Back innovation or falter, report warns

Australia risks becoming a "branch office" economy unless the federal government spends an extra A$2.6 billion (Pounds 1 billion) over the next five years to encourage innovation, according to a report released last week.

Innovation - Unlocking the Future was compiled by a working group set up after last February's National Innovation Summit. It calls for the Australian Research Council's funding to be doubled to A$240 million, an extra A$500 million to strengthen research infrastructure in universities and other research organisations, and greater remuneration for researchers.

The report says Australia needs to develop a stronger culture of innovation for generating and exploiting new ideas to keep the nation prosperous.

Its 24 recommendations include: a proposal to improve incentives for business to undertake research and development through tax incentives of up to 200 per cent; a bigger push to commercialise publicly funded research schemes; incentives and rewards for "innovation champions"; and a programme of innovation and enterprise scholarships to be introduced in schools.

David Miles, chairman of the committee that prepared the report, said Australia's prosperity depended on the creation of a solid, sustainable research and development base from which ideas could grow.

Mr Miles said Australia would fall behind other countries unless the government acted quickly. "The consequences are quite simple: if we don't make this investment, we become a branch-office economy. But, with the right added incentives to business, Australia has so many positives, people will flock back here."

Innovation would thrive in a culture that was not afraid of risk-taking, he said, and in a culture that promoted the value of experimentation and rewarded enterprise. He urged the government to adopt the 24 recommendations as a package and not "pick off bits and pieces".

The Australian Vice-Chancellors' Committee and other science and industry groups applauded the report. AVCC president Ian Chubb said the report's particular strength was the commitment it demonstrated among senior representatives of industry, government, research and education.

"Greater public and business- sector awareness of innovation, improved conditions for commercialisation of ideas within research bodies, more government investment in research infrastructure and incentives for staff are eminently sensible recommendations," Professor Chubb said.

The Australian Academy of Technological Sciences and Engineering and the Australian Academy of Science also strongly endorsed the report's recommendations. "We are convinced that these recommendations provide the commonwealth and state governments, universities and industry with a way forward," the two academies said.

Although federal industry minister Nick Minchin described the report as extremely important and one that "looked to the 21st century", he made it clear that the chances of a A$2.6 billion injection of funding were slim.

"Policies and programmes are needed to sustain economic growth and Australian living standards," the senator said. "Many of the things in this report are going to be fundamental to that. But the government's response will be one based on our budgetary capacity and the competing demands for government's obviously limited resources."

The federal Labour opposition said the report was a damning indictment of the government. Its industry spokesman, Bob McMullen, said the report highlighted the damage the Howard government had done to Australian science and innovation.