Malcolm Turnbull will announce his government’s innovation statement today.
It’s expected to contain a range of measures to encourage commercial risk-taking in small, high-growth businesses, from capital gains tax breaks to softer bankruptcy rules and the reinstatement of some CSIRO funding.
After that comes the implementation of the measures and many of them will require parliamentary approval.
But there is a broader challenge for both sides of politics when it comes to how to deal with the inevitable squeezes on industry that disruptive businesses will put on powerful, established incumbent businesses in the Australian economy.
Writing in The Guardian, Labor MP Ed Husic lays out a succinct warning on the likely political reactions – knee-jerk, if you like – from the major parties when they see established employers staring into the abyss.
The disruption being absorbed and responded to by corporate Australia also poses challenges for both the centre left and centre right.
On the Labor side, we’re confronted with the need to embrace an evolved form of economic liberation being unleashed via the digital innovation propelled by the internet. As industries and jobs are affected, the natural response is a regulatory one to limit the scope of change.
A heavy-handed regulatory response is comforting in the short term but devastating in the years ahead…
Conversely, the coalition is likely to find itself confronted by the pleas of corporate incumbents that will demand their own form of digital protectionism. You can see this in the media space where major players resist copyright reform and where bigger business will devote themselves to a perverse form of innovation activity – shielding themselves from smaller, more nimble competitors.
The full piece is here.
Australia has a solid track record of protecting certain industries, most notably the car industry which received billions of dollars in taxpayer-funded subsidies from both sides of politics before the inevitable happened.
If you want an example of what Husic is warning about, that’s a good thought-starter.
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