Can innovation capture the imagination of a nation?

While much was made about the importance of innovation during the Federal Election campaign, it was hardly a barbecue stopper and probably never will be. The Federal Government’s science and innovation agenda was broadly welcomed but it is not widely understood. Distilling some of the complexity inherent in the debate through the ‘Ideas Boom’ mantra had merit, but much more needs to be done to make…

While much was made about the importance of innovation during the Federal Election campaign, it was hardly a barbecue stopper and probably never will be. The Federal Government’s science and innovation agenda was broadly welcomed but it is not widely understood. Distilling some of the complexity inherent in the debate through the ‘Ideas Boom’ mantra had merit, but much more needs to be done to make innovation intelligible to more Australians. Meanwhile the challenge of modernising Australia’s underdeveloped innovation system requires a Herculean effort backed by substantial investment into translating ideas into sophisticated goods and services. We have our strengths. There is no shortage of ideas. Australia preforms strongly in research, accounting for nearly four percent of global research – ninth in OECD – with only 0.3 percent of the world’s population. But we rate very poorly on translation and application of research into economic and commercial outcomes. Against international benchmarks, Australian industry is rated as having low “capacity for innovation” (World Economic Forum); there is low coproduction of research with industry; there is a poor “state of cluster development” and low “value chain breadth” (OECD); finally, there is low investment in “intangibles”, (as distinct from physical capital). Intangibles investment covers organisational and human capital, R&D and investment in ICT – many of the things, in short, that enable a company to absorb and embed innovation. Great economic gains are to be made by accelerating and widening the diffusion of new technologies and business models, linked to opportunities in global value chains. Given the current chasm between origination and translation, we could lift our share of global research dramatically and have almost no impact on our economic and industry performance. Radical policy changes are needed to avoid this. Australia lacks a sophisticated innovation ecosystem and an understanding of the contribution this can make to supporting industrial diversification and high skill jobs growth. From Western Europe a broader approach is observable. It emphasises the demand-side drivers from addressing societal challenges that are shaping demand for new products and services, such as environmental sustainability and population health and ageing. The focus is not on startups and small companies alone, but also on complex value chains and lead customer relationships linking large, medium and small firms, and transforming existing businesses. It stresses the full range of key enabling technologies (like photonics, nano-technology), not only digital ones, and their broad and rapid diffusion, not just origination or invention. It also emphasises innovation in business models and firm organisation alongside the new technology platforms. This more integrated approach is one we must do more than emulate. We must learn from this experience but not slavishly apply it. The truth is that the networks, collaborations and institutions that are vital to sustaining successful innovation and industrial transformation in advanced industrial nations like Germany, Finland, Sweden and Denmark are seriously underdeveloped in Australia. With this comes a deficiency of innovation leadership and a failure to harness demand side drivers, with a too-frequent emphasis on technological innovation and supply side policies at the expense of non-technological forms of innovation. Fortunately the notion of an ‘Ideas Boom’ at the heart of the present science and innovation agenda in Australia focusses much greater attention on the importance of knowledge and technologically intensive economic development. It warns against overreliance on mineral exports and advocates much greater dependence on transformation and innovation as drivers of sustainable growth over the medium term. But all of this must change to higher education funding arrangements. The culture and operation of our higher education institutions is necessary to help realise a more ambitious innovation agenda in Australia. Researchers need to be rewarded not only for the rigour and quality of their publications but also for the rigour and quality of their engagement with industry and government. Metrics to capture the value of engagement have been under discussion for years. We may be able to agree on what some of these might be, but standard approaches to quantifying outputs will need to be put to one side if we are to make genuine progress on broadening and deepening engagement between our universities and industry. Engagement needs to be included as a third mission alongside teaching and research in Australian universities. It then needs to be actively rewarded to foster it and sustain it. Reforming the research funding system in Australia to better reward the outcomes that come from engaged research would create an environment where universities’ relationship with industry and government is transformed. We also need new institutional environments for researchers, industry and government to work more collaboratively in – such as Tonsley, the former site of the Mitsubishi, and the South Australian Health and Medical Research Institute on North Terrace. These are great sites where academic boundaries are being broken down and hard questions are being asked about how we extract greater social and economic value from our academic institutions. John Spoehr is Professor and Director of the Australian Industrial Transformation Institute at Flinders University in South Australia @JohnSpoehr

Adelaide In-depth

Get the latest stories, insights and exclusive giveaways delivered straight to your inbox every week.