It is vital to the economy that Australia embraces innovation, according to Andrew Penn, with the Telstra CEO saying Australia should mimic the telecommunications company's strategy of combining incubation and collaboration with building human skills and developing new technologies.
Speaking at the Charles Todd Oration 2015 in Sydney on Thursday, Penn outlined the three drivers of innovation as being a combination of the move to mobile and consequently the Internet of Things (IoT); the widespread usage of cloud computing; and the rise of machine-to-machine (M2M) learning and artificial intelligence.
"The exponential growth in data, driven by a massive shift to mobile and the Internet of Things with the ability to store and access that data in the cloud in real-time and the computing power with advanced algorithms and machine learning -- these factors together are providing the capacity to solve almost limitless problems," the CEO said.
Citing a recent Deloitte report, Penn claimed that the digital sector contributed AU$79 billion in 2014 -- or 5.1 percent of the GDP -- making it the largest segment of the Australian economy. He said that the rapidity of technological innovation has had far-reaching implications for traditional business, however.
"Startups are changing markets overnight, because they are nimble, smart, and able to challenge incumbent businesses that are finding that scale is no longer an advantage. In fact, it is rapidly becoming a disadvantage. Technology has democratised innovation," Penn explained.
"We have learned that success today, and success tomorrow, depends on the ability to innovate. We have learned that being able to innovate at speed matters because in a hyper-connected world, speed is critical. Success today is defined by the ability to turn ideas into value faster than your competition."
Penn described the four elements of Telstra's approach to innovation as being facilitating incubation, as it does through its own startup accelerator Muru-D; providing spaces for collaboration, such as its Gurrowa Innovation Lab; investing in human capital, including running hackathons in schools; and developing new technologies and methodologies, such as 5G.
He said all Australian businesses and agencies should employ these four platforms to bring themselves in line with the digital economy.
"To succeed in the future, Australia must support and encourage startups and entrepreneurs who risk and dare and create so much that is new," Penn said.
"To succeed in the future, Australia must become world class at collaborating on innovation activities between government, higher education, science, research, and the private sector. To succeed in the future, Australia must build first class and real world capabilities in the STEM disciplines and ensure they are central in our national curriculum at all levels."
The federal government has been eyeing innovation of late, appointing a chair of Innovation Australia this month to push forward the country's innovation performance, launching an online IP library this week to boost collaboration, and opening the first of five AU$225 million Growth Centres in October.
While Liberal MP David Coleman recently argued that Australia's business approach is too pragmatic to be suited to innovation, Prime Minister Malcolm Turnbull is expected to deliver a set of government innovation policies in December.
"In the middle of so much growth and change, we are able successfully to transition our economy to one that wins and keeps on winning; we talk a lot about reform, especially here, but that's just a means to an end," Turnbull said at the Australian 2015 Economic and Social Outlook Conference.
"We need to be more innovative, we need to be more technologically sophisticated."
Turnbull has also previously said it is important for the government to promote science, technology, engineering, and mathematics (STEM) in schools and universities as well as support startups.
"If we want to remain a prosperous, first-world economy with a generous social welfare safety net, we must be more competitive, we must be more productive. Above all, we must be more innovative," Turnbull said.
Penn has previously said that connectivity is the backbone for any innovation in the tech sphere, with the ability to make advancements reliant on the quality of the underlying infrastructure of Telstra's network.
"Our networks and the connectivity we provide underpins so much innovation today. Our networks are already a key part of Australia's innovation ecosystem, and are only going to become more important in the future," Penn added on Thursday.
Telstra in October committed to rolling out its 4G network to 99 percent of the Australian population by June 2017, with continuing deployment of its voice over LTE (VoLTE) capability and investment in its national network a priority.