Last week, the Hon. Ian MacFarlane, Minister for Industry, launched the seventh Global Innovation Index (GII) report, highlighting Australia’s place in the top ten globally for “enabling conditions for innovation”.
Earlier in the same paragraph, the Minister said Australia needs to build on our “areas of competitive strength”. When the report is assessed more closely, it shows Australia’s innovation outputs do not match the innovation inputs by the Minister.
To be blunt, we appear to be wasting our advantageous position.
This is confused message from the Government, as building on our areas of relative competitive strength is practically the antithesis of innovation. Building on our strengths may be comfortable, but it does not grow our economy nor our capabilities as much as developing new areas of competitive strength. It does not boost productivity.
At best, it is a defensive approach and shows little desire to build new value.
At worst, it shows no desire to do so, and our slowing resources-heavy economy could be a curse setting Australia up for a serious case of Dutch disease. New developments and innovations deliver the greatest degree of economic growth, in monetary and employment terms. Simply growing what you already do serves to consolidate established industries.
Innovation builds something new and uniquely useful where there was nothing before. It is this development of new products, processes and intellectual property, and then finding additional, non-envisioned applications for these, which delivers the highest value. By way of crude illustration, among most impressive innovations of the relatively recent past include steam engines, the production line, microchips, and the internet. These all had original uses, but were to be applied more widely, generating new industries, improving established ones, and causing the decline of some others.
All these innovations have been refined over time, but the original idea is what was truly innovative and built real value throughout so many supply chains. To build new value in the economy, develop new industries and capitalise on our already strong position, we need to be working on the breakthroughs and creative implementation, not just consolidating a good position vis-à-vis the rest of the world.
This is not a race in which we are about to win a medal if we hold our spot, it is a perpetual contest where those at the front get the best rewards, provided they hold their position long-term. What and why exactly the Minister was cheering, I am not sure. The GII report shows Australia to have exceptional infrastructure for supporting innovation, and PwC’s 2013 The Startup Economy report showed Australia had favourable conditions for entrepreneurs and entrepreneurial activity.
This combination, in theory, should auger well for creating knowledge, commercialising knowledge, using knowledge to create value, and using that value to reinvest in knowledge creation. Development and innovation are symbiotic and mutually reinforcing, so to settle for consolidation would be to slip in the contest. It should be concerning that we are not taking more advantage of the solid enabling infrastructure we already have.
There is no doubt Australia is innovative and has the capacity and ability to produce truly innovative thinking and products, particularly in biomedical research and through the CSIRO. We are told regularly about Cochlear implants and Wi-Fi being Australian innovations, but the continued references convey a warped notion that as if having done these things in the past there is no need to continue to do more now and in the future. Again, the report shows we are wasting our innovation infrastructure.
Yet, there seems to be little desire within government for expanding the areas in which Australia is a leader. There is a difference between having the right conditions for innovation and actually being innovative. The Minister’s statement indicates a desire to consolidate, which will only serve to squander the good conditions for innovation we currently have.
The Government has been remarkable quiet about how to nurture innovation, perhaps because it has a poor understanding of what it actually is and the true value of creating something new and uniquely useful. This is concerning, as knowledge development, innovation and economic growth are interconnected. The identification and solving of high-value problems is essential to economic growth, development, innovation and improving people’s lives.
A government focused on consolidation when it has an advantage is a government avoiding the reality of how rapidly changes are occurring in the world, or possibly out of touch with how to support an economy to capitalise on these changes. For all the efforts of the Government to be open for business, and for all the rhetoric about supporting business, it there is still little sign form Canberra that it understands the role of innovation in supporting business and academia (outside biomedical research).
Policy levers are powerful tools, and they can be used to send clear, effective signals to support the creation of new value. Policy silence, or as we are seeing currently, legislative overhauls and agency amalgamation with no clear replacement only serves to build uncertainty, and is certainly not an effective way to stimulate innovation, increase productivity and create new value.
Dominic Collins is a public affairs professional, specialising in stakeholder engagement, position development, communications and public policy. He is a consultant at edgelabs, and is currently being an intern for a 12 year old, socially-minded entrepreneur.