As hundreds of startups and investors gather in South Australia, deputy premier Susan Close says an innovation push will drive higher wages and a more complex economy for the state, vowing to use “every mechanism possible” to get there.
“We do recognise South Australia has lower wages than other states and hasn’t grown as fast as some other states,” Dr Close said.
“So what we want is less simply bums on seats jobs and more careers for people in a more complex economy, generating more wealth.”
Dr Close, also in charge of the Industry, Innovation and Science, and Defence and Space Industries portfolios, says after a year in government it is clear the state’s brainpower is powerful but isn’t being completely harnessed.
Doing so requires everything from energy to education policy to be working in unison, she told InnovationAus.com.
“It’s all part of putting in all the building blocks so that we are able to lean more heavily on people’s intellect and capacity to generate wealth, [rather] than depending only on… the crops and rocks of natural resources that we are blessed with.”
While the resources sector remains important to South Australia, she said, it does not “add complexity and therefore don’t give us that secure high standard of living across the population”.
Dr Close, who has been the deputy Labor leader since 2018 and served as a manufacturing, innovation and trade minister in the previous Labor government from 2014, gained key portfolios in the Malinauskas government.
She says South Australia’s economy needs to decarbonise and complexify.
“Peter Malinauskas and I came in from opposition with a very clear agenda that we wanted to use every mechanism possible to have a more complex economy. And part of that is to be the place where highly complex industry happens, for example, defence.”
“Another part is to support industry to pivot for the new century, [with] very low carbon emissions. Because you can’t have industry going into the future without that.”
Last year, the Malinauskas government quickly cut some innovation initiatives set up by the previous government, kept others and is establishing its own.
The state’s chief scientist has been asked to report on how research and innovation can be “accelerated” in the state while the chief entrepreneur has been tasked with running various startup programs and continues to advise cabinet.
These startup programs include grants up to $500,000 to seed ventures, while the government is investing $1.5 million in the next three Southstart festivals held annually in Adelaide to connect the community.
The state government also supports the Stone and Chalk incubator at Lot Fourteen, one of seven innovation districts in the state.
Around 700 startups are also now being tracked on the government provided Dealroom platform in a bid to better connect the innovation community and track progress.
The startups initiatives are run out of the Office of the South Australian Chief Entrepreneur, currently Andrew Nunn.
“I’m coming to the end of my two and a bit year term, and it has been a great honour,” Mr Nunn told hundreds of founders and investors at the Southstart festival this week.
“I feel the ecosystem here is in a great space. It’s moving forward really well. We have a structure set up around it.”
Dr Close says big global industries like defence, space and biomedical are setting up a presence in South Australia, giving startups an opportunity to access larger programs and enterprises.
“When these big companies are spending money, it’s very easy for them to plug into smaller local companies. And the smaller local companies can see more clearly what projects are coming up that they might be able to be part of,” she said.
But with the local presence rarely including a head office, accessing the global giants can be a challenge for the smaller partner.
The state government funds several Industry Capability Networks to address this, Dr Close said.
“What we need to do is make sure that there’s every opportunity to grow new businesses but also to help existing small businesses become larger,” she told InnovationAus.com
“That’s because we just don’t have a whole lot of head offices or big corporate based in South Australia.”
Long term, the government needs to develop the skills to sustain a more complex economy.
It has committed $208 million to build five technical colleges – three in metropolitan Adelaide and two in regional South Australia.
The colleges will provide an “alternative senior secondary option” that trains students in areas of high demand.
Dr Close also points to a merger of the two main universities and the current state Royal Commission into Early Childhood Education and School as other significant changes — possible precursors to better research outcomes and children entering the education system even earlier, respectively.
“We recognise Australia has massively under invested in the early years. Most parts of the OECD do preschool for two years, we only do it for one in Australia. And it comes at a cost,” she said.
“Even though that seems like it’s a long way away from having a complex economy right now. It’s actually all part of putting in all the building blocks [now].”
The state government is also mulling wider changes like a “green industry policy” to take advantage of the high level of existing renewable energy in the state and planned hydrogen expansion.
“That’s another important piece because that facilitates more investment in complex manufacturing, if it’s carbon ready for this century’s demands.”
Dr Close on Wednesday opened the Southstart festival, an event that marks an even more fundamental requirement; getting innovators together.
“It is so encouraging to see people who are trying to solve new problems with new answers. Whether it’s through product or service, and through doing things differently.
“I’m really excited that South Australia gets to host such an important event. I expect lots of good things to come out of people spending time together.”
Joseph Brookes travelled to Southstart as a guest of the event.
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