Innovation is undoubtedly the biggest opportunity to create a new era of increased economic and social prosperity for our nation. But just how do we unleash our innovation potential?
While this challenge has been embraced in recent years through the federal government’s National Innovation and Science Agenda, and significant advances have been made, more decisive action is needed.
The federal budget to be handed down next week is an incredible opportunity to incentivise cutting-edge research that will create jobs and revolutionise our lives with new products and services, such as new health treatments.
According to Innovation and Science Australia, our country is in a $1.6 trillion global innovation race where the prizes are a bigger share of global wealth, better jobs and the best access to the products of innovation.
Universities and industry have made the first steps in bridging the “translation” gap between research and commercialisation. For example, UNSW Sydney has increased engagement with industry by 20% in the past year alone, with knowledge transfer between academics and the end-users of our research accounting for almost 10% of UNSW’s turnover.
This has been done by mobilising our human capital, building world-class infrastructure and embedding a culture of innovation and impact through partnerships with industry. UNSW is not alone in this quiet industrial revolution; similar initiatives are being replicated across the nation’s universities.
But we still need more leadership from all sides: academics, industry and government.
There seems to be a frustrating disconnect between industry and publicly funded research agencies, which could work together far more effectively to boost our economy.
An easy yet transformative change would be to reform the federal government’s research and development tax concessions. They are not as effective as they could be, forming a “catch-all” tax write-off that is beloved by the marketing and product teams of some of our biggest brands.
There seems to be a frustrating disconnect between industry and publicly funded research agencies, which could work together far more effectively to boost our economy. For example, while the present R&D tax incentive accounts for about one-third of the $9 billion of total government support for research (in 2013-14) at UNSW, despite our intensive engagement with industry only 12% of our contract research revenue can be attributed to R&D engagement with Australian industry.
The story is similar for other publicly funded research agencies. We lag the performance of many other countries.
But we also know that for every dollar invested in university research, between $5 and $10 is returned to the national economy. The design of the R&D tax incentive should reflect this strength. Better targeting of the incentives is particularly crucial because Australia is falling behind its international competitors when it comes to R&D spending.
Recent figures on the percentage of gross domestic product spent on R&D by OECD countries show that Israel and South Korea have the highest spends at 4.25% and 4.24% respectively, while China’s is 2.12% and rapidly increasing. The average spend for all OECD countries sits at 2.4% while Australia’s is at 1.88%, the largest gap since 2000. We must do better and we must be smarter.
Another urgent task is to construct a national framework to support the creation of innovation precincts in key locations across Australia. This model is proven internationally, with perhaps the most successful being China's Torch Innovation Precincts.
Many universities are forging ahead with exciting innovation precinct projects, and UNSW is one of them. The UNSW Torch Innovation Precinct, which is modelled on the successful Chinese program, is designed to foster an entire innovation ecosystem from student start-ups and entrepreneurship right through to research commercialisation outcomes.
Like the Snowy Hydro and other nation-building projects, the development of a co-ordinated national network of innovation precincts will help Australia prosper in a globalised and highly competitive international economy.
Less than two years after the establishment of the Torch partnership, the research contract pipeline stands at more than $100 million. UNSW forecasts that by 2025 its Torch precinct will make a $1.09 billion total economic contribution to Australia’s GDP, including the creation of 700 jobs. In the longer term to 2055, the UNSW Torch Innovation Precinct will have an estimated $5 billion to $10 billion impact on Australia’s GDP with the potential to create up to 4000 jobs.
But to help Australian companies truly embrace the benefits of such precincts, a national framework with funding and incentives needs to be put in place. Like the Snowy Hydro and other nation-building projects, the development of a co-ordinated national network of innovation precincts will help Australia prosper in a globalised and highly competitive international economy.
A quiet revolution has taken place in Australia’s universities. We are building the human capital — the researchers and entrepreneurs — who will power our nation’s future. We know collaboration drives innovation and innovation fuels economic prosperity. This budget should help universities, industry and government work more effectively together for the national good.
Innovation should not be a dirty word, nor do we want the innovation to be simply a slogan that the community treats with suspicion and confusion.
Instead let’s ensure the best — and, yes, the most innovative — of our world-class and homegrown research touches people’s lives in a practical and measurable way for the better.
Brian Boyle is Deputy Vice-Chancellor, Enterprise, at UNSW.
This article was originally published in The Australian.
UNSW experts will give independent analysis and reaction to key budget 2018 measures during a roundtable in Sydney’s CBD. The event will be live streamed and available to download and watch later. Watch live: 12.30pm, Wednesday, 9 May 2018 at http://business.unsw.edu.au/budget.