Innovation slides down, down Downunder

Ian Nisbet

A couple of Prime Ministers ago the word ‘innovation’ was pushed into the public consciousness with the launch of the National Innovation and Science Agenda (NISA). With a lot of fanfare – driven by a $28 million, taxpayer-funded, advertising campaign – Australians were told about how we were going to create the industries of the future.

However, like the PM from that time, Australia’s innovation agenda seems to have largely disappeared without a trace.

While it was far from perfect, the NISA was at least a step in the right direction. And, based on the latest report on Australia’s place in the innovation stakes, it was a step that was, and still is, desperately required.

Canberra Cartherics bridge
Innovation policy seeks a bridge over troubled Canberra waters

Recently, the results of Bloomberg’s 2020 ‘Innovation Index’ were described in an article on the Visual Capitalist website entitled “Ranked: The Most Innovative Economies in the World”.

The survey ranked 60 countries across seven criteria: R&D intensity, patent activity, tertiary efficiency, manufacturing value-added, productivity, high-tech density, and researcher concentration.

And out of the top 10 Australia ranked … (drum roll) …. nowhere! And out of the top 20 Australia ranked … (another drum roll) … dead last. At least we beat New Zealand which came in at 29.

But this is far from a stellar performance, given we are a developed nation with a strong record in fundamental science. Unfortunately, when it comes to taking applied science from the lab to the marketplace, we are clearly batting below our ability.

Of the seven Bloomberg criteria, Australia’s best performing metric was – wait for it – productivity! Given that Australia’s productivity growth has been running on empty since last century, this doesn’t say much about its performance against the other criteria.

One thing about Australia’s ranking in this latest innovation index – it’s consistent. In virtually every innovation ranking over the past decade, at least, Australia has consistently performed poorer than most – if not all – of its comparator developed countries.

Where Australia has been anything but consistent is in its innovation-related public policy. The diminishment of NISA is one example. A more recent example is the federal government’s misguided attempt to introduce changes to the R&D tax incentive.

That’s because the R&D tax incentive is one of the few pieces of government policy that encourages business R&D and provides much needed support to R&D-based companies. It’s also one of the few pieces of innovation policy where Australia leads the world.

Long-term consistency of public policy is widely acknowledged as one of the keys to driving the desired outcome. In R&D intensive industries, particularly in life sciences where product development cycles are measured in decades, companies need to know that the investment rules won’t change after each election or change of leader.

But maintaining policy consistency is difficult in the Australian context. That is, thanks in good part, to a ridiculously short three-year political cycle, together with a lack of bipartisanship on matters of long-term national importance.

When a new government is elected, or a new leader appointed, the stamp of the new leadership is apparently more important than the value of existing policies and programs. Effective policies, like the R&D tax incentive, get lost, or at least tweaked, in the shuffle.

If we want to be a 21st century leader rather than an also-ran, the chop-and-change approach to daily politics must end.

In the absence of a fundamental change in attitude, we will continue to spin our wheels and waste time, talent and resources. And continue to languish at the bottom of the innovation league.

Ian Nisbet is a Corporate Advisor at Cartherics, an Australian company focused on research, development, clinical testing and commercialisation of pharmaceutical products and medical services.

Do you know more? Contact James Riley via Email.

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