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    The future of innovation in Australia

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    The concept of innovation has received more attention this year than any year in recent memory. We invited Federal Innovation Minister Kim Carr to outline exactly what is at stake and what is required to secure and extend Australia’s prosperity in the 21st Century.
    Innovation is about solving problems. Whether the task is to create a new product or find a better way to live, innovation is the key.
    That’s why one of my first acts as minister was to launch a root-and-branch review of the national innovation system. Swift action was required to reverse years of neglect, and to provide a framework for new initiatives during this parliamentary term and beyond. The review panel was appointed in January and delivered its recommendations to me in July.
    We are all indebted to the review panel – made up of experts from academia, industry and government – and its chairman, Dr Terry Cutler.
    Open consultations held in all capital cities during March attracted more than 1,300 participants. The panel also received over 700 submissions from industry, the education and research sectors, private citizens and government agencies across the nation. All non-confidential submissions have been placed on the review’s website. This level of engagement shows just how seriously Australians take innovation and innovation policy.
    The panel also held nine expert roundtables on topics ranging from tropical innovation to government procurement. Four international advisors brought a global perspective to the review, and panel members consulted widely with their own international networks. Finally, the panel worked closely with the Bracks, Green and Bradley review teams – which are examining the automotive industry, the textiles, clothing and footwear industries, and the higher education system, respectively.
    The review panel shares my conviction that we urgently need to boost Australia’s innovation capacity. It points out that the game has changed and that the old ways will no longer work. The economic and social problems we face are increasingly acute and increasingly global in their implications. The convergence of manufacturing, services and resources has rendered many familiar categories obsolete. Technological advances are creating new opportunities, but also new expectations and competitive pressures – which we can turn to our advantage by becoming a leader rather than a follower in technology.
    The only way to prosper in this fluid environment is though innovation. And when I talk about prosperity, I mean much more than material wealth. We need an innovation system that can generate not just sustainable growth, but well-being; that can increase not just productivity, but happiness. The point is to ensure that Australia remains a place where people can earn a living, have a good life, and make choices about their future.
    To do that we need an innovation system that is open-ended, responsive and capable of internal development – a system that can create new knowledge, push back the scientific frontier, transform industries and strengthen communities. We need to recognise that the innovation process itself is evolving, with incremental improvements in processes and organisation just as important as big technological breakthroughs – especially in the service sector.
    The review panel calls for action to build human capital, research capability, infrastructure, links and the absorptive capacity of firms and institutions.
    As international markets become increasingly cut-throat, our aim should be to make Australian workers more competitive – not by slashing their pay packets, but by lifting their output. You don’t raise productivity with punitive industrial relations laws – the introduction of WorkChoices coincided with a collapse in productivity growth. You raise it by educating your workforce, building infrastructure and streamlining regulation. You raise it by investing in new skills, technologies and processes.
    The panel suggests that our innovation priorities should include making the most of Australia’s natural endowments and other strengths. It argues that we should focus on finding solutions to Australia’s most pressing challenges – especially solutions that may be exportable to the wider world. Priority should also be given to improving and, where necessary, reinventing service delivery.
    As contributors to the review consistently argued, it is critical that we internationalise our innovation system by attracting world-class researchers to Australia, by supporting Australian researchers who collaborate internationally and by participating in large-scale bilateral and multilateral projects.
    It is too early to go into specifics about the government’s response, but our aim will be to achieve a balance between short-term and long-term, between micro and macro; between responsiveness and capacity-building, commercialisation and basic research; between enterprise improvement, sectoral strategies and economy-wide reform; and between local self-sufficiency and global engagement.
    The government will be studying the review panel’s recommendations and listening to the feedback they generate before releasing a policy white paper later this year. That paper is likely to set the agenda for innovation in Australia for at least a decade. It’s that important.

    Senator Kim Carr is the Federal Government’s Minister for Innovation, Industry, Science and Research.