Australia should make full use of its potential to innovate. Creative solutions are needed to maintain economic growth while reducing demands on natural resources and ecosystems.
Sustainability and Innovation
How might a region increase the value (and hence global competitiveness) of its exports, while at the same time reducing its consumption of natural resources, its greenhouse gas emissions, and its impact on natural ecosystems?
Clean and Green Products
Putting an environmental premium on exports.
One way to promote exports is by developing a "clean and green" image. Specifically, by developing exports with lower environmental and natural resource costs than other regions. Such costs would made explicit, in order to attract customers who are willing to pay higher prices for good environmental outcomes.
The governments of regions pursuing the clean and green path would promote debate about environmentally sustainable products in order to leverage greater demand for such products, and so favour the exports of their own region.
Innovative Culture within Organisations
A culture of innovation should be promoted within every organisation.
Another way to promote exports is to encourage product innovation in export industries - the development of products that better meet customer needs - that help customers be more productive and to enjoy life more.
The idea here is that innovations come out of an innovative culture - the ability and desire of an organisation to adopt and improve on best practice.
Developing an innovative culture is necessary to allow organisations to meet environmental goals. This same culture can have the added benefit of allowing organisations to better anticipate and respond to customer needs.
Expenditure on Research and Development
Australia should spend more on research and development.
Australia is not spending enough on research and development. We should raise our spending on R&D to 3% of GDP, to keep up with other leading OECD countries in Europe, North America and Japan.
Such spending should not be by government alone. Business should be encouraged to spend more on R&D. The outcomes of business R&D are more likely to be commercialisable in the short to medium term. Government R&D tends to focus more on longer term knowledge outcomes.
The proper division of labour here is for governments to invest in research with more uncertain outcomes but with larger potential benefits, and for business to focus on research with more certain outcomes and more immediate commercial application.
Government research supports business research by providing a ready supply of commercially interesting research discoveries, and a pool of well-trained and talented researchers to consult with and recruit from.
Australia should ensure there are strong links between the different sectors of its innovation system, to optimise the flow of ideas.
An innovation system is a network of businesses, research centres, and universities, with strong linkages between them. Its purpose is to better connect technology development with customer needs.
It does this by:
1. Reducing the gap between emerging technology and commercialisation - getting products utilising the new technology onto the market quicker.
2. Allowing knowledge of customer needs (eg as developed and made explicit by the customers themselves) to better flow back up the production chain to influence the decisions of product designers and production engineers, as well as those conducting more fundamental research.
Having a good innovation system benefits a region's economy by allowing resident businesses to produce better goods and services, and to attract established or emerging businesses from other regions.
Two main drivers of innovation in organisations and economies:
- new technological possibilities - supply push.
- social needs and market requirements - demand pull.
A third important driver of innovation is emerging:
- the need to conserve natural resources and reduce impacts on ecosystems.
The need to alter practices to reduce natural resource use can be signalled by resource use levies which raise the price of material and energy inputs.
It can also be signalled via direct stewardship, by an organisation, of natural ecosystems that are directly or indirectly affected by the activities of that organisation.
Best Practice and Beyond Best Practice
Innovation is often a matter of adopting best practices as demonstrated by other organisations. Then going beyond best practice, by trying out new ideas to see if they work. Taking on best practice and new ideas requires developing a knowledge base - seeking and documenting ideas and examples. And it requires flexibility within the organisation - an ability to make changes quickly and with minimal expense.
Energy Efficiency Innovation - Innovation in product design and production processes can help us conserve energy
Innovation Capacity - Increasing Australia's innovation capacity is essential if we are to make a due contribution to the global project of developing a resource-lean, knowledge-intensive civilisation.
Australian Business Innovation: Overly optimistic in an ocean of unoriginality (PDF). Australian Institute for Commercialisation
Beyond the Resources Boom. Inquiry. House Standing Committee on Economics, Finance and Public Administration. Parliament of Australia. 2006
Ideas to Dollars: Science, Technology and Innovation . M.A. (Tim) Besley. ATSE. 2002.5
Information Technology: Sink or Swim? ATSE. 1997.12
Innovation - Do Australia’s big companies get it? Rowan Gilmore. Australian Institute for Commercialisation
Innovation in Australian Business, 2003. Australian Bureau of Statistics. 2005
Introduction to EcoReDesign. RMIT - Centre for Design
Knowledge Management Delivers High Growth Australian Manufacturing. Warren Centre for Advanced Engineering. Sydney University. 2004
Linking Innovation, Design and Sustainability. John Gertsakis. RMIT Centre for Design. 2000
New Concepts in Innovation. Australian Business Council
Public Support for Science and Innovation. Productivity Commission. 2006-2007
Institute for Strategy and Competitiveness. Harvard Business School
InnovationPoint - US management consulting firm focused on Strategic Innovation