Tony Peacock, CRCA CEO

Australian Innovation System under the microscope

Innovation and Science Australia, the new body created in last December’s National Innovation and Science Agenda, has not sat idle during the election period. The Office of Innovation and Science Australia wound up a series of strategic workshops in Canberra yesterday, developing a 15-year Strategic Plan for Australia’s innovation sector. The plan will develop over the next year and will be a vitally important guiding document in setting direction to 2030.

As is the case with many workshops, the facilitator asked each participant to make an opening observation, and mine surprised the person next to me. I was surprised at her surprise. It was basically that even the depiction in graphics of innovation as a linear process that moves from knowledge creation to knowledge transfer through to knowledge application can be fraught. It can over emphasise the expectations on universities in our innovation system. Our system is relatively highly reliant on universities already and we have to be very careful not to expect them keep doing more and more. The primary role of universities is to teach and their biggest impact in the innovation system is to develop talent. All universities also conduct research, but in Australia, we rely on university research much more heavily than most countries.

To illustrate, I’ve pulled out the OECD figures on who performed R&D in four countries in 2013 (the latest year with information for Australia, the USA, Germany and Israel). I chose these particular countries because we often hear comparisons between their systems and ours. Relative to other countries, Australia is roughly twice as reliant on universities to perform our total national research effort. Business in Australia performs relatively less research than business in the other countries but it is important when framing strategic directions to remember that in Australia, businesses still do double the research of our universities. Business is absolutely not sitting at the end of a knowledge generation process waiting to be fed.

This is not at all a criticism of universities. Australian universities are an unmitigated success. They do a brilliant job of teaching Australian and international students at both undergraduate and graduate levels. They do brilliant research. There is no doubt they can do better at engaging with industry, but most have lifted very significantly in that space already. How much more can we genuinely expect? Many universities are expressing concerns that they are cross-subsidising research with teaching dollars already (a fraught argument itself because students are attracted to high reputation universities, who largely drive reputation through their research profile…). But they are probably leveraged about as far as possible.

Surely the key strategic issue in the Australian innovation system is to drive more business innovation? Relative to the rest of the world, our businesses do less research, but they are still the largest part of the innovation system as a whole. We need to think of business as the main player it is in performing R&D and how we can encourage yet more business research to enhance national prosperity. The people at the Office of Innovation and Science Australia are on to it and they acknowledge that there is “no simple way to fully describe its (the Innovation System’s) components or dynamics”. Perhaps that’s because in many ways it is not a “system” at all, which makes the task of strategic planning that much more difficult. It is certainly a task worth supporting.