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Ministerial Statement - Science and Innovation Building Australia’s Industries of the Future

17 August 2015

Introduction

Mr Speaker, I rise today to discuss one of the most exciting and important elements of public policy.

As members of the House know, changes in technology and the global economy are presenting both unprecedented opportunities and challenges for Australia.

In this context, and during National Science Week, it is worth reflecting on the role of science in Australia.

Science reaches into every corner of our lives – in ways we instantly recognise such as medical advances, and in other ways that are more subtle, such as the technology in our smart phones and exercise trackers or the advanced nutritional yield from our crops.

Science is critical for jobs, growth and business success.

It underpins our nation’s innovation capacity. This is important because today’s innovation is tomorrow’s industry and tomorrow’s jobs.

And we do have a track record of success to build on, including prominent examples such as the development of Cochlear implants and the invention of WiFi.

Australia’s science policy, and its connection to industry policy, has never been more important.

The Australians who work in our labs, in the field and in research hubs around the nation are truly the foot soldiers of the future.

Our policy settings need to ensure that Australian businesses are given every opportunity to compete and to succeed.

Our focus is on creating an environment in which Australia can weather the inevitable winds of economic change. The only way we can do this is by ensuring we have a broad base of economic strengths and the capacity to develop more as new opportunities arise.

To succeed and to guarantee our future prosperity we need to harness science and innovation for the national interest.

We must get a bigger bang for our science dollar.

And we must use science and innovation to drive a dynamic, entrepreneurial start-up system to secure future growth and jobs.

Economy in transition

Australia’s economy is in transition, just as economies are changing in other developed nations.

Our traditional industries such as agriculture and manufacturing have served us well – and they will continue to do so – but in new ways that capitalise on changing technologies and evolving markets.

To ensure Australia continues to make the most of our global opportunities, we must take a collaborative and long-term perspective.  This is essential to sustain Australian jobs growth and economic prosperity into the future.

Our goal is productivity growth which will in turn secure Australia’s economic growth and increased living standards.

While our productivity performance has improved recently, the gap has widened between Australia and those countries at the productivity frontier, such as the United States.

The key to driving productivity growth is innovation.

The OECD has shown that innovation accounts for around half of total economic growth.

Innovation contributes to productivity performance through the creation of new knowledge and technologies and through the diffusion of new processes and technology to firms across the economy.

Innovation activities, such as R&D, spread from individual firms to the wider economy and improve productivity by demonstrating the benefits or lowering the cost of a new technology, and by spreading knowledge.

It is estimated that for every $100 million invested by business in R&D, a return of $150-200 million is generated to the economy.

Despite the importance of innovation to growth, Australia’s innovation performance has been patchy.

Australia’s position in the evolving economy relies on a realignment of industry policy which is now focussed on facilitating the businesses of the future and supporting the entrepreneurial spirit of Australians.

We are not shunning our traditional industries. Rather we are embracing them to ensure we play to our strengths in new ways, using new technologies and new ideas.

At the moment, our businesses don’t invest enough in R&D and are less likely than our competitors to create new and improved products.

We need to focus on creating the right environment for innovative, globally focussed start-ups to succeed.

Australia has world class education, training and research systems to generate innovation and commercial outcomes for Australia.

But we are poor at translating research into commercial outcomes.

Our SMEs rank 29th out of 30 OECD countries on innovation collaboration between industry and research.

Our large firms rank 30th.

We must do better.  We will do better.

Putting science to work in the national interest

We have the talent, the infrastructure and the support.

Our challenge is to assemble these blocks and put science to work in the national interest.

That is why science, research and innovation are now at the centre of industry policy.

The Australian Government has set out a clear pathway to ensure our nation’s best researchers and our nation’s most productive industries can work to mutual advantage.

Our pre-eminent science organisation, CSIRO, is at the heart of this process to ensure our nation’s most respected scientists can work alongside industry to further enhance our record on collaboration and commercialisation.

We continue to invest substantially in science, research and innovation - $9.7 billion this year - to support:

  • research in universities, medical research institutes and agencies like CSIRO
  • critical research infrastructure
  • business investment in research and development and initiatives to link industry with science and research, and
  • participation in international projects and partnerships.

This substantial investment shows that the Australian Government is committed to supporting science and research – but we also want to be sure that substantial public investment is delivering benefits for all Australians.

That is why we are working to better utilise our publicly funded research agencies.

Our world-class agencies will increasingly work in partnership with business to identify and develop the science to address industry problems.

The CSIRO, for example, is refocussing its commitment to building stronger connections with industry to encourage the application of research, especially where it drives improvements in Australia’s economic competitiveness.

The expertise and infrastructure of our national science agency can be invaluable for industries and businesses.

To cite one case study - the CSIRO and partners have seen an opportunity to further improve Australian seafood, boost the aquaculture industry and deliver improved, high‑quality products to consumers.

As a result of this collaboration with industry, there has been an estimated increase in the Australian farmed prawn industry’s production from 5,000 tonnes to 12,500 tonnes per annum.

The value of the industry will increase by $120 million per annum by 2020.

As we look to the future, and focus on using science to create new opportunities for our nation we are developing a comprehensive science policy that will be underpinned by a strategy for a science nation:  an Australia in which scientific thinking, and science in action, can be found in all sectors of our economy.

A coherent national plan will maximise our separate contributions to the infrastructure, skills, human networks and entrepreneurial culture that underpin our science base and our economy.

We need a plan for the long-term – not a plan for a year or two.

And a sustained approach needs our collective energy and goodwill that crosses the political divide.

In taking this long-term outlook, I emphasise the importance of a bipartisan approach to industry and science policy so that the decisions we make today – whether they’re in STEM, investment in research infrastructure or ways to boost our ability to commercialise research – can benefit Australia for decades to come.

It is important to get this right and, over the course of the last two years, we have been assembling the building blocks that will collectively form our national approach.

We have reviewed the CRC Programme to ensure that it is the engine of innovative research to support the work of the new Industry Growth Centres.

We have consulted widely to develop ways to boost our national science, technology, engineering and mathematics (STEM) capability.

We are implementing new measures to boost the commercial returns from Australia’s research.

We have established National Science and Research Priorities and identified associated practical challenges; and are now examining closely the strengths and weaknesses of the relevant research capability.

And we are finalising a review of how we can take a new approach to the funding of national research infrastructure.

On the basis of these building blocks, we are building a science platform for Australia’s future.

What we are doing – industry programmes/initiatives

This Government doesn’t just talk about what might be done to bring science to industry.

Internationally, countries with strong innovation cultures tend to exhibit high levels of cooperation between research and industry.

The Australian Government is building a culture of entrepreneurship through changes to Employee Share Schemes, encouraging investment in innovative Australian businesses through reforms to the Significant Investor Visa and regulatory reforms to facilitate access to crowd source equity funding.

But there is still work to be done to lift the entrepreneurial culture of Australia.

Our Industry Innovation and Competitiveness Agenda sets out a new paradigm for industry policy with an emphasis on science to foster innovation and research.

It has put practical measures in place to bring cutting edge science and technology to Australian businesses.

The Manufacturing Transition Programme is just one example.

It is helping businesses transition into the new economy.

Take Romar Engineering, which will use its $1.6 million grant from the Manufacturing Transition Programme towards a $6.6 million project to develop and expand its advanced plastic and silicone moulding production to produce more complex and higher value added components for the electronics and medical devices industry.

And the results are worth striving for - high value, high technology and high paid jobs.

Of course this is not just about grants from the Government.

We are moving away from the old model of industry assistance, to instead focus on supporting Australia’s innovation potential by creating an environment that allows our firms to back themselves.

Australia’s best opportunities will come through playing to our strengths.

Government has a key role in bringing the players together to set the strategic direction for their sectors and to get them to collaborate and to expedite the translation of breakthroughs in the lab or in the field to the global market place.

That is what our Industry Growth Centres are about.

These centres are the central element of the Industry Innovation and Competitiveness Agenda.

Growth Centres will be vital to boosting collaboration between industry and science.

Each Growth Centre will set a 10 year strategy.

They will help Australian firms link to global supply chains so we can export our innovations – not our innovators.

Exports associated with advanced physical and mathematical science activities are becoming increasingly important, and are currently worth around $74 billion.

This is almost a quarter of Australia’s total exports.

CRCs will be the engine of innovative research, supporting the work of the Growth Centres to drive productivity and competitiveness.

Each Growth Centre will identify the research and technology gaps and priorities.

They will ensure the science and research community knows industry’s needs and commercialisation opportunities.

This will improve the translation of research into commercial outcomes and better capitalise on Australia’s large investment in science and research.

We are also encouraging businesses to innovate by providing the R&D Tax Incentive for eligible R&D investments and will ensure, through the Tax White Paper, that this $2.9 billion per annum initiative operates effectively and efficiently.

And we are promoting entrepreneurship through the Entrepreneurs’ Programme which helps firms with advice, business reviews and limited financial support for employing researchers and to commercialise new ideas.

This Government appreciates that reducing the time from invention to drawing board to market is critical.

That is why we have the Accelerating Commercialisation element of the Entrepreneurs’ Programme.

I recently announced $33.6 million in matched Accelerating Commercialisation funding to help 31 innovative Australian businesses turn their inventions into commercial realities.

Smart Steel Systems Pty Ltd, of Yatala in Queensland, has developed a fully automated steel fabrication system, which has the potential to generate major productivity benefits for the industry.

Accelerating Commercialisation support will be used to complete the final pre-production development and trial phase, with the outcome being a fully operational state-of-the-art commercial production facility.

Air Tip, of Alice Springs, has developed an innovative air powered side-tipper trailer to replace the traditional oil hydraulic powered side-tippers for the mining and transport sectors.

This solution will increase payload capacity, improve operation and commercial efficiencies, reduce environmental footprint and enhance employee safety. Accelerating Commercialisation support will be used to assist Air Tip commercialise this product both domestically and globally.

These are examples of businesses that in coming years will drive growth, create jobs and build prosperity.

They’re innovative and this innovation is underpinned by skills in science, technology, engineering and maths – STEM.

They are just some of our entrepreneurs who are turning good ideas into innovative products that we can market to the rest of the world.

In fact, around 760,000 jobs in Australia are directly related to the advanced physical and mathematical sciences.

In the last five years nearly 70,000 jobs have been created to work in advanced physical and mathematical sciences.

So these companies are just the tip of the iceberg.

We are focussed on replicating their success on a much broader scale.

We have the plans and programmes in place to support this expansion.

For example, the National Energy Productivity Plan will require innovative efforts and the development and application of new technologies, from businesses and governments in delivering more efficient lower cost energy services for consumers.

This can also lead to new export opportunities for Australian businesses.

This means leveraging our world class research system, our creativity and inventiveness to support new innovative businesses. It means encouraging our entrepreneurs.

As I said earlier, we will harness science, research and innovation for the national interest.

Conclusion

Mr Speaker, Professor Suzanne Cory, one of Australia’s most distinguished scientists, said of scientific discovery:

"It’s the excitement of being on the frontier."

I finish today by reminding the House that in placing science in the engine room of national productivity, from the lab to the global marketplace, we are entering a new frontier for Australia.

This new frontier is not something that should unnerve us.  Rather it is an opportunity that we should grasp.  And we are doing just that.

Australia has an unprecedented opportunity to align industry, universities, the research sector and the science community, to turn great ideas and breakthroughs into great leaps forward for business, for industry, for local communities and for every Australian.

Scientists often work on long-term goals, patiently letting years of research finally deliver results that literally change lives for the better.  That work should continue.

But at the same time, we are acting now –through collaboration and innovation.

The Australian Government will continue to put in place the new framework for Australian industry – brick by brick.

Our new structure is taking shape and I look forward to seeing our scientists and our innovators working with our entrepreneurs to create new local jobs and more global success.

(ENDS)