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Address to the Medical Technology Association of Australia 2016 Conference

Eveleigh NSW

27 September 2016

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Thank you for inviting me to your conference, Blueprint for a stronger Australian MedTech industry.

Your industry is a significant element of Australia’s economy, and one that plays an important role for our country.

At the outset I want to congratulate the MTAA for the work you are doing to ensure your industry continues to grow.

You maintain a very active programme of conferences, workshops, seminars and online courses and participate in many important committees and working groups to represent your industry and its many stakeholders.

I note that the audience today is made up of businesses of all sizes, from multinationals to small and medium enterprises.

Industry-led future

The message from the Australian Government for your sector is very much the same message for all elements of industry – the future is in your hands.

Future success will be driven by how well you respond to changing consumer needs and preferences and to the global marketplace.

I’ll talk about some of our initiatives to help you do this later.

These are all part of the Turnbull Government’s work to drive success by giving our most innovative businesses a hand up. You’ll notice that was a hand up, not a hand out.

And against that background I want to say that the Australian Government values the importance of the medical technologies and pharmaceuticals in the future mix of the national economy.

The health technologies sector generates $4.4 billion in gross economic value added representing 4.5 per cent of total national manufacturing gross value added and $4 billion dollars in annual exports. [1]

Total employment for the medical technology and pharmaceuticals sector sits at around 48,000, working in a vibrant eco system of start-ups and established companies.[2]

The future prospects for the sector look set to continue to grow, in 2005-06, health care costs were 9 percent of GDP and on present indications the proportion will have grown to 16 to 20 per cent by 2045.[3]

The nature of health care delivery is changing.

Digital delivery

Just as it is with so many other industries, digital health delivery is playing an increasing part in Australia’s large health industry and health services group.

Analysis by Frost & Sullivan estimates that the health care IT market was valued at $1.2 billion in 2015 and predicted to grow to $2.2 billion by 2020.[4]

Digital technology can help to reduce health care costs overall, but we need to ensure our investment in new technologies is done cost effectively.

Already Australia has a good record of innovation in the digital health area.

We are particularly good at patient monitoring systems which enable retirees to live comfortably and independently.

Australia’s need to provide health monitoring and services over a large, relatively unpopulated land mass has been the driver to developing digital health solutions. As always, necessity is the mother of innovation.

The preferences of many for ageing in the home and burgeoning costs in healthcare are also drivers for innovative medical devices and assistive technologies.

For example, Tunstall's Integrated Care Platform solution allows remote monitoring of a patient’s vital signs and health condition, enabling them to stay out of hospital and enhancing their quality of life and clinical outcomes.

Our expertise in the digital delivery field is already high and it means we have excellent opportunities when it comes to developing other world leading health technologies.

South Australia’s Signostics has developed the world’s smallest portable ultrasound system.

It shows how equipment developed for a local need can go global, because the devices are now being exported to numerous overseas markets, in particular to countries with a strong demand for in-home care, where doctors and nurses need portable diagnostic devices that are simple to use.

Making the most of the opportunities that are presented by the global digital economy is part of the Australian Government’s vision for a competitive and dynamic economy.

Globally competitive businesses will be those who can navigate the environment of economic change, and grasp the opportunities of digital technologies and disruption.

Transforming the economy

That brings me to the Australian Government’s National Innovation and Science Agenda.

Australia is in its 26th consecutive year of economic growth and has performed better than both the leading advanced economies and other resource intensive economies over the past 25 years.

Over that time success has come from capitalising on our strengths and seizing new opportunities.

Australia’s innovation system performs very well in areas like the quality of our science and research, the strength of our education system, and our favourable business environment.

We also do well on the “business environment” measure of the Global Innovation Index, especially in terms of the ease of starting a new business.

Innovative entrepreneurs create opportunities for themselves and others with startups adding 1.44 million full time equivalent jobs to the economy between 2006 and 2011[5].

But we’re not doing as well as we might because business and research are not working togetheranywhere near as much as there is the potential to.

And we fail too often when it comes to commercialising viable research.

Innovation is a major driving force for long-term productivity and economic growth. The OECD estimates that as much as 50 percent of economic growth can be attributed to innovation activity.[6]

Building innovation

The National Innovation and Science Agenda encourages all Australians to be more innovative and entrepreneurial.

It’s based on four principles: building our culture and capital, strengthening collaboration, encouraging skills and innovation talent, and the government leading as an exemplar.

The agenda is about creating a culture that backs good ideas and learns from taking risks and making mistakes. A culture that understands you can reduce those risks through collaboration.

We’re pushing forward with the agenda’s programs and initiatives that focus on research collaboration and commercialisation in particular for SMEs.

Our $500 million Biomedical Translation Fund will help address difficulties that arise from the often lengthy processes for commercialisation of medical research and innovation.

It’s based on recommendations of the Strategic Review of Health and Medical Research.

The fund will use experienced fund managers to draw in private sector investment to complement funding sourced from the Medical Research Future Fund’s capital contributions base.

And the $200 million CSIRO Innovation Fund supports the early stage commercialisation of innovations from CSIRO, universities and other publicly funded research bodies.

It will support co-investment in new spin-out and start-up companies formed by Australian research institutions and expand CSIRO’s Accelerator program to include other publicly funded research bodies.

We’re also amending insolvency laws. We want to strike a better balance between encouraging entrepreneurship and protecting creditors.

And we’re relaxing company tax laws around the ‘same business test’ to allow loss-making businesses to seek out new ways to become profitable

Industry Growth Centres

The agenda builds on initiatives like our $250 million Industry Growth Centres.

Your association’s Blueprint for the future complements the strategic objects of MTPConnect, the industry led medical technologies, biotechnologies and pharmaceuticals Growth Centre and the Advanced Manufacturing Growth Centre.

As you probably know, the growth centres are taking an industry-led approach to innovation, productivity and competitiveness in areas of competitive strength and strategic priority.

The centres will help Australia transition into smart, high value and export focused industries.

MTPConnect’s sector competitive plan focuses on matters like commercialisation, management and workforce skills, international market access and cutting the regulatory burden.

Its vision is to maximise the sector’s competitive advantage and establish Australia as an Asia Pacific hub for medical technology and pharmaceutical companies.

MTPConnect has hubs at the New Horizon complex at Monash University in Melbourne, the Institute of Biomedical Engineering and Technology at Sydney University, and the Medical Device Research Institute at Flinders University in Adelaide with the potential for more hubs as the centre grows. 

I want to commend MTAA for taking part in the consultations when the centre was established.

Similarly, the Advanced Manufacturing Growth Centre will develop an internationally competitive, thriving advanced manufacturing sector, by building links between business and the science and research sector.

It’s leveraging off Australia’s strong research base through collaboration hubs in 3D printing and advanced materials, and encouraging stronger collaboration with industry.

One of the centre’s two initial target sectors is the medical technologies subsector, in close collaboration with MTPConnect.

Entrepreneurs’ Programme

Finally, I am particularly proud of the Entrepreneurs’ Programme.

My background is in small business. It’s my home base in my electorate.

The Entrepreneurs’ Programme is our flagship initiative working on competitiveness and productivity in individual businesses.

The Medical Technologies and Pharmaceuticals sector is among the program’s five eligible growth sectors.

Since the program began over $16.5 million in funding has been awarded to the Medtech Pharma sector to assist businesses to:

  • implement improvements to their business capability

  • develop ideas with commercial potential; and

  • commercialise novel products, processes and services.

The program has 14 specialist Medtech Pharma advisers.

Services and grants are delivered through three elements: Business Management, Innovation Connections and Accelerating Commercialisation.

As one example, Matrix Surgical which manufactures tailor made surgical devices or sources other products to make life in the operating theatre easier and more efficient is one company that has benefited from the program.

Matrix worked with a business adviser to develop strategic, financial and market plans as well as to identify profit sources.

Personally, I would like to see our 14 Medtech Pharma advisers rushed off their feet.

Information about the Entrepreneurs’ Programme is available on the Australian Government’s business portal, business.gov.au

Conclusion

To conclude, the medical technologies and pharmaceutical sector is one in which Australia has historically played an important global part.

Australian researchers were at the table when penicillin was discovered.

Australian research gave the world the first pacemakers and the Cochlear implant.

The Australian Government has identified the sector as being one of six of our competitive strengths and strategic priorities, worthy of special attention at an industry level as well as an individual business level.

The blueprint that your association is working to shows great foresight and bodes well for the sector’s future.

Your conference has a huge agenda, I’m delighted to have had this opportunity to share the Government’s industry, innovation and science policy agenda with you.

(Ends)

References

[1] MTPConnect (2016), Medtech and Pharmaceutical 10-Year Sector Competitiveness

[2] MTPConnect (2016), Medtech and Pharmaceutical 10-Year Sector Competitiveness

[3] Department of Health (2008), National E-Health Strategy, prepared by Deloitte

[4] Frost and Sullivan (2016), Analysis of Healthcare IT spending in Australia

[5] Australian Innovation System Report 2015, p. 48

[6] OECD (2015) OECD Innovation Strategy 2015; An Agenda For Policy Action, Meeting of the OECD Council at Ministerial Level, Paris