Australasian Science: Australia's authority on science since 1938

Boosting Our Innovation Dividend

By Vaughan Beck

It’s time for urgent action to drive productivity and prosperity.

Australia needs to take some substantial steps to boost our national prosperity through innovation. We need to:

• make innovation more attractive;

• change the incentives for Australia’s world-class researchers;

• improve our innovation skills; and

• focus on information and communication technologies (ICT) as the innovation enabler.

None of this will be easy, but not doing it is not an option.

Innovation is about risk-taking and driving new and improved products and services through to the marketplace. The more we do, the better we get.

To Make Innovation More Attractive
We need to foster an innovative management culture and provide financial incentives to encourage companies to be innovative and lift productivity through the application of new technologies. Further government action is required – including training and fostering innovation through government procurement policies.

We need “braver” processes than those currently in place, under which small companies would receive unmatched non-refundable grants for proof-of-concept work, potentially along the lines of the US Small Business Innovation Research scheme.

Specific actions would be:

• extending the R&D tax incentive to cover productivity improvements through the deployment of new technology;

• accelerated depreciation on investments to bring new-to-the-market products into service;

• incentives to encourage superannuation funds to invest in innovation; and

• policies that provide assurance to industry and public sector research organisations (PSROs) irrespective of the electoral cycle.

To Give More Incentives to Australia’s World-Class Researchers
We need a new and complementary measure of research quality that recognises and rewards activities that lead to increased innovation by adopting the inventive output of PSROs. We need to focus on measuring research impact to enhance innovation. Such a scheme could be called Excellence in Innovation for Australia (EIA).

Australia has a strong focus on measuring readily quantifiable parameters, as in the Excellence in Research Australia (ERA) initiative. The ERA, which is focused on research quality, is dominated by academic publications. It has become the prime determiner of university status and likely future funding, and the driver for academic recognition and appointments.

Australia excels with academic publications on any measure in terms of number and quality – proof that what gets measured gets done.

Collaboration should be incentivised, with the removal of tax disincentives preventing researchers from participating in the profits flowing from innovation. Universities, in particular, should be rewarded for fostering collaboration via mechanisms such as Third Stream funding – with this being a significant factor in staff assessment and promotion.

We need more use of intermediaries to facilitate linkage between industry and PSROs.

We need universal contracts for collaborative R&D between industry and PSROs.

We need the scope and budget of government R&D support programs to be extended and research resource allocation processes be made far more efficient and rapid.

We need to have funding for industry–PSRO partnerships similar to the UK’s Knowledge Transfer Partnerships.

To Improve Innovation Skills
We need to develop, in both public sector researchers and those in industry, a better understanding of the innovative process and the ability to collaborate to ensure that the results of inventive public sector research are fully captured. This collaboration should involve training periods in other organisations to foster relationships and understanding of goals.

To Focus on ICT as the Innovation Enabler
We need to heed the advice of Dr Robert Atkinson, President of the Information Technology and Innovation Foundation in Washington and a Member of the US Department of Commerce’s National Innovation and Competitiveness Strategy Advisory Board. At a recent ATSE seminar in Melbourne he noted that innovation powers productivity which, in turn, drives prosperity, and that Australia needs to tackle the tough issues:

• what the key ICT applications are for each sector and function;

• what the barriers to adoption and transformation are; and

• how public policies can spur e-transformation.

Dr Vaughan Beck FTSE is Executive Director – Technical with the Academy of Technological Sciences and Engineering, and led its campaign on innovation issues during 2011.