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The national innovation review – what next?


We’ve all had time to chew on the Federal Government’s innovation review findings. What will it mean in real terms? For John Kapeleris, the key lies in market-driven implementation.

The government’s green paper, “Venturous Australia”, was released several months ago after a review of hundreds of submissions made by individuals and organisations. Although the paper contains some good recommendations and examines the current situation in Australia, recent global events have already changed the economic landscape. Australia cannot rely on its resources boom to continue to drive future economic prosperity. Innovation is about speed and flexibility to respond to change and now more than ever, leadership is required.

The central role of entrepreneurial firms in the innovation ecosystem cannot be disputed. As the report suggests, we must build and develop Australia’s human capital and talent pool, improve information flows and better integrate the entire innovation system with other global initiatives. Strategically, the government needs to play its role and act quickly to strengthen the supporting infrastructure, particularly research capability, transform and rationalise tax incentives, manage innovation priorities nationally and implement an innovation culture within the public sector itself.

The report recommends that “firms need to acquire, absorb, and apply knowledge from all sources”. However, the detail of how firms will achieve this objective is not specified in the report. The Government has proposed some solutions already, such as the Enterprise Connect Network, and an unspecified “Innovating Enterprises program”. The risk and challenge is to ensure they do not become top-heavy and government-led rather than market-led. The evidence from a number of states that have pursued a similar approach reveals just how hard it is for government business or innovation centres to reach small firms and satisfy the principles outlined in the recommendation.

The recommendation referring to “machine searchable repositories for scientific knowledge” together with the recommendation suggesting that “research funded by governments… should be made freely available over the internet as part of the global public commons” is of considerable concern.

These recommendations are commercially naïve and potentially damaging to Australia’s interests. Australia’s Asian neighbours, such as Malaysia and Taiwan, are currently implementing strategies to capture publicly funded intellectual property (IP) on a national scale so that governmen can assist with commercialisation policies and frameworks to exploit that IP to drive economic outcomes. The Malaysian government, for instance, is establishing a “Technomart” to trade and license IP; not to make it freely available unless it cannot be exploited commercially.

On the basis of global competition and international leading practice, the creative commons approach should be reassessed with serious attention given to the economic opportunities that have already been achieved for Australia through successful commercialisation outcomes.

The recommendation suggesting a Competitive Innovation Grants Program to address the proof-of-concept funding gap is welcome, but the requirement to repay grants seems quite unworkable, as we have seen from the failure of the previous R&D Start Concessional loan program. This approach would have many legal implications. We must once again consider what our Asian neighbours and global competitors are implementing. The proposed Competitive Innovation Grants should address funding gaps that exist across the Australian innovation value network.

The recommendation suggesting that a portfolio of collaboration and linkage programs be maintained to support productive partnerships in the National Innovation System is well supported. The suggested voucher scheme has merit, although evidence from the AIC’s TechFast pilot programs with Australian SMEs suggests that such a transactional approach risks ignoring the substantial investment required before any “transactions” can occur. A voucher scheme could also be used to encourage SMEs to interact with the university and research sector and so align their research to the needs of industry. This approach would be similar to the UK’s Third Stream funding program.

The Australian innovation ecosystem is now looking to the Commonwealth Government to take action and implement its policies and programs to drive the future prosperity of Australia. Otherwise, it will be overshadowed by governments of comparable nations that are building their innovative capacity at a greater rate.

Dr. John Kapeleris is Deputy CEO of the Australian Institute for Commercialisation, which helps businesses, research organisations and governments increase the success rate of commercialising Australian innovation.