Home » Laundy » Speeches » Opening keynote address at the UNSW 2016 Innovation Summit

Opening keynote address at the UNSW 2016 Innovation Summit

University of New South Wales Sydney

25 November 2016

[Check against delivery]

It’s my great pleasure to deliver the opening keynote address at this year’s UNSW Innovation Summit and I thank you for the opportunity.

Can I say how pleased I always am to be back here—a place that had a powerful formative influence on my worldview and intellectual development.

When I enrolled here as a student, Australia’s telecommunication landscape was on the cusp of a massive transformation.

Our nation’s first permanent internet access was being rolled out to universities[1] and its geographical isolation was diminishing rapidly with the advent of PCs and mobile phones that brought the world to our fingertips.

It was an exciting time of technological marvel and change for many of us, but by the turn of the century, much of the innovation I experienced here on this campus had become obsolete.

New and improved cyber-technology was allowing Australians to study, work, shop, socialise and entertain themselves with the click of a button.

The cyber-revolution was also producing a new breed of innovators and entrepreneurs in Australia, with fellow alumni Mike Cannon-Brookes and Scott Farquhar being great examples.

As you will know, these two UNSW alumni founded their software startup, Atlassian, in 2002 while they were completing their studies here.

A little over a decade later, the company became the most successful listing of an Australian company in the US, after floating on the Nasdaq stock exchange and securing a coveted market value of $8 billion.

Today, Atlassian employs over a 1000 people and counts big names like Twitter, Verizon and NASA among its clients. The two young entrepreneurs continue to invest in other startups. [2]

Atlassian is just one example of the power of innovation to foster entrepreneurship, boost investment, spawn businesses and create jobs.

With examples like this, it makes good economic sense to place innovation at the centre of the Australian Government’s industry and economic policy.

My topic for today is the Government’s vision for Innovation in Australia.

I’ll look at the challenges and opportunities of our innovation system and outline the work we’re doing to foster a culture of innovation and entrepreneurship through the National Innovation and Science Agenda.

The productivity challenge

But first let’s look at the Australian economy: we have much to be proud of.

Our nation is in the enviable position of having enjoyed more than 25 years of uninterrupted economic growth.

But while GDP has continued to grow steadily, Australia’s productivity has been flat for the last eight years.

Average annual multifactor productivity growth over the five years to 2014 was negative and worse than a number of advanced economies.

This is a cause for concern because productivity growth is essential to securing our future prosperity and our living standards.

As Paul Krugman, a Nobel Prize Laureate in Economics, once wrote:

Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker. [3]

So, how do we turn things around? How do we ensure productivity growth in Australia?

The evidence points strongly to innovation. Innovation is a major driving force for productivity growth and a catalyst for economic prosperity.

And I’m not talking only about innovation by tech startups; innovation is also about established businesses doing things better to stay competitive.

Indeed, innovation matters to all Australians because it is about job creation and new and improved opportunities to do business.

The OECD estimates that as much as 50 per cent of economic growth in its member countries can be attributed to innovation activity.

The evidence suggests Australian businesses that have embraced innovation are doing better than those that haven’t.

Australia’s innovation system

If innovation is so important, how does Australia’s innovation system measure up against international standards?

Australia has a proud history of innovation—a proud record of harnessing our ingenuity to create opportunity and prosperity.

We have our name permanently etched in world-changing innovations such as the high-yielding ‘Federation’ strain of wheat, penicillin, cochlear implants, Gardasil, Wi-Fi and many more.

But we have more work to do to build on our achievements.

Australia’s current innovation performance is mixed: we rank 19th out of 128 countries on the 2016 Global Innovation Index—the GII.

This is well behind world innovation leaders like Switzerland, Sweden, the UK, the US, Finland and Singapore.

We perform very well in some areas, like the quality of research, but this is hardly surprising.

We have world-class research agencies like CSIRO and universities like the Group of Eight, including UNSW, that conduct year-round leading-edge research.

The Global Innovation Index 2016 ranks Australia 11th out of 141 economies on innovation inputs, including human capital and research.

However, Australia performs poorly in collaborative innovation measures and in translating publicly funded research into commercial outcomes.

The GII Innovation Efficiency Ratio also shows our performance in commercialising good ideas declined between 2010 and 2016.

This takes Australia’s ranking among OECD countries down from 22nd in 2010 to 31st in 2016.

Low levels of collaboration between businesses and researchers are a major reason Australia is not doing so well in research translation.

Australian businesses have the lowest levels of industry and research sector collaboration in the OECD.

We are ranked last out of 27 countries for both SMEs and large firms, according to the most recent data. But it is not all doom and gloom.

Many research institutions and businesses have been working to lift their game—and I’d like to applaud UNSW for your efforts in this.

I know many of your faculties have established Faculty Advisory Councils to provide links to industry and ensure your research is industry relevant [4].

Business is also recognising the benefits of such links.

For example, Boeing Australia recently announced plans to embed 30 of its staff at the University of Queensland St Lucia campus. [5]

This collaboration will enable research projects ranging from cabin disease transmission to bioterrorism countermeasures and unmanned aircraft.

National Innovation and Science Agenda

Businesses are ultimately responsible for their own success and must take the initiative to pursue the innovation path that will help them stay competitive, but there is a role for government.

And that is to create a favourable environment in which business can grow and succeed through measures such as red tape reduction and tax reform.

Policy that helps create a strong innovation ecosystem is also very important, given the benefits of innovation for productivity growth.

That is what the National Innovation and Science Agenda is about.

We’re a little over a week out from the first anniversary of the agenda.

And I dare say in just one year, there has been greater awareness about innovation within the Australian community than in any other period.

I’m sure you’ve gone through the document with a fine-tooth comb, so I’m not going to outline its details, including its $1.1 million worth of measures.

In a nutshell, the agenda seeks to:

  • foster a culture of innovation and entrepreneurship
  • boost industry-to-research collaboration
  • develop and attract world-class talent and skills, and
  • ensure government leads by example.

We’ve made clear our vision for pursuing this agenda.

We want to make Australia a leading innovation nation.

We want to encourage Australians to embrace risk, pursue ideas and learn from mistakes, and get investors to back these ideas.

And we want to derive greater benefits from publicly-funded research.

We know science and research is integral to a high-performing innovation system, that’s why we’ve allocated more than half of the agenda’s $1.1 billion funding to supporting science.

It also explains why we’ve committed $2.3 billion over 10 years to supporting research infrastructure.

First wave

The first wave of measures to support our plan is already in train.

New tax arrangements to encourage investment in startups and early-stage venture capital partnerships came into force in July.

So are measures to support greater private sector investment in commercialising research by our research institutions and universities.

The Government’s $25 million investment in the Centre of Excellence for Quantum Computation & Communication Technology has given UNSW a head start in the race to build the world’s first quantum computer.

I’m pleased Telstra and Commonwealth Bank have also thrown their support behind this world-leading research with $10 million each.

In August, Minister Hunt launched the Biomedical Translation Fund, a $500 million for-profit venture capital fund.

The fund targets investments in companies with projects at advanced pre-clinical and Phase I and Phase II stages of development.

The Government is committed to helping Australian businesses, entrepreneurs and institutions compete at the international level.

I’m encouraged by UNSW’s aspiration over the next decade to become Australia's global university—a global leader in research and innovation.

In an increasingly globalised world, we can’t afford to be complacent.

We need to be able to think quickly, solve problems, and have new ideas—I think the UNSW slogan, Never Stand Still, encapsulates this.

Many initiatives under our innovation agenda are directly targeted at enhancing Australia’s global competitiveness through innovation.

The Government is increasing links with key economies to enable Australia to improve research, commercialisation and business performance, and access global supply chains and the global market.

Our $36 million Global Innovation Strategy is supporting businesses and researchers to collaborate with their global counterparts on research.

Australian landing pads are already operating in San Francisco, Tel Aviv, Shanghai, Singapore and Berlin as part of this strategy.

They’re helping our startups get immersed in an environment that will hasten the design and development of their product or business model.

Businesses and researchers are also able to apply for various grants under the Global Innovation Linkages programme and Global Connections Fund to help them collaborate with international partners.

Through these collaborations, Australia can improve its entrepreneurial and research performance, develop and commercialise new products, processes and ideas, and gain global competitive advantage.

Last week the Government announced grants totalling $7.6 million to help 22 Australian businesses that had developed innovative new products but needed financial support and expert advice to commercialise their ideas.

The grants, provided under the Entrepreneurs' Programme, will support projects for innovations ranging from 3D ‘laser eyes’ for self-driving cars to solar-powered refrigeration equipment designed for use in remote areas.

Future waves

The Government has an ongoing commitment to innovation. We will be pursuing further waves of the National Innovation and Science Agenda.

The second wave will focus on encouraging private sector investment in businesses with growth potential, driving productivity through digital transformation, and investing in our science and research infrastructure.

The third wave will make it easier for business to interact with government by reducing regulation and help industry sectors move into the future with the help of a long-term science and innovation plan.

I have a business background and I know firsthand the impact of red tape on business and can’t wait to see more regulation reform and measures to simplify processes for dealing with government.

Conclusion

A culture of innovation is critical to Australia’s competitiveness and economic prosperity and we must strengthen our innovation system to support a strong innovation culture.

The leading-edge research undertaken here and in other Australian universities and research institutions is vital for our innovation system.

We can strengthen the system further if our researchers and industry work more closely together to take more of our research findings out of the laboratory to market.

This is what our economy needs in an era where knowledge and innovation are the main sources of competitive advantage.

We need to make sure Australia can maximise the benefits that technological disruption and 21st-century innovation have to offer.

I know we can do it. Australia has gone through similar transitions and seized the opportunity.

Here in NSW there are echoes of the past and inspirations for the future.

The latter part of the 19th century was a time of significant transformation in the NSW economy.

Technological disruption was helping the economy transition from its pastoral base to secondary and commercial industries.

It was the dawn of the industrial age. Steam power, iron, steel, electricity and other innovations had become a means to prosperity.

NSW needed new technical skills to seize these opportunities [6]. And what did they do?

The state’s engineers, builders, architects, manufacturers and surveyors led the way in establishing a system of technical education, resulting in the founding of Sydney Technical College, a precursor to UNSW[7].

The rest, as they say, is history.

Today, we have a great opportunity—government, universities, industry—to work together to seize the opportunities that the digital age has to offer.

We have a wonderful opportunity to help realise the Government’s vision of making Australia a leading innovation nation and secure its future economic prosperity through innovation.

[ENDS]

References

[1]Clarke, R (2004) “Origins and Nature of the Internet in Australia” http://www.rogerclarke.com/II/OzI04.html Wikipedia “Internet in Australia” https://en.wikipedia.org/wiki/Internet_in_Australia

[2] ABC News ‘Atlassian: Sydney-based tech firm becomes most successful Australian listing on US stock exchange’, Dec 2015 http://www.abc.net.au/news/2015-12-11/atlassian's-debut-most-successful-australian-listing-in-us/7021072

[3] Krugman, P (1994) The Age of Diminishing Expectations MIT Press

[4] UNSW Faculty Advisory Councils, https://www.unsw.edu.au/about-us/the-university/faculty-advisory-councils

[5] UQ News Sept 2016 ‘Boeing partnership to give UQ students and researchers new altitude’ https://www.uq.edu.au/news/article/2016/09/boeing-partnership-give-uq-students-and-researchers-new-altitude

[6] Freyne, C (2010) ‘Sydney Technical College’ in Dictionary of Sydney http://dictionaryofsydney.org/entry/sydney_technical_college

[7] Davis, G. (2016) “The Australian idea of a university” in The Conversation https://theconversation.com/the-australian-idea-of-a-university-17433