James Riley
December 7, 2015

Turnbull reshapes economic future

Turnbull reshapes economic future

Stump speech: There has never been a more exciting time to be Prime Minister

With the launch of the National Innovation and Science Agenda, the Prime Minister has put his shoulder to wheel in steering a new cultural direction for the nation’s economic narrative, if not the direction of the economy itself.

The $1.1 billion in new spending on innovation and science measures announced by Malcolm Turnbull is modest. But this was never meant to be a big-spending ‘nation-building’ program of yesteryear.

Instead, the measures lay down important cultural markers for both government and industry, and provides priority objectives for education and research.

Outside of his first budget as Prime Minister, this innovation and science agenda will be the most important policy Malcolm Turnbull announces during this term of government.

It is a whole-of-Government statement of direction that will be reflected in everything else the Turnbull administration does in the next year – regardless of portfolio – and in the years following, if the Coalition is returned at next year’s election.

“The big gear shift here is a cultural one,” the Prime Minister said during a briefing inside the Innovation Statement lockup in Canberra. “If we can inspire Australians to be innovative, to look at things in a different way … if we can do that, then the opportunities are boundless.”

“This is a time for new things.”

And yet, it turns out there is nothing new under the sun. Many of the measures announced this morning are drawn from successful programs overseas, or are a modified rebadging of policy that has been in active discussion for some time.

Collectively they form a package that will be very welcome from the Australian tech sector – from startups to established local players.

The education and research sectors might be nervous about changes to the way that R&D funding is distributed, but ultimately they will also be the beneficiaries of the increased focus on business collaborations.

The cultural component of today’s announcement cannot be overstated. The mere fact of a whole-of-Government statement on innovation policy is in itself powerful. The fact that it was announced by the Prime Minister – and developed inside the PMO – makes it more powerful.

Culture flows from the top. And the recasting of a national self-image – and the resetting of the economic agenda – can only come about with the leadership of the nation’s most powerful voices.

Structurally, there are a couple of important changes.

Firstly, a new Innovation and Science subcommittee of the Cabinet is to be created, chaired by the Prime Minister. This gives whole-of-government innovation policy its most powerful patron, and a seat at government’s most powerful table.

Secondly, the low-profile independent body Innovation Australia is to get a make-over. It becomes Innovation and Science Australia, with a much expanded brief to drive better collaboration outcomes between the private sector and publicly funded research in Australia.

Innovation and Science Australia will be chaired by Bill Ferris (the venture capital and private equity veteran), with the deputy chair being the Australian Chief Scientist. The ISA will count among its members not only secretary-level representation from government, but also top Australian university administrators, research institutions, and a senior leadership contingent from the private sector.

Everyone will be watching this space extraordinarily closely, especially the research community. The ISA remit includes a more interventionist role in directing research funding – and developing the models that will provide “incentives” for collaboration.

It is not yet clear how the industry representatives on the ISA will get selected. Transparency will be a key here. We would be thankful if some of Mr Turnbull’s new thinking were applied here, to avoid a same-old cohort of industry blowhards.

The headline measures related to startups were not unexpected. These include:

  • Tax breaks to encourage greater investment in startups (including a scheme based on the UKs Seed Enterprise Investment Scheme,) as well as reform of insolvency laws to acknowledge the reality that entrepreneurs often fail several times before they enjoy success
  • New money to support incubators and accelerators, as well as new entrepreneur visas and streamlined access to international STEM and ICT talent through the existing 457 program
  • New programs and new money to encourage kids into STEM subjects at schools – and women into tech subjects and careers
  • Government as an exemplar user of technology services, and streamlining tech procurement processes that will get Australian startups and SMEs better access to Commonwealth’s $5 billion annual technology spend
  • Entrepreneur visas with the view of attracting people with ideas and talent to come and set up shop in Australia
  • Investment in a network of incubators – to the tune of $8 million – to drive better results for institutional research. It’s Christmas come early for some people.

A lot of those measures (and include in this the employee share scheme and crowd-funding policies) had already been canvassed. Certainly the industry has been pressing for these changes, and while it might now be a surprise to get nearly everything they asked for, the issues are well known.

Here are a raft of things – in no particular order – that I get a lot more excited about than tax breaks for investors.

Firstly, there is finally some recognition for the incredible competitive advantage Australia has as a huge exporter of education services. Namely, the Immigration Department is developing a program to provide an expedited pathway to Permanent Resident status for the best and brightest foreign students. Praise the Lord, common-sense has broken out.

Under the scheme, recent graduates with doctorates or Masters-by-research will find it easier to stay in Australia and make careers. This is will be especially applicable across STEM and related fields.

The reform of procurement and the creation of a Digital Marketplace by the Digital Transformation Office is good news. If it does nothing more than simplify procurement processes – especially for technology and technology services - then it will make it a lot easier for Australian SMEs and startups to become suppliers to government.

The Government also promises to deliver a Public Data Policy statement as part of the National Innovation and Science Agenda. This will formalise its commitment to open data and data-driven innovation. It means government agencies will have to make data openly available by default.

This is genuinely exciting, except that we have been down this path before. In 2009-10, the Australian Government was a leader in the open data movement, before the back-tracking of successive leaders. We hope the recommitment sticks.

It is easy to sit back and chuck rocks at big statements of policy-intent like the Innovation Statement. But this should be a day for the technology sector to celebrate.

Whether you work for a startup, a mid-tier Australia tech company or a multinational, there are more reasons to be cheerful about the future on the industry in this country than there were just a few short months ago.

That is a fact.

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