INNOVATION DEMANDS NATIONAL ACTION The Shadow Minister for Innovation, Technology and the Future of Work calls for a rethink on public spending, in which government is the first buyer for Australian innovations. By the Hon Clare O’Neil MP
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nnovation is like exercise. It hurts when you start, but the more you do, the easier it gets. And, it’s absolutely essential for our country’s economic health. Right now, the Australian economy is barely exercising its innovation muscles. We’re relying too much on what we dig out of the ground and grow; we’ve become too reliant on a narrow range of exports to a narrow range of countries; and we’re not gaining enough national wealth from inventions or innovations. And these failings are hurting us far more than the aches and pains of reform. These economic problems are reflected on the flip side of the coin: the labour market. Wages have been stagnant for a decade. Casualisation and underemployment are rife. We’ve become too reliant on population growth for economic growth and we’ve become addicted to property speculation. As a nation, we’re paying a lucky few Australians enormous amounts to produce things of questionable value, and some of the people who do the most important work in the country barely earn enough to live on. If we want to leave our children a prosperous, sustainable, egalitarian country, we need to change how we’re doing things. Take the Research and Development Tax Incentive (RDTI). The RDTI is the principal policy the Australian Government uses to support new ideas and innovations in the economy. According to Treasury, around 13,000 companies are registered for the RDTI. The trouble is that we don’t know much about what those 13,000 companies are researching and developing. We don’t know whether it is in line with the strategic priorities of the national economy. We don’t know the cost-benefit analysis of the tax offsets. We don’t
know whether the RDTI is value for money or a waste of money. We just don’t know. Australia cannot afford to continue with such a passive approach to innovation. Globally, best-practice economies are proactive. They acknowledge that countries like Australia – with just 0.25% of the world’s population – are not going to be the best at everything. Best-practice economies are driving innovation by focusing policy and spending on a handful of national research and innovation priorities in areas of comparative advantage. Some are setting priorities through developing national missions – an approach advocated by economist Mariana Mazucatto. Under the Mazucatto approach, countries are prioritising their most important challenges – then focusing on policies, programs and investments that are in line with those priorities.
The lack of willingness to put innovation at the centre of public policy is hamstringing our economic future Australia is doing the opposite – letting a thousand flowers bloom. And our level of investment is going in the wrong direction. In the 2019 financial year, Canberra spent just $5.5 million of the Research Infrastructure Investment Plan – and
Australia’s Nobel Laureates VOL III
