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:

1.  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.
2. 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.
3. Involve those with business and commercial experience on all panels charged with allocating government funds in support of innovation.
4. 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).
5. 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.
6. 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.
7. 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.
8. 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)

1. We live on the original terrarium with finite resources;
2. 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
3. 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.