Innovation: practice makes perfect

Australia’s business leaders also publicly acknowledge the importance of innovation and have called for the establishment of a National Innovation Framework “built upon a clarification of roles and responsibilities, strong collaboration and strategic action between government, the research sector, business and our schools and universities” (“New Pathways To Prosperity. A National Innovation Framework for Australia”).

This is good and necessary, and it is encouraging to see business leaders and politicians recognising the fundamental importance of innovation and entrepreneurship.

Universities have also become much more “innovation conscious” in recent years and are now recognised as being a crucial part of the national innovation system. Australia’s areas of strength (PDF 564KB) flowing from university research include the medical and health sciences, the biological sciences, atmospheric sciences, astronomy, biotechnology, chemistry, clinical sciences, engineering, immunology, metallurgy and veterinary sciences.

Universities are critical for driving innovation, and we see China, India and Singapore sinking vast sums of money into their own higher education systems. And most readers will be familiar with the vastly important contribution that universities such as Stanford and MIT make to the United States.

So we’re getting a lot of stuff right but we’re still missing something - something so vital that all the good policy in the world will not make a difference. As we noted earlier, Australia needs to build a culture of innovation and enterprise from the ground up, as well as from the top down. Much has been done to bolster the top end, very little at the grass roots. Good policy must be maintained, but we now have to focus on the way we “do” innovation and entrepreneurship - to privilege practice over policy.

For example, to date our education system has been focused on producing people with a “good employee” mentality. This made sense while large bureaucracies and industries provided stable employment in which a person might remain in the same job from leaving school to retirement. Lifetime employment is fast disappearing, forcing students to take more responsibility for their own careers. That means being accountable for making changes, adapting to new roles. They are thirsting to learn new skills and principles.

Our education system must wake up to this demand. Universities have been slow to catch on to the global economic changes. The more pioneering are making available new courses on how to start a business, but these are far from standard particularly the arts and humanities.

Australian educators need to encourage the innovative and the entrepreneurial, helping to breed the enterprising spirit and to teach the skills of starting a business. India is enlivened with the spirit of enterprise, as increasingly is China. These countries pursue new business opportunities with vigour. We have to do the same.

We need to understand the deleterious impact of onshore multinational corporations and take steps to obviate their baleful effect. They are incomplete companies, possessing no development or manufacturing components. They focus on sales, marketing and distribution with the important decisions being taken offshore, perhaps in London, Seattle, or Chicago. They simply localise products manufactured elsewhere.

While this is inevitable in a globalised economy, and acknowledging they provide good jobs for many people, it has to be understood they are a drain on home grown innovation. Young, enthusiastic innovators should be encouraged to set up their own businesses through hubs and networks similar to those in Silicon Valley.

Australians are sophisticated users of IT but we’re not that good at making it or even understanding it. Back in 1985 an OECD Examiners' Report said: “We were struck by what seemed to be a widespread Australian view of technology as in some sense external to national life.” Things haven’t changed much since then.

This matters because if we continue to adopt and adapt other countries’ developments then we condemn ourselves to continuing “branch office” status. We also make less informed decisions about our national laboratories such as CSIRO and DSTO. Such less informed thinking led to the closing down of Telecom research laboratories some years ago, to the detriment of our national research capacity.