure sports evolving all the time. What drives that innovation in sport?
- Vanessa Ratten
In terms of innovation, I think it’s the new technologies that are coming through, so for example, in tennis, it’s new types of equipment, the faster pace that tennis equipment can be played, so it’s the equipment in terms of the products, but it’s also the innovations that are occurring within the services, so how it’s broadcast, how it’s televised and examples of that are like the interactive play that’s coming through, so with people’s mobile communications, they can watch on the iPad, they can watch on different players’ viewpoints, so a lot of the innovation there is occurring in terms of consumer segment, how people want to see the sport being played, and also what companies can do to interact with their customer base.
- Russell Hoye
Now golf is probably one of the sports where it’s quite a unique sport where there’s lots of innovation from technology companies, in terms of club head development and ball technology extending how long and how accurate players can hit a ball, and that’s obviously forcing golf clubs to re-design their golf courses. Is that an example where innovation is really positive for sport? Or it’s somehow negative and positive?
- Vanessa Ratten
I think it’s a really interesting point because you can look at golf and people are able to hit the ball faster because of the technology and then you can compare it to baseball. With baseball, they still have wooden bats and they’re not allowed to use new technology, because if they use the new technology, then they’d supersede the previous records. So I think it’s really interesting. In golf they can hit the ball faster but are they necessarily doing it better is the question. Sometimes that technology can be really good but at the same time to evaluate the athlete’s performance, it’s interesting to look at golf, but then to compare it to like, baseball, where they still have wooden bats and they’re not allowed to use a new type of technology because they’d just, you know, hit the ball out of the stadium all the time. So they’ve, in baseball, they’ve kept that old technology so they can compare it to people like Babe Ruth and previous record-holders. So it’s interesting to get that balance with that new technology.
- Russell Hoye
And we certainly see in a sport like swimming, with FINA coming out and banning the fantastic technology in the swimsuits to actually enhance swimmers’ speed, and we’ve seen them dial back the level technology allowed in that sport. So do you think sports are well equipped to handle the innovation that’s coming from outside the governing body of sport that’s coming from product developers and suppliers?
- Vanessa Ratten
No, I think some of the innovation’s just happening so fast so it’s really hard to govern. It’s kind of like the internet. The rules and regulations are made after the innovation, so I think with the swimming, the swimsuits, it’s so retro-active, like reactive strategy so it’s really ... I think it’s hard for a lot of sports teams and players to foresee the changes that are happening and how they’ll impact the performance.
- Russell Hoye
And what about entrepreneurs? It sort of suggests that entrepreneurs are a central sort of key driver of innovation. Are they key to this entrepreneurial process that is happening in sport?
- Vanessa Ratten
I think that entrepreneurs really drive the competitiveness. They’re also trying to increase their economic efficiencies within sport, so they maximise profitability but at the same time be really pro-active about in terms of player payments, how much they get paid, how much the teams get subsidised by the sporting organisations, but also as part of the ... providing a healthier economy, the entrepreneur’s a really key part of the job creation and also the new wealth within the sporting sector. So it’s really important. They really provide a role of habitually creating and innovating within sport by making sure it keeps up to date with the technology, with what people are wanting within society.
- Russell Hoye
And you mentioned at the start of the interview about the various entrepreneurial elements of sport such as pro-activity or risk-taking. Can you explain what those things are and how they play out through maybe an example?
- Vanessa Ratten
In terms of pro-activity, within sport, teams, athletes, sporting organisations, the government, really needs to think about what’s going to happen in the future, what kind of changes are going to occur, and part of that is like managing the teams, managing athletes, bringing together issues like sustainability, so being pro-active about different environmental trends, and also thinking about new business opportunities that might evolve, for example, with pro-activity within the Australia Baseball League, they have been very pro-active in terms of trying to set up the equivalent of the American Baseball League in Australia, so they have been playing, been starting with that and also bringing in international teams, so they’ve been pro-active in trying to, for example, within soccer, bringing famous soccer stars to Australia, bringing international teams to Australia, to try and build the team base and that’s been successful in terms of sports like soccer. And the other element, risk-taking, is really important in terms of sport because of really trying to look at future potential, so a lot of teams have looked at future potential of athletes’ performance, and tried to lock them into five year or ten year contracts, so they’ve been risk-taking that way and they tried to do that because they can see the potential in the athletes. An example of that in terms of risk-taking is the AFL franchise, so setting up Greater Western Sydney and the Gold Coast teams has been in a way risk-taking, but it’s been also pro-active in seeing the future growth potentials of those regional economies. So they’re really an important part of the entrepreneurial process and you know, sport does that in a number of ways through teams and athletes and the sporting organisations involved.
- Russell Hoye
So it seems like behind all this entrepreneurship there’s quite a complex business process that must happen, not just drawing on a good creative idea. Can you explain some of the different types of entrepreneurship within the broad sort of sports industry?
- Vanessa Ratten
There’s a lot of different types. One major type is social, or community-based entrepreneurship, so with social entrepreneurship, it’s sport being involved both in a not-for-profit way but also in a profit way, so they’re trying to combine the ... you know, like in terms of building the AFL Auskick programs. So that’s like developing the AFL so more people watch it, but at the same time encouraging people who might not have been interested in the sport to be involved in the community. Another example of social entrepreneurship is the NBA We-Care campaign. So that’s really an example of trying to get the athletes, the basketball players involved in local community activities and helping out the community, particularly in disadvantaged areas. Other examples are technology entrepreneurship, so technology entrepreneurship really involves different kind of innovations, like fantasy sport. So fantasy sport, utilising the internet, mobile technology, to build fantasy teams, and that has led to other kind of innovations, like for example, sports betting, and the sports betting websites. Another example, particularly within entrepreneurship, is corporate entrepreneurship, that is similar to technology but focuses more on the larger organisations. So for example, some of the corporate entrepreneurship has led to better clothing or better kind of garments being used to increase player performance, but it’s also involved in your television broadcasting licences, and also offering different ways that the game, different sporting games are played. So for example with cricket, night time cricket, shorter cricket games, you know that has been part of the entrepreneurship, trying to appeal to a different audience, that might want to watch shorter games, and in the fast pace, people’s time is more precious now, so they’ve done that as part of entrepreneurial corporate entrepreneurship. Other examples are like in ethnic entrepreneurship, so ethnic entrepreneurship, an example of that is, you know, the increase of soccer in Australia, so previously, twenty years ago, it was mostly ethnic minorities that were playing soccer and now it’s gone more mainstream, so it’s evolved as a sport. Other types of entrepreneurship are like, institutional entrepreneurship. So the big institutions like the International Olympic Committee, how they’ve incorporated new sports like windsurfing, into the Olympics and they’ve tried to do that in order to increase a wider audience around the world.
- Russell Hoye
You’ve been involved in studying product innovation and one particular example I know you’ve done some work on, is with UnderArmour, the garments that assist in recovery and performance. Could you explain the innovation and entrepreneurship that happened around the development of that particular product?
- Vanessa Ratten
UnderArmour predominantly makes clothing, particularly for football players, and high performance athletes, so UnderArmour was initially developed at the University of Maryland, and it was by a student athlete, and he was on the football team and found that, there wasn’t any clothing that provided sweat resistance, so the existing companies in the market, like Reebok and Nike weren’t making the type of clothing that he wanted to play in. So as a football player, he became a sports entrepreneur because he developed the clothing, and he developed clothing that was sweat resistant, also very light, and that was much easier for him to play in, and as part of that development, UnderArmour has increased the types of products they made, so they’re making compression garments, and part of that has also been that strategic and entrepreneurial brand vision, so UnderArmour has predominantly marketed to college sports and now has internationalised, but it’s the predominant sponsor of the NFL and it’s really kind of focused on providing really innovative cutting-edge clothing for sports athletes, you know that didn’t previously exist in the marketplace.
- Russell Hoye
That’s a really good example about how a product has become quite international, very quickly, over say, a ten year period. Has sport in general become much more international in its ability for its global reach and its awareness amongst the global population about what sport is and how it is innovative?
- Vanessa Ratten
I think so, particularly with the increasing technology, like the internet, people are able to access sport a lot more easily than they could in the past, so for example, college football in the US is now broadcast in Australian homes, and because of the technology particularly with the internet or YouTube, you know, people have been able to access sport but also the athletes within many sporting clubs have internationalised, so for example, the NBA has one of the highest numbers of international players from around the world and you know, players from China, players from Spain, have become very popular in the US, and that’s also increased their internationalisation, because it’s linked them in to the home market.
- Russell Hoye
And it seems that sport is sort of an industry where it’s subject to its own push to be innovative itself as a sport to grow its own products and its market awareness and its use of technology, but it’s also subject to entrepreneurs and suppliers developing new things which sport could use or be affected by. Do you think sports have that ability to react well to outside influences, in terms of the innovation that’s being pushed on them?
- Vanessa Ratten
I think sport probably does it better than other industries because they’re naturally competitive, so many of the sporting teams and athletes and individuals are naturally competitive so I think they’ve done it better because they’ve got the money and the resources behind them to incorporate some of those innovations before other types of industries or companies takes them on board. So I think they’ve done that very well.
- Russell Hoye
And obviously doing research around entrepreneurship and innovation can be quite difficult I would imagine because of some of the people who are doing those innovative things are unwilling to perhaps share what they are doing. Could you explain some of the challenges you’ve had in doing research around sport innovation and entrepreneurship?
- Vanessa Ratten
I think some of the challenges is looking at the really kind of early stage in the development, so before it becomes commercialised, some of the challenge is to find out what is actually happening before it gets in the media, before it gets on television. The challenge is to really kind of see what’s happening at the moment and to get insights into what people are doing and what kind of business opportunities, what they’re developing, to get a foothold within the sporting teams I think is a challenge.
- Russell Hoye
And how do you go about finding out the examples where you want to go and study that early stage? What’s your market intelligence you seek to actually find those things out?
- Vanessa Ratten
I think it’s just reading widely and also on watching TV. Sometimes you might just hear a snippet and then want to explore more within that company or what that athlete is doing or how they’re progressing in their career. So sometimes it might just be something they say or a small byline in an article that might kind of ... to try and find more about that development.
- Russell Hoye
Okay. Doing research in this space, you’re obviously right, I hate to use the phrase, but at the cutting edge really of what sports are doing. What sort of impacts do you think your research might have on sport organisations and the companies that service sport?
- Vanessa Ratten
I think the impact is to collaborate more with academic institutions and sports practitioners, so that there’s a collaboration between both, so that companies within the sports sector and athletes can see the benefits of research and development and the knowledge existing within academia, and they can collaborate. So hopefully the impact will be that there’s more sports practitioners and also academic involvement, so there’s a collaboration in terms of team performance, looking at international strategies and some of the research I've done actually is ingrained within the companies.
- Russell Hoye
Thank you Vanessa. That’s it for today. My thanks to Vanessa Ratten from the Department of Management here at La Trobe University. Thanks also to Matt Smith from the digital media team for his stellar production. You can follow me on Twitter @russhoye. You can find a copy of this podcast on the La Trobe University website under the news tab and also at www.latrobe.edu.au/cssi.
Focused, Ambitious and Transformative ideas - 
