By Steve Blume
Throughout his leadership and in the election campaign Kevin Rudd has painted Labor as the Party of innovation and has asked that we contemplate a government that would encourage ‘fresh ideas’ under his ‘new leadership.
Laudable notions these certainly are and admirable goals too, but at the overview level raised in the campaign they are motherhoods – who would ever disagree.
What sorts of actions might be taken by a Labor Government to ensure that Australia is positioned to move beyond our reliance on the current mining boom? How does a national government produce a substantive attitude change in all tiers of government to work co-operatively with the private sector and academia so that innovation is truly encouraged?
This could be the core of a book, but I shall throw out just a few points and see whether they encourage the depth and breadth of interest I think are needed to answer that question. My opening position is that the importance of innovation has been poorly understood by governments (politicians, their advisers and bureaucracies) and Australia is much the worse for that. There are some notable exceptions, but they have so far not prevailed.
Innovation can arise anywhere and in various contexts – at an individual scale by someone simply modifying and improving the way something has previously been done or at a corporate level by groups combining invention and novel ideas to create new devices, businesses or business processes. We should reward and build leadership styles which support that continuous improvement approach, as any increase of innovative thinking and behaviour will improve our lives (and the economy too).
The innovations I want government to focus on are the kind that some have called ‘disruptive’ – those that cause a new and unexpected direction to be taken. Not simply technologies, although these often are at the heart of innovation, but novel and creative thought that too can wrought great change.
So a Rudd government might:
Build a culture of innovation within its own parliament and its agencies starting with a real effort at reduction of legislation and regulation. There are some international exemplars that we could model ourselves upon – Canada and the USA have done well and operate under federal regimes. This is critical for those agencies who interact directly with business, but important for all.
Establish a Council of Economic Advisers and invite leaders of the business community to participate jointly with other members of our ‘civil society’ in consideration of specific national issues. There are ways to ensure this is not just another committee or talk-fest – these must be adopted or this will be a waste of time and money.
Involve those with business and commercial experience on all panels charged with allocating government funds in support of innovation.
Modify the way innovations are funded to give higher support for start-up ventures (and yes that means there will be failures). Most critically fund them in a way that ultimately gives a return on the investment should the venture succeed (even if that is five, ten or fifteen years away). This means a move away from direct grants or contracts to a new model which would change the nature of the funding obligations on both sides as milestones are met – with the successful ventures, returning profit to the investing partners (including government).
Actively support stronger relationships between universities and private sector funders. For example there is a pool of potential capital in the industry super funds that partly at least could be directed to innovation funding perhaps with a guiding lead by government through the Future Fund. There need to be protections from the real estate sink into which much funding to universities has fallen historically - where the majority of the money goes into buildings and administrative costs rather than the targeted research or innovation.
Impose a ‘societal benefit’ test as part of assessment processes to open opportunity and increase diversity of proposals, not constrict them. For example a proposal that would result in positive and sustainable environmental outcomes might be weighted higher than an alternatives that simply improve existing technologies.
Use the unique opportunity of Labor governments in all States and Territories to insist on the adoption of uniform legislation (in a range of areas) that has been talked about for years and has remained elusive. This will require finesse and co-operation using the rewards available through federal funding (talking quietly) and the potential might of corporations and foreign affairs powers (carrying a big stick). Having just lost money to two state bureaucracies through buying one car interstate and selling another car into different state I can attest personally for the need to rationalise even that sort of everyday transaction.
Insist that its agencies learn and understand about risk, especially about acceptable risk. That they do not currently comprehend the issues is shown clearly by the continued insistence by many government contracts for unlimited liability or liability at a level not even remotely commensurate with the risks associated with the delivery of the services or products to be purchased. Resources are available in the private sector to assist in this process – all commercial activity involves judgements about risk and return (but exclude assessment of the public good or societal benefit – this is a prime role for government)
This list is not exhaustive, but intended as a trigger for discussion. Meeting the challenges of climate change with which we are now presented will demand a level of innovation from Australia and the world never before seen. You and I might argue about timing or even the extent of environmental problems, but the facts are simple: We live on the original terrarium with finite resources;
Since the industrial revolution with rapid acceleration in the past 50 years, we have been living as though there are no limits. We have been poisoning our air, over-using our soils, exhausting our fresh and salt water resources, and building our societies on fossil fuels; and
This has to change and change fast to a globally sustainable future.
The only path forward is though innovation.
Steve is a former Labor adviser from 2002 to 2006 (to Kim Beazley MP and Bob McMullan MP). Prior to that he was a business person in the IT sector for 14 years focused on fixing poorly performing businesses and working with start-up companies. Steve also worked as a consultant and in his own business on change and risk management, disaster recovery and business continuity and was a public servant for 16 years until 1989. For more than 40 years Steve has been interested in, studied and been passionate about environmental issues and sustainability. Steve has an eclectic interest and solid understanding of many other areas of public policy. These are Steve’s personal views.
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Comments
a few thoughts
It's strange how so many people see the coming of Kevin Rudd as some kind of brave new dawn when his bid for power is based explicitily on being as similar to John Howard as possible. It's also ironic to see a left of centre party held up as one which will cut regulation and red tape, as this flies in the face of a century of experience in every democracy in the world. Old fashioned nationalisation is thankfully discredited but endless nannying of people's personal lives and clomping state control imposed in the name of 'equality' or 'climate change' or, whatever this weeks excuse is, has taken its place on the soft left at least in Britain and America.
The last thing which will promote 'innovation' is a bunch of civil servants trying to pick winners, endless committee meetings and national programmes printed on glossy paper at vast expense to the tax payer. All 'innovation' requires is free markets, property rights and the Government getting out of the way. A Council of Economic Advisers isn't going to produce anything except huge lunch expense claims.
Of course there will be start up failures, that's the whole point, but why should the Government be funding them? Private investors seeking profit will fund them if they think it's rational to do so. The Government shouldn't be telling universities what to spend their money on either. It's right that colleges fund new buildings, it's where their students will study for the next fifty years. It's not their businesses to sink large amounts of money into what may turn out to be business black holes.
The desire for states to produce 'uniform' legislation is strange as well. What about the Federal system? What about state democracy? You either have it or you don't. If you want all the state governments to produce the same laws then get rid of the whole tier of Government and rule everything from the centre. Australia may be large in geographical size but it's only got twenty million people. When the State Governments start coming from the right of centre, as they inevitably will once Labour gets into power, does the writer think the wishes of their electorates should be overridden by a left of centre majority in Canberra? Imagine the fuss if John Howard had tried to do the same. Laws are political, all of them, that's why Governments are elected to decide them in contested elections.
The idea that externalities should be factored into economic calculations is hardly a new one. Quite how the writer thinks this will happen is beyond me, especially given his stated hostility to over regulation. The Labour Government can 'impose' all the ‘societal benefit’ tests it likes, any company worth its salt will just laugh and move to Estonia where broadband actually works, a long oppressed people understand freedom and company taxation is a flat ten percent.
The point about risk is an interesting one and goes wider than the author supposes here. The lack of appreciation of 'risk' is at the heart of many problems in our essentially problem free lives. The safer we are as individuals, and the more prosperous as a society, the more obsessed wtih ever tinier risks we become. All those middle class parents panicking over the precise contents of dear little Tarquin and Jocasta's organic, fair trade, cruelty free lunchbox should take a walk through a cemetary some time and see how many 29 year old women used to be buried alongside their two year old children.
The 'facts' he concludes with are entirely wrong headed however.
We do not 'live on the original terrarium with finite resources' for example. New York was once forest and swamp and there's nothing original about it now. The computer I'm typing on is made of oil and sand. Our resources are not finite because our greatest resource, and the one the writer was originally championing, is our intelligence and creativity. Known oil reserves are higher now that they were in 1970 and we're no more likely to 'run out of resources' than London is to grind to a halt under all the manure produced by too many hansom cab horses. It is typical of left wing thinking to think that 'the pie' is a set size and should be divided by, guess who, left wing thinkers for the benefit of all. The more rational response is simply to open a bakers shop and get rich baking more pies.
The progress man has made since the industrial revolution has been to the great benifit of mankind. Does he really want to return to a world of back breaking manual labour and long winter nights spent knitting socks in the dark? The problems of poverty in the third world can only be solved through economic growth. Fifty years ago Mao killed fifty million chinese through the disaster of the 'great leap forward', now the Chinese are reaping the benefits of economic, if not political freedom. Does he want everyone to stay an impoverished peasant? That is left wing thinking now?
The vast majority of megafauna wiped out in human history was destroyed by primitive hunter gatherers. The aboriginies wiped out the car sized wombats and marsupial lions in Australia, just as nomadic hunters killed off the mammoths and sloths of north and south America. The polynesians wiped out everything island by island in a huge wave of destruction. It's only advanced rich countries which actually preseve the natural environment. The dreadful environmental record of the Soviet Union stands in sharp contrast to the high standards in the United States. Yes really. Try paddling in the Aral Sea these days.
Things are actually getting better, not worse. Air quality is now much higher than it was fifty years ago in developed countries and the idea that water is going to run out in some way is ludicrous. Fossil fuels are used because they're by far the most efficient way of storing energy that we have. There are things we can do, putting out all the endless coal mine fires in China would save more Co2 emmissions than banning cars and trucks from the roads of North America, but as the environmental movement has morphed into just another stick to beat the USA, the West in general and capitalism in particular with then we won't hear much of that. I think land clearing in Australia is dreadful and pulping old growth forests ridiculous, so lets see the new Labour Government ban them.
Population only starts to decline when women are educated and free and rich. This will only happen when people all over the world have a good standard of living and this will only happen through free trade, democracy and property rights. A globally sustainable future is one based on optimism, progress and growth, rather than hand wringing, hair shirts and self hatred. Property rights would help remedy the 'tragedy of the commons' which is the state of the world's fisheries and a swift end to the stupid bio fuel fad would save a lot of forest from needless destruction.
Innovation happens naturally in a free society. New companies grow and old ones die. Interestingly increases in an economy's productivity are due to this rather than 'poorly performing' companies suddenly getting better because they've got a consultant in to tell them to get rid of middle management by the way. What Australia needs most of all to promote innovation are workplace reforms which allow employers to hire and fire easily. This has been the secret to the economic success of the USA and is the reason why France has been going down the toilet for twenty five years and is now engulfed by strikes. What's the Labour Party's attitude to liberal employment laws which encourage small and start up companies to take on new workers on flexible terms? Oh, I see.....
Genetically modified crops could be a great way to feed huge numbers of people in, for example, drier conditions than we have now. What will labour activists' attitude to innovation there be? Nuclear power could replace coal, just as it did decades ago in France, slashing Co2 emmissions, I'm sure that will get your support too. An end to heavy farm subsidies would mean a lot of economically unsustainable farms growing unwanted products in highly destructive ways could be allowed to fold and the land return to dry forest, I'm sure Labour is against farm subsidies isn't it?
Lastly, why is it 'Labor' exactly? What happened to the 'u'? It's a genuine question. If everyone in the Labour party hates America so much, and you know and I know they do, why do you copy their spelling in your name?
An example of why committees don't work
Think of every image of computers in Science Fiction or conjured up by futurists from the 1930s to the end of the 1970s. It's always the same, in books, TV, film and 'life in 2050' books, isn't it? Computers are always room sized mainframes, have whirring spools and they communicate either by talking or spewing out tickertape and they almost always think. Everyone, every writer, every scientist, every government busybody thought that was the future of computing. Of course they then predicted that work would disappear or that computers would gain self consciousness and turn evil, but these predictions and plot devices were based on an unchallenged assumption of what the future of computing actually was. Now imagine your innovation committee is trying to 'boost innovation' at the start of the computer revolution in, for example, 1980. They're rational intelligent people who have read all the books, know all the latest thinking and want to pick the right projects to back with lots of lovely taxpayers money. What fledgeling company are they going to back?
The company which promises a machine so powerful it must fill two rooms? Which can print out in English at a hundred words per minute? Which can actually talk or be talked to? A computer which can actually, maybe one day with ten years of research grants, actually think? Who knows, but I'm sure it would be one of them and I can tell you for certain which project would have been tossed into the bin straight away.
The computer which couldn't talk, which fitted on a desk and wasn't intended to think in any way shape or form. A computer which was really no more than a way of very quickly searching for information in a huge data base and cross linking that with other information. A computer which gained its power from being linked to millions of other computers sat in people's front rooms. The computer which you typed into on a QWERTY keyboard and which displayed its results on a TV screen. The computer, in short, which everybody uses today.
Computers were driven by games and porn, not government committees. They were driven by eighteen year old's too skinny and spotty to get laid any other way. This is why, with the best will in the world, committees for innovation not only don't work but are actively counter productive. Unless of course they simply serve as talking shops to get all the useless middle managers, academics and social science graduates out of the office, allowing the real innovators to get on with the real work armed only with a few rubber bands, a slice of cold pizza and the run of the company's labs. If this is the cunning plan behind your suggestion, then hats off to you sir. Somehow I doubt it though. Beaurocratic, top down, command solutions to anything, especially innovation, just don't work. South Korea produces most of the high tech entertainment gizmos in your house and North Korea produces graveyards full of children who starved to death eating grass. There's a pattern in there somewhere.
Somewhere behind that
Somewhere behind that lengthy rant was, I suspect, a spotty young computer nerd from Estonia. In any case, glad you got that off your chest and best of luck getting laid.
to the original post. you are absolutely right, Steve - innovation needs to be driven by people. It's early days, but I like the way Rudd is trying to organise the bureaucracy to deliver (and, hopefully develop) actual policy; something the previous government gave up on years ago.
The election highlighted a national mood for change, and this Government is in a great position to tap into it, taking us out of the cultural dead end we've been willingly led into over the past decade (a place where long rants about Left and Right take priority over ideas). To do this, Rudd must continue to spark out those fresh ideas and attitudes that spell inspiration.