Can Australia truly be an innovative country?

The Government’s National Innovation and Science Agenda was released in December 2015 with the goal of boosting Australian innovation. But are we headed in the right direction?

Australian business, historically, had little incentive to take risk and innovate. We were a lucky country- there was an abundance of natural resources and a population small enough that it did not immediately warrant the attention of companies wanting to penetrate markets. Hence, the prevailing business culture in Australia was one of caution: why risk your hard earned capital when it was not necessary to do so? Why innovate?

But as we know, all of that has changed. It’s widely accepted that today is an era of ‘tions’: globalisation, digital disruption and deregulation have ushered in an era of world-wide hyper competition of which Australia is no longer isolated from. And it’s been perceived by the government that innovation and having a flourishing start up culture is critical for Australia to retain economic strength- especially given the end of the mining boom. Unfortunately, we’ve lagged behind. It’s only now that design thinking is gaining momentum in Australia and we’re only now seeing the birth of a start-up culture that has flourished for decades in the U.S.

For that reason, we largely welcome the National Innovation and Science Agenda, as a first step. It has addressed a lot of issues that are holding Australia back including prohibitive legislation and insufficient access to capital. It is also to be commended for its cultural focus: explicitly stating its will to create an entrepreneurial culture and creating a four pronged approach to doing this. The government also has its heart in the right place with these pillars: increasing collaboration between universities and business, boosting digital literacy, improving access to capital and letting government be an exemplar for innovation by changing its own practices. These are all necessary and finally happening.

But much more has to be done and a lot of the implicit assumptions embedded within the pillars of change that the government has identified are dangerous to make. In the short term, they represent good first steps but in the long term, they miss some very important variables in creating an entrepreneurial culture.

Creating entrepreneurs or employees?

To tackle our biggest reservations first: we are in danger not of creating the next breakthrough innovators, but creating the next generation of the specialists that work under them. The government aims to cultivate the ‘best and brightest’- helping children learn coding, developing a digital technologies curriculum and also helping STEM and ICT post-grads attain permanent residency.

These initiatives though, seem to be based on a perception that innovation stems from technical know how, especially in regards to digital technology. This is understandable given that the highest profile innovations are delivered through digital platforms or are hardware based: Uber, Airbnb, the iPhone etc. But there’s a break in the logic. If we think about Steve Jobs, its worth noting that he was not a programmer or product designer. Elon Musk has stretched his capabilities in his ventures after PayPal . Richard Branson too is not an expert in space exploration or airline operation. These people were idea connectors, experimenters and galvanisers. They had a different perception of how the world should work and surrounded themselves with people who could achieve it.

In other words, the government has missed the idea of invention as the key role of the innovator. The education policies that will arise will be teaching the next generation the tools for product and service engineering. But are we teaching them the divergent thinking, associative thinking, cross discipline collaboration and synthesis skills necessary to see opportunity and envision the business models and products to exploit these?

Again Australia is behind in this regard- it is only now that we are developing flexible degree structures and even then they are criticised. Universities like Carnegie Mellon in the U.S. are known for enabling the development of expertise in both humanities and sciences. Furthermore, their design degrees perceive design as an engine of social change too: adopting the widest possible definition of the discipline. Some universities have attempted this in Australia but the specialist nature of university degrees and the conservatism of the departments that hold them have led to their abolition.

We are trying to correct a brain drain, but to adopt a narrow view of the innovator’s education is to set ourselves up for an even bigger one.

A wider view of collaboration

Secondly, the government has rightly expressed the significance of fostering better ties between industry and research institutions. This is stipulated under the pillar of ‘Collaboration’. Grants will also be handed to start ups that will develop technology from CSIRO research. Again, these are excellent first steps- they acknowledge the fact that innovation is equally about commercialisation as it is about ideation.

But again, this definition of collaboration is narrow to a certain extent. ‘Collaboration’ to innovate and design new products, services and strategies necessitates more than connecting those with capital to those with ideas or with the research that renders these ideas implementable. Collaboration must take on a wider view: that of connecting experts in differing disciplines and different industries and connecting companies in a spirit of coopetition. As we have already seen, business models of the future don’t lie within the silos of separate industries. They lie in intersections between these. Despite previous claims of businesses and product and service categories being divergent over the long term, what we see is a reversal of this.

Finally there is insufficient focus on creating a start-up community. Much research has been conducted about the success of Silicon Valley, spawning a whole range of attempts to reconstruct something similar in other areas. But these have mostly failed as they hadn’t recognised that it was the informal relationships between people, a catalyst for co-opetition between companies and the sharing of resources that enabled collective breakthrough innovation.

The start-up government

Lastly, the government’s commitment to ‘Leading by Example’ in creating a more innovative and more entrepreneurial nation: reimagining its service provision delivery, providing government data to start ups and reviewing policies, is a welcome one. The rapid emergence of start up cultures in Europe and Asia could not have occurred without governments that were willing to change legislation to encourage a degree of risk taking. This very initiative: the National Innovation and Science Agenda is testament to the Australian government’s willingness to invest and support start-ups with a clear goal in mind. Its holding of policy hacks to ascertain what holds innovation back is also an example of a government more willing to undertake new methods to solve new types of problems: a display of strategic thinking, flexibility and to an extent, a designer’s approach.

But the government’s ultimate test will lie within the implementation of this policy itself. We do not mean the policy’s success or failure, but the government’s willingness to continue it despite changes in government or opposition. Critics will be vicious and any outcome will be scrutinised and glaring deficiencies pointed out. This is essential in a democratic society, but there is one important thing to note in creating an entrepreneurial nation: At the end of the day, the onus is not for the government to boost innovation- it is the responsibility of entrepreneurs, start-ups and corporations to do so. The most government can do is to create the best conditions for this to happen. And even then, there is no hard and fast science regarding innovation. Attempts to recreate Silicon Valley and mimic conditions on Israel have made clear that there is a correlation between certain aspects of countries with high rates of innovation, but not complete association.

A government can’t crack a code if we are still unsure if there is one- so we must not expect it to do so. But it must maximise the possibility of innovation. The government has stated that it has a goal of being an exemplar of innovation. And this is its first chance to shine. No matter the outcome of these first steps towards changing Australian business culture, the government must be willing to modify policy and remove stigma from possible failure. It must itself, act like a start-up: prototyping, taking a certain degree of risk and most importantly, keep its vision in mind. Because all successful start-ups are born from the recognition of a glaring need and a long series of adversities and breakthroughs that culminate in that need’s fulfilment.