Denham Sadler
January 29, 2018

Strategy a clarion call to action

2030 Strategy

Strategy a clarion call to action

Michaelia Cash: Government to play a lead role in creating an innovation culture

Innovation and Science Australia has released its much-anticipated 2030 strategic plan, issuing a “clarion call for action” to transform the country into a top-tier innovation nation.

The report, ‘Prosperity through innovation: A plan for Australia to thrive in the global innovation race’, details five innovation imperatives and gives 30 recommendations to government to improve Australia’s innovation, science and research performance by 2030.

The plan’s centrepiece is a push for highly ambitious, large-scale National Missions to inspire the country and address some of the biggest issues facing society with innovation, including in medicine and the environment.

The expansive plan also includes a focus on improving the research and development tax incentive, providing a world-class education system, improvements to government procurement and means to tackle Australia’s commercialisation problem.

In late 2015 as part of its $1.1 billion National Innovation and Science Agenda, the federal government established Innovation and Science Australia, an independent board of 15 entrepreneurs, investors, researchers and educators.

It tasked the new organisation with producing a strategic plan to advise government on how to “accelerate innovation and optimise Australia’s innovation system out to 2030”.

The ISA board includes Chief Scientist Dr Alan Finkel, Seek co-founder Paul Bassat, ANZ digital head Maile Carnegie, Atlassian co-founder Scott Farquhar and Department of Industry, Innovation and Science secretary Dr Heather Smith.

In the report’s introduction, ISA chair Bill Ferris said that innovation runs through Australia’s history, but significant investment and support is required to ensure the country remains competitive in the global innovation race.

“Looking towards 2030, innovation will be integral to the expansion of Australia’s economy, keeping its workforce strong, and addressing societal challenges,” Mr Ferris said.

“Australia will need to be competitive in a global innovation race by scaling up more high-growth industries and companies; commercialising more high-value products and services; fostering great talent and darking to tackle global challenges.”

“Yet just at the time when Australian needs to accelerate its innovation performance, we are falling behind our global peers, particularly in student performance in science and mathematics, and in business investment in research and development,” he said.

“This is more than a canary chirp in our economic mineshaft: it is a clarion call for national action.”

Newly appointed Minster for Jobs and Innovation Michaelia Cash said she welcomes the report and that the government has already moved to action some of the recommendations.

“The government can and should play a leading role in creating an Australian innovation culture which is the reason we launched the National Innovation and Science Agenda. Innovation is creating the jobs of tomorrow,” Senator Cash said.

“Every Australian can benefit from and be innovative regardless of age or job, and for us to become a top tier innovation nation we need everyone to be involved.”

“This report builds on the government’s National Innovation and Science Agenda which is already showing results. Through further investment in the small and innovative business sector we can ensure we continue our record jobs and GDP growth.”

The 2030 report is based on five “urgent” imperatives for action across the innovation system: education, industry, government, research and development, and culture and ambition.

Each of these imperatives include a number of recommendations to all levels of government in Australia, with 30 included overall.

“Australia should be confident, but not complacent, that we can be at the forefront of the global innovation race and reap the opportunities this brings. We have a strong economy and have shown we can launch globally successful companies in new, high-growth industries,” the report said.

“To realise future opportunities in Australia, we need to make Australia one of the best places in the world in which to undertake innovation, science and research, and to maximise the spread of benefits to all Australians.”

The culture imperative focuses on adding a “more ambitious chapter on innovation to our evolving national stories” through the launch of a number of ‘National Missions’.

These National Missions would “accelerate Australian innovation and encourage more collaboration across the innovation system” through large-scale initiatives designed to address “audacious challenges”.

“They are powerful means to inspire innovators, develop solutions to big problems and generation national passion and pride in innovation and science achievements. National Missions will challenge potential Australian innovators to excel, and demonstrate to the world that Australia can deliver breakthrough innovation,” the report said.

“Chosen well, they will catalyse activity around Australia’s comparative advantages, and include the entire community on the journey of creating Australia’s future,” it said.

“An Australian nation that can take on National Missions of this scale will proudly make innovation a core part of our national story and culture.”

This will be “large-scale, complex undertakings” that will require private-public collaboration and large amounts of funding.

The report points to the Snowy Mountains Scheme and Square Kilometre Array as examples of successful National Missions already undertaken by Australian governments.

ISA has identified genomics and precision medicine as an ideal candidate for the first of these National Missions. This would deliver health and innovation benefits for all Australians, with an aim to make Australia the “healthiest country on earth”, it said.

The mission would require $200 million in government funding over five years, which it said could come from the Medical Research Future Fund. This would include matched support by participating states and territories.

The report details three key criteria for National Missions: robust, credible and in the national interest, bold and new, and able to bring about a step-change in Australia’s innovation capacity and culture.

They will need to involve the right people, be designed for success, have a flexible roadmap and maximise the flow-on benefits of the mission. Two other possible candidates for National Missions by ISA were the restoration of the Great Barrier Reef and the decarbonisation of direct-combustion sector.

In education, the plan said that Australia should focus on the teaching of STEM and 21st century skills and the development of teachers and school leaders. Its recommendations include a nationally agreed minimum number of annual hours in discipline specific training and teaching of 21st century skills, and a review of vocational education and training.

The industry imperative provides a focus on the research and development tax incentive, which it said is the “single largest innovation support program”. ISA supports the recommendations included in the ‘Three F’ review of the R&D scheme, recommending a $4 million cap per year and a maximum cumulative refund of $40 million per company, along with the replacement of the threshold with a 1 per cent of total annual expenditure trigger.

The report also recommends that an SME government procurement target of 33 percent of contracts be implemented, along with a framework to identify, predict, encourage and evaluate spillover benefits.

It focuses on how to improve Australia’s translation and commercialisation of research, through a range of tax incentives and government funding.

The ISA 2030 plan looks to combat the Government’s past troubles with assessing the effectiveness of its innovation policies by including a series of metrics, strategic reviews and reportable data.

The government’s National Innovation and Science Agenda was slammed by the auditor-general, which said in a report that it “relied on assertions rather than evidence”. The report found that “a number of important matters were not addressed in the advice to government, including implementation risks, governance and evaluation arrangements”.

ISA is looking to avoid a similar fate with its 2030 report, with plans to undertake reviews in 2022, 2026 and 2030, as well as annual reporting against progress, while scorecards will include academic ranking of world universities, business expenditure on R&D and venture capital investment.

It also recommended that all government programs and policies focusing on innovation should set aside 2 percent of their budget to the evaluation of the predetermined outcomes.

To develop the plan, ISA received 130 submissions on its issues paper and saw 233 people or groups participant in its consultations, including 176 direct interviews.

It’s been a long wait for the key report, with continual delays the result of a number of switches in the country’s innovation minister.

ISA has also been criticised for its use of external consultants in its development of the report.

Canberra-based consultancy Howard Partners was awarded $425,000 to give advice on Australian and international ecosystem issues and to run the engagement and consultation process, while McKinsey received $500,000 to handle the final preparation of the report.

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