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Australia ranks high on innovation but low on the environment, says OECD report


Australia’s bid to foster innovation and measure its progress is a laudable one. Its candour even more so, because rare is the government that shines a light on its darker areas.

The Australian Innovation System Report – the second since the nation officially hitched its bandwagon to the one thing that is most likely to make a difference in how we live – is short on data, especially latest international numbers to compare progress. But what it lacks in numbers, it makes up with honesty on at least two critical areas of shortfall.

“We have a poorer tendency to collaborate and a greater tendency to modify existing innovations over creating our own new innovations,” the report, unhesitatingly, concludes. It also cites particularly poor progress in environmental performance vis-à-vis the rest of the developed world.

Australia 12th in competitiveness among OECD countries

Overall, Australia fares well in innovation, and on social and economic prosperity indicators, when compared with 33 other countries of the OECD, or Organisation for Cooperation and Development.  It ranks 12th in global competitiveness within the OECD. But on environmental parameters, Australia “ranks near the bottom” among developed countries.

“We are not doing as well on environmental indicators such as water use and greenhouse gas emissions, suggesting a need to focus on how well this is addressed in the innovation system,” the report says, adding that the nation had recently begun to focus on such issues as environmental pricing of greenhouse gases and water, and to drive business innovation and renewal.

Nevertheless, Australia drew heart from its “moderate to good ranking in innovation” that “has helped create a competitive economy and inclusive society.” It also will set the stage for a “fairer, richer, healthier and greener future,” the report assures.

“Innovation will make Australia more productive and competitive, and may answer the great challenges of our time such as our changing climate, national security, hunger and disease,” Innovation Minister Senator Kim Carr said.

“The analysis shows Australia has a strong capacity to innovate. This report shows that our performance in the area of research and skills has been above OECD average and our performance in entrepreneurship is one of the best in the world,” he added.

The report also highlighted some challenges that the government says it is committed to address with a record $9.4 billion investment in innovation, science and research for 2011-12.

  • The 40% drop in early-stage venture capital investment caused by the 2008 global financial crisis. This calls for increased government funding of entrepreneurial ventures.
  • Lack of skilled people, a key driver of innovation activity. The government says data suggest more investments in vocational education and training can counter this shortage. It is mum on immigration as a way to ease skilled labour.
  • Declining level of collaboration among publicly-funded research agencies. This situation has come about as collaboration between business and researchers has grown.

Read the report here.