Economic sus­tain­ab­il­ity is crucial to Australia’s future. Australia must cap­it­al­ise upon current eco­nomic prosper­ity to secure long-term sus­tain­ab­il­ity. Around 50% of Australia’s exports are of natural resources, which accounts for a con­sid­er­able pro­por­tion of current eco­nomic growth [1]. The finite nature of these resources neces­sit­ates diver­si­fic­a­tion of our economy, which must be achieved through innovation.

Innovation has a sig­ni­fic­ant influ­ence upon eco­nomic growth – a recent OECD report estim­ated that this influ­ence was as much as 50% in developed nations [2].  Innovation will foster eco­nomic growth and provide prac­tical solu­tions to press­ing prob­lems, such as declin­ing pro­ductiv­ity growth [3]. Moreover, it facil­it­ates the main­ten­ance of global com­pet­it­ive­ness – some­thing that is par­tic­u­larly rel­ev­ant to Australia, con­sid­er­ing the strong per­form­ance of regional neigh­bours (such as China and India). This is a par­tic­u­lar chal­lenge for Australia as recent inter­na­tional results indic­ate the country is ranked 60% below the OECD average on various innov­a­tion indic­at­ors [4]. The 2011 INSEAD Global Innovation Index, which ranks coun­tries based on their envir­on­ments for innov­a­tion and the innov­a­tion that occurs, ranked Australia 21^st, notably behind key trading part­ners such as the USA (7^th), New Zealand (15^th) and Japan (20^th) [5].

Advances in innov­a­tion require col­lab­or­a­tion between the Government, busi­ness and research insti­tu­tions. It is sug­ges­ted that fos­ter­ing col­lab­or­a­tion in Australia will increase the country’s GDP sig­ni­fic­antly by as much as $45 billion annu­ally, by encour­aging pro­ductiv­ity [6]. Increasing the level of innov­a­tion in Australia is a complex task that has no simple solu­tion. However, cre­at­ing and fos­ter­ing a col­lab­or­at­ive envir­on­ment is a major step in the dir­ec­tion of a com­pet­it­ive and innov­at­ive Australian economy. Research insti­tu­tions provide oppor­tun­it­ies for tech­no­lo­gical innov­a­tions that can be imple­men­ted or com­mer­cial­ised in a busi­ness envir­on­ment. As under­stand­ings of innov­at­ive prac­tices vary amongst indi­vidu­als and indus­tries, col­lab­or­at­ive ven­tures will ensure that the pool of know­ledge is util­ised effect­ively, improv­ing pro­ductiv­ity and thus eco­nomic growth. Ground break­ing innov­a­tion requires sus­tained commitment.

This policy paper recom­mends that the Australian Government adopt two meas­ures to strengthen innov­a­tion in Australia: a voucher-style research funding scheme and a “Complete Package Funding” system that would encour­age the estab­lish­ment of Specialisation Hubs within uni­ver­sit­ies. This report exem­pli­fies the import­ance of improv­ing col­lab­or­a­tion between busi­nesses and research insti­tu­tions in order to create and foster a col­lab­or­at­ive envir­on­ment. This is a key step in the dir­ec­tion of a com­pet­it­ive and innov­at­ive Australian research market.

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[1] “About Australia”, Department of Foreign Affairs & Trade, accessed 19 November 2011, http://​www​.dfat​.gov​.au/​f​a​c​t​s​/​r​e​s​o​u​r​c​e​s​_​s​e​c​t​o​r.html.
[2] “ACCI Stands For: Policies that Foster and Reward Innovation”, Australian Chamber of Commerce & Industry, accessed 10 November 2011, http: //www.acci.asn.au/Our-Agenda/The-Economy/Innovation.
[3] Saul Eslake & Marcus Walsh, Australia’s Productivity Challenge (Melbourne: Grattan Institute, 2011), 31.
[4] Victorian Government, National Innovation Agenda Proposal (Melbourne: 2007), 6.
[5] “Global Innovation Index 2011”, INSEAD, accessed 10 November 2011, http://​www​.glob​alin​nov​a​tionin​dex​.org/​g​i​i​/​m​a​i​n​/​a​n​a​l​y​s​i​s​/​r​a​n​k​i​n​gs.cfm.
[6] Victorian Government, National Innovation Agenda Proposal, 6.

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