Transcript Roy Green Presentation - South Australian Policy Online

Building Innovative Capability
Roy Green, MGSM
University of Adelaide, October 14 2008
 NIS review: Why, what and
how of innovation
 Can public policy translate
this to innovative capability
and performance at the
enterprise level?
 TCF review: Policy prototype
for capability building
Venturous Australia
building strength in innovation
Report and overview
available online at
www.innovation.gov.au
/innovationreview
“Ultimately, the purpose of a national
innovation system is to transform
knowledge and resources into dynamic
capabilities at the level of firms and
organisations, which are then better
placed to contribute to the innovation
performance of the economy as a
whole”
Business Council of Australia/SKE, New Pathways
to Prosperity, 2006
Global ranking dashboard
Trends in productivity and GDP growth
Components of Growth in Australian Living Standards
Why innovation
• Innovation drives productivity growth
and competitiveness of firms
• Innovation promotes social inclusion
through expanded opportunities
• Innovation will contribute to achieving
environmental sustainability
What drives innovation
• Innovation might mean new products
or processes, or new organisational or
business models
• But the key to successful innovation in
companies is investment in knowledge
and innovative capability
Australian government support
for science and innovation
Government spending on R&D (OECD)
Investment in Knowledge (R&D, Higher
Education, Software), % of GDP, 2004
7
6
5
4
3
2
1
0
Australia
Canada
Denmark
Finland
Sweden
The world is not flat
(Tom Friedman)
… it’s ‘spiky’
(Richard Florida)
“Knowledge creation and diffusion are
at the core of economic activity.
Knowledge is embodied in people,
and it is the quality of the human
resources that will determine the
success or otherwise of firms and
economies in the years ahead.”
Enterprise Strategy Group, Ahead of the Curve, 2004
Share of high and medium high technology
industries in manufacturing exports (%)
90
80
70
60
50
%
40
30
20
10
0
Ireland
Source: OECD
United
States
High-tech industries
OECD
Finland
Australia
Medium-high-tech industries
ICT trade balance (%)
25
20
15
10
5
0
-5
-10
-15
-20
Ireland
Finland
Source: OECD
OECD
United
States
Australia
• EU Lisbon strategy: “the most
competitive and dynamic knowledgebased economy in the world by 2010”
• US: “Rising above the Gathering
Storm”
• UK: “Race to the Top”
• Canada: “Benchmarking against
Global Best”
Broad approach to innovation

Non-linear with multiple sources
More than science and technology
Incremental as well as breakthrough
Low tech and high tech industries
Driven by collaboration not silos
But…
“The problem is… that the Lisbon strategy
has become too broad to be understood as
an interconnected narrative. Lisbon is about
everything and thus about nothing.
Everybody is responsible and thus no one.
The end result of the strategy has
sometimes been lost. An ambitious and
broad reform agenda needs a clear
narrative…”
High Level Group, Facing the Challenge, 2004
A key objective of Ireland's national innovation system is to translate
national innovation capacity to the level of the enterprise and workplace.
.
National Innovation System
Social partnership
Investment attraction
Research and education
Enterprise-level partnership
Clustering and networks
Technology transfer
Workplace of the future
Findings of the NIS review
Australia's innovation system will require:
– greater international engagement
– a more open and collaborative approach
– a substantial increase in investment
(private and public)
– a more coherent and strategic ‘whole of
government’ approach
Recommendations 1: research
• Increase funding for PFRAs and the
university research system (to 93/94 levels)
• Full funding of university research
• Increase stipend for PhD students
• Substantial infrastructure funding - NCRIS
successor
• Open access to research and collections
Recommendations 2: business
• New innovation support programs – Competitive
Innovation Grants Program, Linkage Voucher
Scheme, Knowledge Connections
• Continue existing programs – IIF, PSF and COMET
• Single interface for accessing program information
across Australia
• Standard program design principles
• Innovation Australia to be central delivery agency
for business programs
Recommendations 3: taxation
• Replace the system of R&D tax concession with an R&D
Tax Credit
• Firms < $50million turnover – 50% credit
• Firms > $50million turnover – 40% credit
• Current 125% concession provides an effective benefit of
7.5 c/$
• A 40% credit for large firms = 10c /$
• A 50% credit for small firms = 20 c/$
• The 175% premium tax concession and the tax offset
would be abolished
• Definitions to be tightened
Recommendations 4: governance
• Replace PMSEIC with a National Innovation
Council
• New Office of Innovation Assessment
• New Research Coordination Council
• Minister for Innovation to be joint signatory on all
innovation Cabinet proposals
• New National Centre for Innovation Research
• Framework of principles for innovation
interventions as basis for COAG process
Proposed governance framework
Setting priorities for innovation
1. Leveraging Australia’s natural endowments or
competitive strengths
2. Identifying areas with Australian solutions to
globally relevant challenges or markets
3. Creating scope to transform or reinvent existing
industries and service delivery
4. Internationalising Australia’s innovation system
through global integration and supply chains
5. Investing in innovation capabilities and
supporting infrastructure at all levels
Workplace of the future (TCF)
• new products and services, drawing on sources of
knowledge within and outside the enterprise
• new operational processes, including relationships
in global supply chains
• new business models within the firm and in the
‘extended enterprise’ of networks and clusters
• new approaches to marketing and sales as part of
strategic repositioning
• new work organisation, with high performance
work and management systems
Australia’s emerging narrative
• Shift from ‘structural adjustment’ to the
development of innovative capability at
the level of the firm and workplace
• “In the 21st century, innovation policy is
industry policy” – Minister Kim Carr
• But innovation policy is also a leadership
and organisation strategy, requiring
deep cultural change.