Innovation should be celebrated not hidden as an elephant in the room



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Bill Ferris was appointed as Chair of the Innovation and Science Australia Board in November 2015. He has been the Executive Chairman of CHAMP Private Equity since its formation in 2000, and of its predecessor, Australian Mezzanine Investments Pty Ltd (AMIL), which he co-founded in 1987 with Joseph Skrzynski. Mr Ferris is a 45-year veteran of private equity in Australasia, founding Australia’s first venture capital firm in 1970. 

Following his speech to a CEDA event in December 2017, Bill Ferris provides insights into the National Innovation 2030 Strategic Plan.

In 2017, Australians became world record holders thanks to our 26 years of continuous economic growth. Much of this growth was underpinned by two of Australia’s traditional big export sectors: agriculture and mining.

Although a significant natural resources endowment provided the foundations to build on, it was extraordinary innovation, risk-taking and export success that led farmers and miners to their world-leading positions.
Looking towards 2030, innovation will be increasingly important to the expansion of Australia’s economy, to keeping its workforce strong, and to addressing social challenges.

Increasing innovation will lift productivity, which drives GDP growth and, ultimately, better living standards. Australia needs to increase productivity as neither the terms of trade nor labour force growth will provide the sort of growth in national income experienced during our recent history. As our ageing population retires, we will face a shortage of skilled workers by 2030. Technology could be key to filling any labour gaps.

More innovation will also help create jobs, as fast-growing companies that innovate, export and scale are responsible for virtually all new net jobs in the economy. As jobs and skills change, we will need an education system that adequately prepares students and workers with the knowledge and skills relevant throughout their lifetimes and that allows them to adopt them.

Innovation will also change Australians’ lives for the better. Advances in technology – from genomics, to data analytics and materials science – will enable breakthrough discoveries in areas such as personalised health care for cancer treatments.

To capture these benefits, Australia needs to accelerate innovation now. Australia is in a $1.6 trillion global innovation race, where the prize at stake is a bigger share of global wealth, better jobs, and the best access to the products of innovation, such as new health treatments. Australia has entered the race from a good position due to our strong economy and established research strengths, but we lag our competitor nations in the amount we invest in innovation, and in the level of our ambition. We need to accelerate our pace to catch the leaders of the innovation pack, or risk falling further behind.

Recognising Australia’s innovation imperative, the Australian Government launched the National Innovation and Science Agenda (NISA) in 2015. It provided an immediate boost to Australia’s innovation capabilities, and created a long-term strategic investment framework by establishing Innovation and Science Australia (ISA) as an independent and expert board. ISA was tasked with developing a strategic plan to accelerate innovation in Australia by 2030.

The Australia 2030 Strategic Plan, which is expected to be released early in 2018, identifies five imperatives for action by governments if Australia is to close the considerable gap in innovation performance between it and key competitor nations.

The first imperative is education, because Australia will only achieve the prosperity envisaged in the plan if we equip our kids and workers with skills relevant to the jobs of 2030. The plan sets out key actions to update approaches in the school and vocational and educational training systems to adapt to the demands of the 2030 workplace.

The second imperative is industry, where the plan seeks to ensure Australia’s ongoing prosperity by stimulating high-growth firms and improving productivity. Australian business is well below the Business Expenditure on Research and Development (BERD) of our competitor nations. BERD reached a high point of 1.3 per cent of GDP in 2008, but fell to one per cent in 2016. This is at odds with the trend in other leading nations, where the amount and rate of business investment in research is increasing. The plan calls for a reversal of this downward trend in BERD with a target increase to not less than 1.7 per cent of GDP by 2030. The plan also seeks to increase exporting activity by high growth SMEs, as exports are a strong proxy for innovative and competitive activities.

The third imperative is to ensure government plays a critical multiplier role via innovative behaviour in procurement, service delivery, access to data, regulation and policy development and delivery. The plan includes recommendations for how Australian governments can catalyse more innovation by expanding access for SME participation in government procurement and by enabling better access to government data assets.

The fourth imperative is Research and Development. Australia is world-class at knowledge creation. ISA’s ambition is for Australia to also become world-class at research translation and commercialisation. We can do this by improving collaboration among research organisations and business, via improvement to the RDTI program, additional targeted funding for translational research activities, and by investing in research infrastructure.
 
The final imperative is culture. The plan’s vision is to create a national culture that celebrates innovation. The catalyst for this shift would be a program of National Missions to solve large-scale challenges that foster pride in the excellence of Australian science and innovation and inspire and motivate a new generation of Australian innovators.
 
The Australia 2030 Plan is the opportunity to re-invigorate national momentum for innovation. By doing so, Australia can be a top-tier nation for innovation and science by 2030, creating new growth and jobs and making us a healthier and happier nation.

The 2030 Strategic Plan is expected to be released by the end of January.

Watch Mr Ferris' address to CEDA's Insights into the National Innovation 2030 Strategic Plan event in Sydney on 8 December 2017.
 


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