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In Australia,
innovation policy has often been sidelined and removed from
the core of economic policy, despite efforts by governments
to increase research and development (R&D) and encourage
innovation. Investment in R&D and innovation, along with
other indicators of innovative capacity, has not kept pace with
annual Gross Domestic Product (GDP) growth and has fallen well
behind the Organisation for Economic Co-operation and Development
(OECD)
average.
Econometric work by Professor
Joshua Gans and Richard Hayes
on Australia’s
innovative capacity reinforces the systemic weaknesses in
Australia’s
innovation system highlighted by the OECD’s 2006 report, Economic Policy
Reforms: Going for Growth. These weaknesses include
the low rate of commercialisation of university research and
inadequate industry–science linkages. Australia
ranks fifteenth in the 2005 innovation index based on low spending
on R&D as a percentage of the nation’s GDP,
the low proportion of R&D personnel as a percentage of population,
and the low percentage of R&D funded by industry.
These reports suggest that Australia’s
science, technology and innovation policy is in need of a new
direction, increased investment in the development and commercialisation
of innovation, and a shift in the focus on the key drivers of
growth. Gans and Hayes recommended several policies to improve
Australia’s
R&D performance, including:
- ensuring Australia
has a world-class pool of trained innovators
- providing incentives and opportunities for the deployment
of risk capital
- enhancing Australia’s
university system to meet the science and technology requirements
of emerging sectors, and
- encouraging collaborative research between institutions
and industry.
In order to improve innovative capacity in
the medium and long term, it is necessary to strengthen incentives
in knowledge and to attract risk capital. However, increasing
investment in innovation is not an end in itself. Policies need
to address the systemic weaknesses that the OECD has identified
in the innovation system, in addition to streamlining mechanisms
for supporting innovation and opening new opportunities for
Australian industry and science.
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