4. The challenge going forward.(Australian business innovations)(Discussion)

The final session involved reporting back from the lunch table discussions, and pulling together the threads from the day, as well as the thinking from the previous forums.

Over lunch participants had been challenged to consider what might be the priorities for smart innovation strategies for Australia in a global economy. One lunch group looked at the challenges from a government perspective, the other from a business and community perspective. The business group placed priority on:

1. Developing better mechanisms for collaboration between large and small firms (including the role of academia) in open innovation models;

2. Emphasing human capital development, especially in emerging skills and capabilities for innovation, including design, systems integration, brokering and networking; and

3. Better articulating the place of innovation at the heart of corporate strategies.

The government and public sector group focused on:

1. Emphasising human capital development, especially in emerging skills and capabilities for innovation, including design, systems integration, brokering and networking.

2. Improving and better integrating data collection and pursuing more robust analysis as a precursor to more effective policy coordination; and

3. Striking a better balance between policies for knowledge production and technology invention, and policies for knowledge flow and technology diffusion and adoption.

The convenors ended proceedings by introducing a working statement, prepared with the assistance of the moderators from the lunch discussions, and Jason Potts and Kate Morrisson, which attempted to summarise the:

* areas of broad consensus;

* the challenges Australia faces;

* the leadership priorities; and

* open issues and matters for further attention.

(a) Areas of broad consensus

Innovation is the successful application of new ideas; 'it is change in practice', as Stan Metcalfe put it in Brisbane.

We should do more to celebrate our many innovation success stories, and build the confidence to be even more ambitious. We sometimes forget that our global competitiveness in resources and agriculture has ridden off the back of sustained innovation in these sectors.

Innovation is crucial for competitiveness across all parts of the economy. We now need to broaden and strengthen our innovative capacity to produce better jobs, new sources of national earnings, and more competitive positions in global markets.

Innovation is also the key to addressing major national challenges like climate change, chronic diseases, and for building sustainable communities. Only innovation will enhance our ability to address these pressing environmental, health and social problems. Therefore no subject could be more mainstream or a greater priority than innovation.

But it is widely agreed that we need stronger innovation leadership in Australia--in business, in government and public service delivery, and in research and educational institutions. This leadership challenged must be picked up everyone, but the agenda must be owned collectively. We need, therefore, a broadly based community of people and organisations actively promoting innovation in all areas of Australian life.

(b) The challenges Australia faces

The rest of the world is not standing still, and Australia needs to keep changing and adjusting to maintain our quality of life and to prosper. Innovation is what drives productive change. Therefore it is of the utmost importance that we gain the best possible understanding of the sources of innovation, and the processes by which we put knowledge and new ideas to work. We need to base our approaches on hard evidence and robust analysis, and be prepared to reassess conventional wisdom.

We do well to remember that Australia is a remote, relatively small economy, so we need to think carefully about how best to leverage our position in the world and participate in cross-border innovation flows and networks. We need to question whether a 'one size fits all' model for innovation policy drawn from a narrow interpretation of the 'US and northern hemisphere model' of innovation--as R&D + Intellectual Property Rights + Venture Capital--is the best approach for Australia. There is a strong case to re-assert the core roles of the university, especially its role in providing the 'public space' for thinking and knowledge exchange.

Australians need to understand the way the innovation challenge is changing, and the new human, technological and institutional infrastructure required. We need to appreciate the central importance of innovation in services as well as traditional industries, and the reliance all sectors of the economy have on technology.

(c) Leadership priorities

The over-arching priority emerging from the forum was the emphasis on human capital development, especially in growing capacity around emerging skills and capabilities for innovation. Many of these are basically problem solving skills, and include design, systems integration, brokering and networking. Skills development through on the job training and continual learning merits fresh attention.

Priorities identified for public adminsitration include the need to:

* collect better and more integrated data and conduct more robust analysis as a platform for public policy planning and co-ordination;

* strike a better balance between policies for knowledge production and technology invention, and policies for knowledge flow and technology diffusion and adoption;

* encourage governments to develop procurement policies that stimulate innovation, especially in small and medium sized enterprises;

* mitigate the effects of risk-shifting by governments;

* target the accelerated growth of existing firms, rather than new start-ups;

* coordinate Commonwealth, State and local roles in innovation, recognising the role of regional innovation systems in a national framework; and to

* implement 'sector-sensitive' innovation policies, recognising that the sources and nature of innovation vary considerably across sectors, but having regard to innovation driven from the points of intersection between sectors, industries and institutions.

Priorities for business include the need to:

* develop better mechanisms for collaboration between large and small firms, and between the private and public sectors, in open innovation models;

* better articulate the place of innovation at the heart of corporate strategies;

* implement risk management frameworks that support a calculated appetite for risk;

* structure incentive plans to reward innovative behaviour;

* strengthen the role of Boards in stewarding the innovation agenda for business sustainability; and to

* encourage 'corporate statesmanship' in dealing with major national challenges and industry-wide opportunities.

(d) Open issues we need to explore further

The forum discussions raised a range of open issues, which would benefit from further and more detailed attention. These include:

* developing more effective mechanisms for knowledge flow and technology diffusion, including how best to promote and extend successful models of innovation intermediaries and extension services;

* encouraging innovation through government procurement;

* deploying 'sector-sensitive' policies across both services and traditional sectors;

* establishing infrastructure priorities, and applying innovative approaches to infrastructure projects;

* promoting good innovation management practices in the areas of risk management, collaboration and capability development;

* examining the role of regulations, competition policy, and intellectual property laws in stimulating or constraining innovation; and

* increasing public awareness of innovation, especially its role in dealing with major national challenges, including climate, water, energy and health.

Next steps ...

The convenors closed proceedings by outlining some next steps, stressing the need to maintain momentum, build coalitions of consensus, and turn priority concerns into concrete action plans and proposals.

Going into 2007 the immediate actions would be to:

* promulgate the working 'Manifesto' for Innovation Leadership;

* develop a series of roundtable forums to take issues forward; and

* to continue to build a broadly-based and bipartisan coalition of people and organizations committed to promoting a more innovative Australia.

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