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Why we all need to own the Innovation Nation

February 29, 2016
GE’s Innovation Barometer 2016 survey was in the field shortly before the release of the government’s Innovation Statement, and it’s clear from the findings that the National Innovation and Science Agenda has come at the right time. Globally, the survey found citizens calling for greater government support for innovation, and this is especially true in Australia, where a mere 17% believe the government should focus less on driving innovation in Australia (versus 30% globally), and a loud and clear 94% are calling for government to make Australia a leading country for innovation.
We know we need to get cracking on this ideas boom. But innovation is a word that’s meaningless without action. What should we be doing more, less or differently to capitalise on the government’s ambition to make Australia a global innovation hub? GEreports spoke with four people who are walking the talk.

Wyatt Roy, MP, Assistant Minister for Innovation, Member for Longman, Queensland
(and recently named on the Forbes Asia 30 Under 30 list)

Government should never be at the heart of innovation. It is our job to create the framework or the settings that allow a truly private sector innovation ecosystem to thrive. We want to see our incredible entrepreneurs and innovators at the heart of the future success and prosperity of this country.

We need to create a uniquely Australian innovation ecosystem, and we need to play to our strengths. We have some of the brightest and most talented people in the world, and I know we’re developing great talent because there’s 20,000 Australians working in Silicon Valley today. A huge strength for us is our access to the Asian marketplace, where we see 1 billion people coming into the middle class. They will want to buy our innovative businesses, products, ideas, services, and in that marketplace, we have access that effectively no other western country on earth has.

What are the policy levers and areas that we need to look at? The big one is culture, which can’t just come from government—it’s got to come from all elements of our society. We need to drive this cultural shift in our country where we support some of the best elements of our culture: supporting the underdogs, the have-a-go mentality, that deeply anti-authoritarian mindset that we have, but also a more liberal approach to risk and to failure. And also we need to celebrate our successes to help inspire more people to be involved in this space.

Clearly there are some policy settings that we are changing around the attraction of capital for investment into innovation, and obviously some tax changes that we’re seeing happen.

We really want to see greater collaboration between the private sector and our research institutes on the incredible scientific research that we do in this country. We have lagged when it comes to commercialisation, or the translation of those ideas into businesses, products and services.

And of course over time we can continue to grow our talent pool as well with a clear focus on STEM, digital tech and entrepreneurial skillsets in this country.

And finally, government itself should be an exemplar of innovation, and it’s a difficult needle to move but we are throwing all the resources and willpower we have at doing that.

Michelle Narracott, strategy, transformation and digitalisation expert and PolicyHack champion

Government has responded to a general belief that Australia has not been performing … everyone wants Australia to be improving its innovation performance. We know that we’ve being ranked very low, given a number of different reviews, from the OECD rankings right through. Public servants and public sector leaders are going back into government now, to convert the Innovation Statement into strong strategy and implementation programs.

I’m a strong believer in smaller government, and I’m not alone in that. There’s a very valid report that’s just been released by Professor Peter Shergold called Learning From Failure. It says something that I have been pushing for the past 20 years: that the only way that we can effectively achieve social and corporate reform is through having a smaller government, that is collaborating and using the potential within corporates and the not-for-profit sector.

It’s a concept called adaptive government, and the idea is that what you’re focussing on doing as a public servant is not creating full-blown programs and then doing some testing of them with the private sector and the not-for-profit sector. Instead, right from the start, you’re saying government doesn’t have a role in this, that our role is to get the best minds together and come up with the best programs, and we will do that by being the facilitator. And that’s exactly what Wyatt Roy did at Policy Hack, which was to input into the Innovation Statement.

The biggest recommendation in the report I wrote up after PolicyHack was the need to work out a way to get corporate buy-in. We were proposing that there be a contract, almost like an accord, where each corporate in Australia would put it out there in the public domain and be really transparent about its commitment and its contribution to the Innovation Statement and its implementation. They’ve done this overseas in a number of different jurisdictions. Can you imagine if every corporate in Australia did that?

We did that with sustainability and environmental management 20 years ago, and we did it with corporate governance. Those were two really major issues where we wanted to get significant quick change from within the business sector, and transparency was the answer. And some organisations work out how to use it as a lever for improved customer and industry respect.

We know that Australian businesses are amongst the most ethical in the world. We know that they’re really tied to social value. But there’s a disconnect between how they’re perceived by the corporate sector and how they’re perceived by the public sector. There’s this culture of suspicion, as I call it, by the public sector, of companies. Imagine with this level of transparency what we’d be achieving more quickly?

Shergold’s idea of adaptive government has four key pillars. The first of those pillars is that you will do experimental stuff, and innovate with pilots and so on. And be prepared to fail, which is the Learning from Failure of Shergold’s report title. And then the second thing is to do that in collaboration. You get past this concept that the private or corporate sector is just there for outsourcing of stuff; it’s there to collaborate on experimental ways of doing things. And through these experiments and trials and improved transparency of what’s happening between the corporate and public sector, you very quickly start to change the culture of suspicion and start sharing.

Tim O’Meara, research leader for GE Healthcare Australia, NZ and PNG

As a nation we need to encourage more collaboration and we need to discourage self-interest and exclusive partnerships. In this country, our research communities are unfortunately prepared to sign agreements with multinationals that are exclusive arrangements. That stifles innovation because you’re not working with the rest of the world, you’re just working with one partner.

Innovation is a speed game. We are competing with the rest of the world, and there’s no point in us going down the slow path. We’ve got to be in the fast lane and if we’re going to do that, we need trust and we need collaboration.

And that’s what we have to offer in terms of the nation, if we’re going to compete.

I was talking to somebody who invests in startup companies, and he said, “The world’s flat now, and everyone’s an innovator.” We need to make sure we can fast-track our innovations, and we do that through breaking down these barriers, such as the exclusivity club.

A lot of academics in universities still treat their business development people and to some extent their industry people, as second-class citizens. I know that’s not what we want to hear but it’s the truth. If we’re talking about speed then we’ve got to have trust, and it has to be at all levels. It has to be with the world-class researcher, the elite professor who’s got an enormous amount to offer, to the business-development person who’s trying to engage with industry, to the industry partner who’s trying to engage with that university or research institute.

Some of our elite universities don’t get this right. You go to some universities, you get a “can do” attitude. And you go to others and you get a “why should I?” attitude. And when you’re a multinational organisation and there are hundreds of researchers that you can work with, you’re going to work with the ones that have the can-do attitude, not the why-should-I attitude.

This culture needs to change. We’ve brought up a lot of people to believe that research funding is a limited resource, and that if you’ve got it, someone else hasn’t. We’ve taught them from day one to compete fiercely with their peers. Doesn’t it seem bizarre that there are research groups around Australia who are working in the same area and have an enormous opportunity to work together and share their expertise, but they’re not. They’ve developed this artificial loathing of each other … they perpetuate this ‘I can’t work with that group’ thing. Come on! We’re a small country, if we’re going to progress, we need to work together. We need to trust each other and get on with it.

There are several ingredients needed for a thriving innovation ecosystem. You need great academic research, and we’ve got that. We need a government that accepts innovation, and this is part of the Innovation Statement. If we have impediments—if we make it really hard for new medicines to get to patients in Australia—we’ve lost the speed game. We don’t want to compromise safety, that’s a given. But we do need to work out how we can be fast and be safe, and in terms of regulations, that’s a really important aspect.

The final thing is you need multinationals and you need startup companies, but the most important part of any recipe is what binds them together, and that’s trust and openness.

Daniel Ringrose, partner at Pollenizer, director at Founder Institute, business coach, innovation consultant and startup advisor

There’s been a substantial shift in sentiment since the Innovation Statement.

I’ve been running a program for Prime Minister and Cabinet called DataStart, which is building startup companies owned and led by entrepreneurs but supported by government to try to create private, stand-alone businesses. We want to showcase some really amazing potential, using government services.

Startups don’t really yet know what their product is, who their customers are or how they make money. The things that are hard for them to work out are ‘What should I be working on for my business?’. The government has had education services for small business for some time, providing insights and guidance for people who may be in trades, for example, for how to deal with things like taxation and so on. Those kinds of smaller level government services have been there for known businesses. But there isn’t much service yet available from government at any level to help support people who are in those very unknown stages. It’s starting. We’re seeing things like government-sponsored co-working spaces, government funding for startup eco-system programs coming through, for conferences, meetings and training.

The first mistake that we make as a nation—which is something our Australian culture is challenged by—is that we work hard and we don’t like failing. It seems more of a shameful thing than it would be in perhaps Silicon Valley. Culturally we need to be able to try to break a whole lot more things to find that kind of success.

The new policies that we’ve just seen announced start freeing up money to take some lower risk on investing in things that could fail. They start freeing up people to have a faster track into trying new ideas … to be able to work out which parts work and which don’t more quickly.

GE has its FastWorks program. That’s a way to try new ideas using lean startup thinking, and work out which ones are going to fail and, through continuous scientific experimentation, work out which business model is going to give you something that works. It’s naive to think that innovation on its own is going to mean success, because if it’s something we knew was going to be successful, then it wouldn’t be innovative …  by default we’re in a place where we don’t know. And as we start to recognise that failure is something that we want to support innovation with more pace, that’s what’s leading to policy change and is helping startups in large organisations.

As we see more success stories, that’s igniting interest. Government needs evidence that we can turn this new innovation space into real money and real jobs, and real exports.

DataStart came into being looking to use the model that incubators and accelerators have used to help build one of those programs backed by government and government partners. We want an example that uses open data, to show that public data has value in the startup ecosystem. Our first company, CohortIQ [a health-tech startup which combines government open data with hospital data, focussing on avoidable hospital admissions, which it estimates at 235,000 a year in Australia], has been with Pollenizer for two weeks and we’re trying to spend nine months, supported by government, to try to build that business from first startup concept into something with a successful business model that is creating growth in that business.

That’s a showpiece example of what open government data is able to do. Now we’re able to justify a lot more of those programs that are coming through and also to show the upsides of open data for citizens.

Unless we make real examples that actually make a difference, we’re not going to be able to continue it. So our job is to make sure that we build businesses that succeed.

More features on the Australian innovation race:

Infographic: Australia's innovation optimists
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