Innovation drives growth

Another striking example is Wikipedia, the online encyclopedia that now rivals Britannica as a global reference point. Millions of us use Wikipedia, but nobody owns it in the formal sense, and its value depends on free contributions from thousands of experts, enthusiasts and amateur contributors.

The Yale law professor, Yochai Benkler, in an important new book, Wealth of Networks, argues that this kind of production goes far beyond exciting new web applications in its significance for society.

He suggests that activities in which large groups of peers draw on "commons" - shared resources which everybody can access and from which everyone can benefit - represent a growing sector of the economy, in which non-market production can feed the long-term prosperity of market economies and give people greater freedom in their own lives.

So what role might government have in all this? The lesson is that many of the solutions will start as small-scale, everyday practices and then grow.

Government's ability to invest in new capabilities, new partnerships and new ways of organising is just as important as the power of government to direct, resource, and control key areas of our lives.

But it is worth remembering that Australia's century of success has rested on a broader cluster of institutions often taken for granted - post offices and public houses, limited companies and trade unions, libraries and credit unions, universities and parks.

If we look with fresh eyes, we may find solutions to the big challenges are staring us in the face.