R&D and business in Australia

Thermal coal went from $26 / ton at the beginning of 2003 to a peak of $193 / ton in mid 2008. It is now down to $74 / ton. Again the fundamentals do not look good.

Right now we'd be in real trouble if the falling Australian dollar had not acted as a shock absorber.

I would never claim to be able to forecast commodity prices but staking our whole future on volatile mineral prices does not seem to be a good bet. Having a depreciating currency will eventually catch up with us in the form of higher prices for the commodities and intellectual property we need to import.

In many countries, including Canada, investment in intangible assets, especially R & D, seems set to overtake investment in physical plant and equipment.

Bottom line. When it comes to innovation we need to up our game.

How is this to be achieved?

I have no easy answers but taking $100 mn from the CSIRO and spending a quarter of a billion on school chaplains is probably not a step in the right direction.

But, while more government spending on R & D is needed the bigger problem is to foster a culture of innovation and invention in Australian business. Here I think we can learn from Canada, Israel and South Korea.

In 1950 the economist John Maynard Keynes reportedly said that better than Marshall Aid would be for the US Air Force to bomb all British businesses at a time when only the directors were present. (As reported by Tony Judt in "Postwar"). Maybe it will take something like that to change the culture of Australian business.