Australian industry calls for central innovation agency

The Australian federal government should establish a 'central innovation agency' if it wants to develop a coherent innovation policy in order to foster local research and development (R&D), and innovation.

"Our observation is that one of the reasons Australia does not have a coherent innovation strategy is that it does not have a single department or agency with responsibility for innovation policy and programs," StartupAUS said in its submission (PDF) to the Senate Inquiry into Australia's Innovation System.

"StartupAUS urges the government to consider the creation of a dedicated agency with responsibility for innovation policy and programs — in a similar vein to New Zealand's Callaghan Innovation, and the UK's Technology Strategy Board," it said.

The Senate Standing Committee on Economics inquiry into Australia's Innovation System was launched on 18 March to look at the challenges to Australian industries and jobs posed by increasing global competition in innovation, science, engineering and research, and closed for submissions yesterday. The reporting date is the first sitting day of July next year.

StartupAUS submission, published yesterday, also recommended that in order to foster local innovation the government should create an entrepreneur visa, and establish a Silicon Valley landing pad for Australian startups — as they make the move to California.

Additionally, the organisation recommended that the government establish a national "learn to code promoting program", continue the Innovation Investment Fund program, which was scrapped in the latest budget, and to establish a seed co-investment fund.

StartupAUS also admonished the government for funding cuts it made to programs designed to foster innovation and the startup sector in Australia in the Federal Budget 2014-15, delivered on 13 May.

"It is highly conspicuous that the Australian government’s support for the startup sector is decreasing at a time when the rest of the world is increasing its investment in this sector," it said.

The coalition announced plans to scrap eight programs aimed at fostering startup innovation, including Commercialisation Australia, and the Innovation Investment Fund, from January 2015, saving a projected AU$845.6 million over five years.

While StartupAUS said that it did not believe the government should be required to make an open-ended commitment to supporting the startup sector, it suggested it should develop an exit plan for scaling back and ending its support of each part of the ecosystem.

The CSIRO, which also received funding cuts in this year's federal budget, said in its submission to the inquiry, that the establishment of a "national research strategy" would focus investment and R&D into critical would help balance investor-led and in-firm R&D activities.

"As well as being responsible for many of the most transformative inventions, government investment in R&D significantly boosts productivity," the CSIRO said. "The OECD found that a one per cent increase in public R&D expenditure could be expected to generate a long run increase in productivity of 0.28 percent. This compares with a productivity increase of 0.11 percent for a one per cent increase in business R&D expenditure."

Meanwhile, the Australian Services Union and the Finance Sector Union said that the federal government should focus on stemming the offshoring of IT and other technical skilled jobs.

"Innovation offshoring has created a competitive challenge with growing concerns that innovation offshoring may extend the 'hollowing-out' of the economy," the unions said in a joint submission. "Some fear that a loss of knowledge worker jobs to Asia may erode Australia’s innovative capabilities.

"When a services sector job is offshored, the value of an Australian worker's industry-specific and firm specific knowledge is destroyed. For example, a highly paid IT consultant will typically know much more than just their IT role. In order to understand innovation we need to appreciate human and intellectual capital as core resources within a knowledge-based society," they said.

The industry roles most at risk to offshoring, according to the unions, included ICT support technicians, software and applications programmers, and keyboard operators.

While the submission deadline for the inquiry was yesterday, at the time of writing late submissions were still being accepted.