James Riley
February 7, 2017

ISA report sets new benchmark

Policy

ISA report sets new benchmark

Dr Charles Day: Creating a new set of metrics to benchmark innovation policy performance

The sector’s most senior advisory board Innovation and Science Australia has unveiled a landmark review that tells us much about what we already know: We are pretty good at research and pretty bad at translating new knowledge into social and economic gain.

This is the same finding as the many, many reports into the innovation system that preceded it in the past decade or so.

The central theme of the 200-plus pages of the Innovation Science and Research System Review is very familiar – that Australia is lagging behind international competitors in key areas and that there is much work to be done if Australia is to break into the top-tier of innovation nations.

What makes this report different is the set of metrics ISA has put in place across 20 key areas of the innovation system, providing a somewhat more Australia-specific benchmark for measuring the effectiveness of policy in the years ahead.

Of course, like the stack of research papers that preceded it, ISA has produced some grim reading as another urgent call to action for policy-makers.

But there is enough in here for optimism too. Certainly there is enough evidence produced to demonstrate that Australia’s “lagging” is not somehow hardwired into the national DNA, and that government policy levers have made a difference in key areas

That at least should give comfort to those people – and there are more than a few – that worry we have simply been pissing public money away.

But regardless, the Innovation Science and Research System Review is a benchmarking exercise. It was produced as an input into the main game, which is the ISA’s 2030 Strategic Plan which due to be published in the fourth quarter after an long industry consultation that starts next month.

Innovation and Science Australia was announced in December 2015 as a key plank in Malcolm Turnbull’s National Innovation and Science Agenda (NISA). Its board brings together local giants like Bill Ferris and Alan Finkel as chair and deputy chair, AirTree’s Daniel Petre, Atlassian founder Scott Farquhar, startup and VC legend Paul Bassat, and ANZ bank star Maile Carnegie among others.

Fourteen months on, the report being made released today is the new board’s first major piece of public-facing research.

Innovation and Science Australia’s new chief executive officer Charles Day – appointed in November – says the Performance Scorecard produced in the report provides a more granular level of analysis for the Australian system than that found in reports like the Global Innovation Index.

And this should provide a benchmark roadmap for policy-makers as new programs are rolled out. ISA has not committed to updating the benchmarks annually – Dr Day says the frequency has not been decided – but says it will work with the Industry department’s Office of the Chief Economist to update the numbers “regularly”.

In the first instance, he said the performance scorecard is up for debate during the consultation process in the coming months. After that, he said it would be updated regularly enough to steer the progress of the strategic plan through 2030.

As for the somewhat heroic time horizon of 2030 for the ISA strategic plan, Dr Day says it’s about right for Innovation and Science Australia’s ambitions.

“At one level people often criticise innovation strategies for being too short term in their nature. Some of the changes we want to see are going to take longer than three to five years – or one to two electoral cycles – to take into account,” Dr Day said.

“And obviously if you go super long-term it gets harder and harder to anticipate what the world might look like. But I like 2030 because it’s effectively one education cycle – kids go from starting school to finishing school in 12 to 13 years,” he said.

“And so kids going into the school system this year will be into the university system in their first year in 2030. That seems like about the right time horizon to be thinking about some of these big issues.”

The ambition, of course, is to create a long term view of policy consistency. This would naturally be a theme of the 2030 strategic plan: Long term consistency.

Aside from underlining the “known knowns” of the Australian innovation system of being quite good at research and not so good at translation, this performance review has thrown up a couple of surprising findings, Dr Day says.

Most surprising is that the popularly-held view that Australians suffer under a risk averse culture is not supported by the evidence. Certainly it is not as great an issue as popular thinking has it, Dr Day said.

“That self-image of Australians being inherently risk averse is not necessarily supported by the evidence,” he said. “There are some challenges around long-term thinking and the appetite for long-term planning, but on the general theme of risk-appetite, we are better than I think we give ourselves credit for.”

The other surprise comes from the strength of some of the startup ecosystems across the country. That strength has not yet started to show up in some of the more conventional, economic statistics that tend to lag by a few years, but was something that was pronounced enough to be remarkable – even by those immersed in those ecosystems.

Dr Day said this was true not just of inner-city metropolitan ecosystems, but had startup ecosystem strength had shown up in regional centres also, with Geelong and Wollongong the standouts.

The role of targeted state government programs, and the interactions of Australia’s three tiers of government will be a key feature of the 2030 strategies.

While there was a view in some parts of the industry that state versus state rivalries were counterproductive to the national innovation system, Dr Day takes a different view. While there is a need to avoid duplication and to “harmonise” the tiers of government, a competitive approach across the states is not a bad thing.

And programs that are found to work in one state can then be picked up by others.

“You don’t want duplication, but I don’t think you need complete homogeneity either – because the very nature of the Federation means you can use differences to be innovative.”

This is a long game, Dr Day said. That doesn’t mean you don’t need to act with urgency in refining and redirecting the innovation system. But it does mean you need to think big, and think in the long-term.

He encourages people to look at innovation ecosystems that have performed well, and to study where they came from. Israel’s startup nation success is obvious, or even the changes that have been occurring more recently in the UK.

“Over a decade you can actually achieve a fairly significant shift in the way economies operate,” Dr Day said.

And that’s what the Q4 release of the Innovation and Science Australia 2030 Strategic Plan is all about.

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