Innovation, which we have previously defined as a state of mind, about seeking to do things in newer and better ways, is important to Australia for a number of reasons.
Malcolm Turnbull has released his government’s innovation statement, declaring that unlike a mining boom, an ideas boom can last forever.
But an innovative country means more than a flourishing startup ecosystem. By becoming more innovative, Australia has more control over its future. We will be the ones generating and embracing new ideas, directing research and development in ways we want and ultimately benefiting from it.
If we want the goodies later, we need to innovate now
A world without innovation is one where average life expectancy would be far lower and the global population smaller, says Beth Webster, Director of the Centre for Transformative Innovation at Swinburne University.
These developments can be a slow process, sometimes taking decades between the genesis of an idea and actually finding its way to regular consumers. Or slowly evolving through use to become more workable and useful in areas not originally thought of.
So while the current talk about about innovation may be rather nebulous now, “if we fail to take innovation seriously now, we will fail to enjoy advantages later in life”, says Webster.
Just think of technologies such as ceramic brakes, which took years to go from Formula 1 cars to an option on the cars the rest of us can enjoy.
And Webster has other examples, from healthcare through renewable energy, products which Australia can help the world create, but only if we are part of the innovation conversation.
“If you want cures for fatal childhood cancers; technologies to de-carbonise our energy; better security measures to prevent acts of violence; and aides for people to enjoy a fulfilling retirement, then we still need to innovate and do so in a way that we control and prioritise the problems we tackle first,” says Webster.
Other countries are doing it
Australia is not alone in this conversation. Even as we debate putting more emphasis on developing new technologies and ways of doing things, so are other countries. And, as Professor Marcus Foth from the Queensland University of Technology points out, the countries bearing the R&D load are changing.
“In the old days, innovation (or “R&D”) was thought of being done predominantly in the ‘West’, and places with low wages and weak labour policies would translate this innovation into manufactured products,” says Foth.
“Not anymore. China is innovating its identity and self-efficacy.”
But this isn’t a zero-sum game. Just as developing countries have adopted and learned from what has come before, we can learn from them. We can bring their innovations home, and build on top of them.
“Adopting the innovations of others is beneficial — either from overseas or by simply emulating best practice of others here too,” says Glenn Withers, Professor of Economics at the Australian National University.
That’s not saying there aren’t advantages in getting ahead. Just think of the hundreds of millions the CSIRO has earned from the invention of Wifi.
“There are great first mover rewards from being the innovator ahead of the imitator. Think of the wealth of (Bill) Gates or (Mark) Zuckerberg. But also think of Frank Lowy (Westfield) and his innovative design of shopping centre systems here and globally, or Macquarie Bank’s development of Infrastructure Financing Partnership packages in Australia and across the world that allowed it to become the “millionaire factory,” says Withers.
“Or think of the Australian development of Medicare by social scientists Scotton and Deeble as a vehicle for better funding health care at half the cost and with better outcomes than, say, the American system.
“We want innovation on a broad front.”
More than the rent which can be extracted from creating something new and patenting it, Withers argues that if Australia can establish proficiency in a new field, we can build an industry around it. It’s an old economic idea called comparative advantage, the basis for much of the world’s trade. Countries export products and services they are good at producing and import the ones they aren’t.
This is what we’ve been doing for the past few decades with mining and agriculture.
“Australia has been able to partly create its prosperity through its natural advantages, in agriculture and mining for example,” says Withers.
But countries with lots of resources can experience what’s called a “resource curse”. They become so focused on exploiting natural resources that they either don’t or can’t develop other industries. A variant of this is called a “Dutch disease”, after a phenomena where one industry draws so much capital that other industries become less competitive.
“Life can be too easy — and only if we use nature well and use well our own skills and intelligence in all areas can we hope to more securely deliver sustainable benefit,” says Withers
A more innovative Australia can create new industries to help escape the resource curse. It means developing products other countries need, just as they want our iron and coal now. The examples are there to be seen, with companies such as Atlassian and Canva selling to the world from offices in Sydney.
“After all, the natural advantage industries are less than 10% of employment. Services are 70% or more and we need innovation there too to prosper into the future, post the mining investment boom,” says Withers.
“That this can indeed be done, is the lesson from the Singapores and Taiwans, that lack any natural resource base.”
Into the future
There is now bipartisan support behind developing a more innovative Australia. Increased funding for research organisations, and new collaborations between entrepreneurs and researchers, offer a future we can’t yet imagine.
As Webster points out, we can invent our way out of a climate calamity. Innovation holds the key to many of the challenges we face.
“If Australia does not care about innovation, as a nation we will fall behind not only in our ability to respond to economic challenges globally, but also in using our collective brain power and intelligence to tackling the world’s biggest and most wicked problems and challenges,” says Professor Foth.
“We need to question key concepts such as growth, consumption, efficiency gains, productivity gains, population increase, etc. Profound innovation not just in product or service contexts but more so in lifestyles is required to turn humanity around towards a prosperous descent.
“Australia should not leave this work to others, but sit at the table and in fact, lead the discussion and collaborate on this important endeavour to sustain life on Earth.”