Yes, process and entreprenurial innovation is crucial - but let's not forget the importance technical innovation.

It is always hazardous to make a distinction between technical and non-technical innovation, lest one be accused of favouring one over the other. As has been pointed out, technical innovation is still a critical area where Australia is falling behind the rest of the world.

Business spends only the equivalent of one per cent of GDP on R&D, half the OECD average and a third of that of the leaders - even Icelandic business does better. Our venture capital sector which might fund businesses to come from research is 0.1 per cent of GDP - again even Iceland manages more. Australia accounts for a mere one half of one per cent of global exports in technology-intensive industries.

The fact is there are few R&D driven business on the stock exchange other than the familiar, Cochlear, Resmed and CSL. Most of our top companies are banks or miners. Multi nationals from Ericcson to JDS Uniphase have voted with their feet and ceased large scale R&D in Australia while most global giants in pharmaceuticals and IT spend a fraction on R&D locally compared to overseas rates.

Innovation comes from entrepreneurs - and rarely from science.

There is a pervasive Australian myth that goes something like this: innovations come from brilliant scientists who pass on their discoveries to grateful businessmen and women and, eventually, the consumer. This linear progression does occur, but is a rarity compared to the real source of Australian innovation - the entrepreneur.

The world's stock of science and technology is increasing at a rapid rate and, in fact, there is already enough of it around to fuel a number of industrial revolutions. What is in short supply are the people who can assemble technologies and ideas into a coherent business plan, raise the finance and assemble the team that can turn all these inputs into something consumers value - in short, into an innovative product or service.