Collaboration is the key to innovation
Technology is delivering products that could only be dreamt about years before. Liam Kershaw-Ryan says Australia should be striving for an economy that encourages and supports a culture of continuing innovation.
The global economy has been in turmoil since 2008. We are experiencing the longest recovery in the history of the global marketplace. In this context, to ensure Australia maintains its strong economic position, innovation needs to be at the forefront of the government’s policy agenda. Innovation encompasses many sectors of the economy, including science, technology, mining and manufacturing. It also provides practical solutions to pressing problems in a society.
In 1960 the average life expectancy in East Asia was 39 years of age but by 1990 this had risen to 67 years. This can be attributed to scientific and medical innovation which has changed the world and goes a long way to explain economic growth and development in East Asia.
In Australia R&D and innovation resulted in the Cochlear ear implant, changing the lives of hearing impaired persons around the world. In terms of economic benefits, today Cochlear is one of the largest companies in Australia employing some 2,500 people. OECD reports on innovation’s impact on macro economic growth claims it can be by as much as 50% in developed countries.
Despite the clear importance of innovation these reports also show Australia consistently and unfortunately ranking below Hong Kong, New Zealand, the US and Western European countries on most innovation indexes.
There is no reason why Australian innovation should not be thriving. As Wayne Swan consistently notes, Australia made it through the height of the GFC “relatively unscathed.” We have the right economic environment for innovation; minimal debt, low unemployment and interest rates, company earnings are strong and access to capital for entrepreneurs is abundant compared to other nations that have tightened their belt post GFC.
In policy terms what then can the government do to ensure innovation? Policies that focus on collaboration between government, businesses and higher education have proven worldwide to result in innovation. In Australia collaboration between these three arms of innovative projects is at a low level. The Australian Innovation Systems Report found that only 2.4% of Australia’s innovation active businesses currently collaborate with research institutions.
To maintain our economic prosperity through innovation in a tumultuous global economic climate, innovation policy clearly needs to foster collaboration from which the benefits will follow.
Left Right Think Tank, an Independent and non-partisan think tank for young minds, has over a six month period extensively researched innovation, consulted with stakeholders and produced a policy report. The report entitled “Innovation: Collaboration is the Key” recommends and details two measures to strengthen collaborative innovation, namely a ‘Voucher-style Research Funding Scheme’ and a ‘Complete Package Funding’ system that would encourage the establishment of specialisation hubs within universities.
Vouchers would be provided by government to businesses so they can purchase university research. This will increase the degree and quality of collaboration between the two sectors which is currently woefully low. It results in commercially focused demand driven research. Commercialising great ideas is what innovation is all about. A similar recommendation was made in the 2008 National Innovation Systems Report. Vouchers have worked in the West Midlands, UK. In this case study 46 per cent of businesses receiving the vouchers had never collaborated with a university before receiving the vouchers. After using them, 57 per cent continued collaborative innovation with the university.
Secondly the policy report recommends that the government focus on and support areas of specialisation currently established within universities and research institutions. There is a need for more specialisation hubs. Most innovation nations are known for their hubs, whether it is the US (Silicon Valley) or Israel (science and technology). Once infrastructure and equipment are centred in one area, there is a location advantage with extensive knowledge and talent centred in one place. The by-product is business investment and therefore collaboration which is of course the key.
Liam Kershaw-Ryan is policy fellowship manager at Left Right Think Tank’s Victoria Branch. More information on Innovation in Australia and these two recommendations can be found at Innovation: Collaboration is the Key by Left Right Think Tank.
