By Dr. Anand Kulkarni
[su_pullquote]Australia announced its Innovation Policy last month as “Welcome to the Ideas Boom” (Australian Government 2015). With the Opposition party releasing its innovation policy too, there is now no shortage of ideas about how to generate ideas. [/su_pullquote]
Around the world, countries are undertaking plans to promote innovation and research and development as the drivers of the “next wave” competitive advantage. Singapore, for example, has recently released its 5 year Research Innovation Enterprise 2020 Plan (RIE 2020). Australia announced its Innovation Policy last month as “Welcome to the Ideas Boom” (Australian Government 2015). With the Opposition party releasing its innovation policy too, there is now no shortage of ideas about how to generate ideas.
Australia’s economy is in many ways in transition. It is a small leading resource driven economy (with a strong services sector), whose growth has been fuelled in recent times by China’s insatiable demand for raw materials and commodities. However, with China’s economic picture clouded and its own structural adjustment underway, policy makers ask where will the new sources of growth and competitiveness come from for Australia? Enter innovation policy.
Welcome to the Ideas Boom is a comprehensive package which we describe as being the six “C’s”: Companies, Capacity building, Collaboration, Connections, Challenges and Cultural Change.
Stimulating the start up sector is a key to growth.
As the innovation package contends, drawing on PricewaterhouseCoopers’ analysis, start ups have the potential to generate $109b for the Australian economy and create 540,000 jobs by 2033. However, early stage funding is critical to realise this potential. As such the Innovation Package will implement a number of measures: concessional tax measures for early stage investors in start up’s (so called Angel Investors) and later stage venture capitalists (pre-IPO), flexible arrangements to allow businesses to offset losses in one activity against profits in other activities and measures to encourage crowd sourcing equity finance.
The impact of these measures will be to unlock the latent entrepreneurialism and to embrace risk that dynamic economies feed on.
Like India, Australia has a distinguished public sector research capability in diverse fields including agriculture, environmental management, medical research and space technologies. Further, unlocking and leveraging the knowhow of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and other research bodies to generate more commercial applications will be a key challenge. The new $200m CSIRO Innovation Fund is designed to stimulate start ups and spinoffs from research and expand accelerator programs, which give researchers the support to develop, test and take ideas to market in highly specialised and facilitating environments.
[su_pullquote align=”right”]Welcome to the Ideas Boom is a comprehensive package which we describe as being the six “C’s”: Companies, Capacity building, Collaboration, Connections, Challenges and Cultural Change.[/su_pullquote]
In a similar vein, an incubator support program with a focus on regions and sectors of high innovation potential will be established to help with business mentoring, funding and resourcing, and access to business networks and knowledge transfer.
Another major element is the pro-active support for next generation “innovation architecture”: key infrastructure in areas such as super and quantum computing; cyber security, radio telescopy and the Synchrotron (large scale, state of the art infrastructure to allow for complex research into atomic substructures and the like).
To have too many public agencies overseeing policy advice and development is a recipe for lack of focus, duplication and waste. As such, Innovation and Science Australia will be a new independent body to provide strategic advice on government issues, promote greater co-ordination between specialist agencies and introduce long term thinking into identifying the nation’s priorities.
A plethora of reports has identified weaknesses in collaboration, especially between public sector researchers and industry (Australian Government: Chief Scientist 2014; Business Council of Australia 2014). Collaboration is key to building, and building on complementary capabilities, developing synergies, accelerating the deployment of knowhow through the economy and defraying costs and risk. Breaking though silo’s that have often constrained the free flow of ideas and knowhow are behind a number of the initiatives.
In the Australian innovation package, the key elements are: introduction of facilitators to ensure that businesses can access key innovation and scientific infrastructure, financial support for corporate researchers to work in public research organisations and vice versa, promotion of stronger engagement between research and the vocational education and training sector to better link, in effect, theory and practice, and funding support to fast track key collaborative projects between industry and universities.
It is hoped and expected that these measures will provide for a much more dynamic, flexible environment for the cross-fertilisation of ideas.
It is increasingly the case that in a global interdependent world, ideas and knowhow are mobile and transcend national boundaries.
As such the Australian Government is moving towards a Global Innovation Strategy with a signature piece being the establishment of “Landing Pads” in Silicon Valley, Tel Aviv and other locations. A “Landing Pad” is a physical space for Australians to undertake entrepreneurial and innovative activities abroad to forge and build on contacts and networks in the specific locations and translate ideas into marketable products and services.
Also as part of the internationalisation of knowledge, a new visa class, the entrepreneur’s visa will be instituted to bring new ideas, experiences and capability into Australia, while permanent residence pathways will be facilitated for overseas STEM and Information and Communications Technology graduates.
Linking Australia into the global flows of people and ideas will be salient in these measures.
The Government is to nominate five national policy and service delivery challenges with businesses invited to submit proposals to address challenges. The winners will receive grants and the most successful ideas will potentially receive further assistance to transcend to the prototype stage.
This approach, an important arm of Government procurement policy, calls for devolved solutions to complex national problems.
Arguably, the centrepiece of the Innovation policy package is intended shifts in thinking and acting. Reforms to insolvency laws to reduce the stigma of fear of failure are proposed and have been long overdue. Also noteworthy is the growing emphasis on new approaches to measure research impact, including engagement with the industry. This is in the spirit of breaking out of research silos and rigid mindsets, and shifting the emphasis away from purely publication centred research outputs.
With a growing concern that Australia’s young do not pursue studies and careers in Science, Technology, Engineering and Mathematics (STEM), especially females, the Government is attempting to promote cultural change through awards and prizes, science challenges for students, teacher training and interestingly, play based learning apps for educators.
Stimulating minds today will bring benefits tomorrow.
There is much to commend in the policy. A number of measures are designed to strengthen capacity, unlock valuable institution-specific knowledge, reach out to the world and inspire the next generations of would be scientists, entrepreneurs and technologists.
However, in our view, even more can be done in the following areas:
- Bolder approaches to globalisation of ideas through positioning Australia as an innovation hub in key global challenges (e.g. health care, environmental management and new energy sources) and leading global scale open source projects
- Promoting community driven innovation – local solutions to local problems which can then be scaled up at a regional or national level – involving much greater co-ordination between various tiers of the government (Federal, State and Local Governments)
- Stronger emphasis on diffusion of knowledge throughout the economy
- A “beyond STEM” approach to innovation recognising the interdependencies of scientific research and non-research forms of innovation such as design and organisational systems
- Further emphasis on social dimensions of innovation including population ageing, and lifestyle
- Defining a stronger role for cities in the process and outcomes of innovation, since cities can be both the problem and the solution in many areas such as climate change and health care.
- A stronger ”lifecycle” view of innovation and entrepreneurship which goes beyond the traditional emphasis on start-ups (and early stage firms) to include existing businesses, and which follow the contours of business activity from initial product, service and process development to (potential) internationalisation of business activity, market and product diversification, and eventually possible exit and corporate restructure.
- Finally innovation policy making should also be located within the context of a vision of what the Australian economy can aspire to in the long term and what is the magnitude and scale of the required transformation and adjustment impacts.
- Australian Government 2015: Welcome to the Ideas Boom www.innovation.gov.au accessed December 7 2015.
- Australian Government (Chief Scientist) 2014 Science, Technology, Engineering and Mathematics: Australia’s Future.
- Business Council of Australia 2014: Building Australia’s Innovation System 2014.
- Research Innovation Enterprise 2020 Plan (Singapore RIE 2020) www.channelnewsasia.com accessed January 27 2016.
Dr Anand Kulkarni is the Senior Manager Planning and Research RMIT University in Melbourne Australia overseeing planning, analysis and strategic projects for the University. Anand has previously held Senior Management and Executive roles in the State and Federal Governments of Australia leading large scale policy development. Anand has particular research interests in the Indian Economy, innovation and industry development. Anand is also a Fellow at the Centre For Policy Development in Australia. Anand holds Honors, Masters and Ph.D in Economics
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