Where do you think Australia sits in the OECD rankings of collaboration on innovation between industry and universities? Hint: it’s not last. Answer: it’s second-last. Australia must move swiftly to get government, industry and universities collaborating more closely than ever to build an innovation economy—our most reliable and sustainable solution to transition from the commodities boom to a new high-value, high-wages economy. The Australian Technology Network of Universities has prepared a report, Collaborate, Innovate and Prosper (How to Support Australia’s Competitiveness and Prosperity through Targeted Policy Solutions), with a checklist of five recommendations to help pave the path, detailing practical strategies and bold policy changes.
As commodity prices level out, capital investment slows and various sectors inevitably become disrupted by global technology trends, we face a critical question: how can Australia be competitive in a world where it is increasingly difficult to win? There are remarkable opportunities for Australia. While we may not have the size, scale and population of other leading economies we do have the knowledge, creativity and entrepreneurial spirit to compete with the best.
Take Silicon Valley, for example. With a geographical size of about three thousand square kilometres and a population of approximately three million people, Silicon Valley leads the world in many sectors, generating economic impact well above its size. The top 10 companies alone in Silicon Valley have a combined market capitalisation of $1.7 trillion. That is more than Australia’s total gross domestic product.
Silicon Valley attracts the best and brightest from all around the world. It is a breeding ground for entrepreneurs, technologists, inventors and investors. It has the world’s highest concentration of high-tech workers and high-tech manufacturing. It is home to some of the world’s most innovative and disruptive companies. For these reasons and more, GE has invested $1 billion to establish a software headquarters in Silicon Valley. We added 1,000 software engineers who are working on applications across our businesses in healthcare, transportation, energy, oil and gas.
We made this significant investment because we see massive change taking place. The rapid convergence of the physical and digital industrial world is driving global technology trends, accelerating innovation and encouraging greater global collaboration through access to big data, smarter and more connected machines and real time analytics – something we call the Industrial Internet.
These trends will reinvent industry as we know it and transform the way we work. This focus on software and the profound opportunity for greater collaboration with our customers on analytics and applications is critical to our success in global markets, including Australia.
So what can we learn from Silicon Valley to drive Australia’s growth?
At the very core of the region’s success is its highly skilled and richly diverse workforce and an extraordinary culture that is open, nurturing, thrives at risk-taking and is comfortable with failure.
Remarkable opportunities exist for Australia to punch above its weight in technology and high-tech manufacturing
Australia’s ability to compete globally in a connected, technology-driven future lies in the strength of our knowledge economy. We too can compete on a base of innovation and entrepreneurialism. However, we have to invest in skills and talent. Demand for engineering talent in Australia currently outstrips supply. We must invest more in STEM education. STEM is a curriculum based on the education of students in four crucial disciplines: science, technology, engineering and mathematics. We commend the Prime Minister’s announcement in 2014 to set up five industry growth centres and the Commonwealth Science Council as part of its Industry, Innovation and Competitiveness Agenda. This policy is crucial in boosting our nation’s knowledge economy, encouraging greater entrepreneurship and bringing business, government and industry closer to commercialise ideas with speed.
Businesses must also continue to invest and at GE we know we have a role to play in this. In 2012 we opened a $100 million technology and learning complex in Jandakot, Perth. We have since provided over 45,000 hours of critical training and skills development for our people and our customers in the oil and gas, mining and transportation sectors. Since 2010, we have been running open innovation challenges to develop critical technologies. In 2012, we launched our first local ecomagination challenge, which sought out disruptive technologies for a low carbon future. We also have a $20 million, five-year innovation partnership with the CSIRO where we collaborate with research to address global challenges around healthcare, materials, energy, resources and analytics. We launched this alliance in 2010 and have seen real advances in technologies that will change people’s lives.
The time to act is now. With the right investment and policy frameworks to enable business investment and risk-taking, we can develop and nurture a highly skilled workforce for the knowledge economy. We can build Australia into a hub for innovative businesses and technology leadership. We can fuel growth through a culture of creativity and invention. We can make Australia competitive for the next generation.