Address to the National Innovation Policy Forum

Parliament House Canberra

ED HUSIC: Good morning everyone. I first want to acknowledge that we’re on Ngunnawal land and pay my respects to Ngunnawal and Ngambri people, and thank them for their custodianship, and also I want to pay my respects to elders past and present and the Aboriginal and Torres Strait Islander people that are here with us today.

Just picking up quickly on Selina's points, referendums come and go, but the work towards reconciliation continues. There is much work to be done, and that will not stop because we will keep pressing ahead. Thank you to Cooperative Research Australia for the opportunity to address a second National Innovation Policy Forum.

Now, you described me as energetic, but it's Monday morning, so I'm just going to like lower everyone's expectations, I think. No one likes to see an energetic person on Monday morning, so I'm just going to "slow my roll" as the kids say, but it is a big deal for me being here with you all.

It's particularly good to be here in the Great Hall with extraordinary leaders from across a range of different areas; business, research, government and [indistinct] spanning organisations.

I just want to thank Jane O'Dwyer, the Chief Executive Officer of CRA, and not just for the invite, Jane, but I've always been grateful for your advice and your assistance, and more importantly your commitment to this area, it is important, very vital, for not just the economy but for the country long term, and its contribution to the world stage, so I'm very grateful for that, along with the presence of our Chief Scientist, Cathy Foley, good morning Cathy, and this year's Prime Minister's Science Prize winner, Michelle Simmons. Good morning, Michelle, and thanks for your presence today, and if I can also just acknowledge the presence of my great friend, Kate Lundy, who is here too, and not only has continued her passion within the parliamentary realm in this area, and is someone that took the steps before me in this space, but has continued that post politics as well, Kate, very good to see her here today.

I know the forum's also going to feature the 2023 Ralph Slatyer Address on Science and Society, given in honour of Australia's first Chief Scientist, and that address will be given by someone I've got a huge respect for, and gratitude for, and being able to pick up the phone   well, actually, don't pick up the phone anymore, it's a Zoom call, from time to time, but being able to talk with this person, get their advice and their take, and being someone who's contributed in their own way significantly to the progress of innovation in this country, and that's Catherine Livingstone. I just want to thank her in particular for her leadership at organisations like Cochlear, but also someone's who's banked in other firms and been a champion of them, not the least of which is, Silicon Quantum Computing of which Michelle's a massive pioneer.

The cochlear story of course started four decades ago when Professor Graeme Clark pioneered the world's first multi channel cochlear implant and created an entirely new trend for hearing aids. It has literally helped hundreds of thousands of people with moderate and profound hearing loss, giving them the gift of sound that they never thought they would be the beneficiary of such a gift.

This is what I keep saying about what we do. It's not just about making the [indistinct] it's about making a difference in terms of innovative contributions not only for the country but for the world; a story about how clever Australians using their skills and know how unlock potential which today is all about as well.

That's why it's a big deal for me to be here this morning, talk to you about what we as a government are doing to help support this, to back in Australian know how, we have greater faith in our ideas and help turn those ideas into reality, unlocking our full potential.

As a lot of you would already know, be it our small businesses, SMEs and start ups, are the ideas factory of our economy. But sometimes having a great idea isn't enough. You need to have more. You need to bridge the valley of death, realising that bearing the cost of turning a good idea to a great product has sometimes been a bridge too far for many.

Further, scaling successful start ups into bigger businesses has also proven to be a big challenge.

Now recognising the challenge of commercialisation in most advanced economies was a motivation for me to ask Industry Innovation and Science Australia to give me advice on how world class research would be better commercialised within Australian industry.

I asked IISA to focus on the barriers faced by businesses to collaborate with the research sector, and research commercialisation in Australia, and provide me with advice on practical ways in which we could overcome those barriers, and I'm pleased to say that IISA Chair, Andrew Stevens and the board, they delivered this advice to me recently, and more through the Barriers to Collaboration in Commercialisation Report, and we're releasing that report today, and it's a thought provoking report. Not everyone's going to agree with everything that's said in the report, but they'll appreciate the spirit in which this report has been delivered to us.

It recognises the huge amount of know how and capability in Australian businesses, that they're strong adopters of technologies and business processes, but we've got a big job to innovate them, and particularly do things differently in a world that is challenging us to do that. It's this type of innovation will support our efforts to transform and diversify industry and build important deeper economic complexity in the country.

The report highlights important demand side issues impacting the capacity and capability of Australian businesses as we invest, adopt and scale innovation, and to work together more effectively.

What was particularly noteworthy is the assessment of the pressing need to grow medium sized manufacturing businesses in the country, what IISA has described as Australia's scape up challenge, and trying to not only do that, but identifying the missing middle as the big pathway to achieve that, because Australia does have a shrinking band, middle band of businesses that aren't growing. The proportion of medium sized businesses in the manufacturing sector has declined by close to 40 per cent in the last 14 years.

So improving our capacity to be resilient, to thrive, grow the Australian economy, this is going to require an industry structure with greater numbers of commercially sustainable medium sized businesses.

Growing those businesses will be critical to the transformation of our manufacturing capabilities. Building strategic business capabilities will be critical for businesses to recognise and exploit market opportunities.

The capabilities we need to build are those that can support our businesses to develop a mindset that is broader than operational processes and technical efficiency aspects, one that supports more forward looking internationally focused mindset that develops and sustains competitive advantage based on one of the key things we will all need to focus on long term, value added.

The report highlights the importance of strengthening management capabilities to develop innovative business models and form productive research partnerships, and I want to thank IISA for an insightful, compelling and thought provoking report.

And it also in many respects establishes a capability baseline across the National Reconstruction Fund priority areas and will help guide our Government's actions in the years to come. It raises important issues, as I said, moving forward.

I'm pleased to say many of the issues raised in the report are going to be directly addressed by a $400 million program that kicks off today, the Industry Growth Program. Through the Industry Growth Program, we will be able to partner with small and medium sized enterprises that want to grow, that have got the further ambition to scale up their businesses and to make sure they've got the best chance for success.

Under the program, small businesses, start ups, will be able to apply for expert advice in getting their goods to market. We've begun putting in place a national network of advisers. We've got a proven track record of expertise to turn research into business success. And those start ups and SMEs, they'll be able to apply for access to great advice from those that know, and they'll be able to apply for that advice and assistance from today.

But the IGP officially open, and from today businesses can apply for help by the website, and from early next year they'll also be able to apply for funding to help take their businesses to the next level. Applications for grant funding are expected to open early next year, and I see the Industry Growth Program as fundamental to addressing capability and capacity issues that were identified by that IISA report I mentioned earlier, and especially supporting scale up of businesses.

It also in many senses will be the gateway program for Australia's Major National Transformation Manufacturing Fund, the National Reconstruction Fund. What we wanted to do with the IGP and what I'm doing in my space is joining up so much of the work and the programs that exist within my portfolio.

And while the NRF will fund businesses that can deliver a rate of return, there are a lot of businesses that are pre revenue that won't be able to meet that criteria, and we need to get them over the valley of death.

The IGP in many respects is that bridge, and we deliberately designed it so that, click, click, these things join in, and can help businesses to scale up. We want to see deeper economic complexity, and we've got to be able to build massive momentum in joining up all these disparate parts, all these programs while putting in place key programs like IGP are going to be part of that.

I've been extolling the virtues of the National Reconstruction Fund for some time, because it is one of the largest investments in living memory in Australian manufacturing capability. It's an investment in industry, a reflection of our commitment to rebuild manufacturing assets and capabilities; operating commercially, aiming to deliver a positive return over time.

Our big focus will be on four policy objectives of diversifying transport in Australian industry, creating secure, well paid jobs, boosting the sovereign capability, investing in Australian workers, using Australian know how and resources to make more things in our nation. It's a base to keep our best ideas and jobs onshore and a beacon to bring our prized people back home.

We've appointed an expert board to make independent investment decisions backed by evidence, and very soon we'll be publicly laying out broad expectations on how that money should be invested through our investment mandate we'll be releasing very soon, and that mandate will make clear which areas should be prioritised, the sort of outcomes we want to see, and the rate of return we hope to achieve.

We aren't marking anyone's homework. This is a truly independent corporation and board, and we   but we have to be pulling in the same direction, investing in areas that matter most.  When the investment mandate is made public the board will be able to get down to the business of investing in our future capacity.

We've got a number of big challenges. Broadly speaking, as I said earlier, we need to value add more to deepen our economic complexity, we need to dilute our dependence on concentrated broken supply chains.

We also need to lean in and get to net zero as quickly as we possibly can. That is a big job, because if we do it right, we can create a lot of jobs in the process and using Australian know how and applying the will and the wherewithal of Australian industries is a big priority for me in my portfolio, making great Australian products and providing great Australian jobs.

There are many areas of expertise in Australia where we need to continue growing into good businesses, from quantum to, to MedTech, AgriTech, and also the environmental and low emissions technology space.

So when I talk about all those challenges, this gives a sense of purpose to what we're doing, dealing with the value add, dealing with the supply chain issues, dealing with net zero; the purpose, the supply, the way the policy is shaped.

And I'll give you an example: we have in this country 50 per cent of the world's critical minerals, and yet we only make 1 per cent, 1 per cent of its batteries. We've got a big job to do. Indeed, with cutting edge breakthroughs in battery research, Australia's got a window of opportunity to become a key player in battery manufacturing, making more for what mine here.

The potential for Australia for battery manufacture is simply immense. By 2030, according to research by the Future of Battery Industries, CRC, thank you, Shannon, Australian diverse battery manufacturing industry could contribute nearly $17 billion a year to our economy and create more than 60,000 jobs.

We've got a strong track record in battery innovation. We've got firms here whose work has been picked up by countries elsewhere, think of Redflow, for example, who just scored big contracts in the US. We've got others that are working, not just with the vanadium, but in bromide, Gelion, in Western Sydney, Energy Renaissance, up in the Hunter, importantly providing that type of ground breaking work in our regions and opening up economic and employment opportunity.

Australia again, it should be pointed out, we invented the vanadium flow battery, and that will now become a high potential mainstream battery technology. We need to build this up if we want to meet the other objective of grid stabilisation, levering off the other great thing we do, which is generating power through solar energy, which is another thing that was kicked off by an Australian who came up with the technology for solar in the first place, before someone else decided it was an even better idea to manufacture in [indistinct] elsewhere, and these are some of the things that are motivating in a policy sense right now.

So we're working to deliver an Australian made battery plant. That strategy, and we'll also through that see the establishment of our nearly $15 million power in Australia Industry Growth Centre, which will involving partnering to the Australian Government, for Australia to establish an Australian made battery precinct to bring together industry, academia and the community to bolster Australia's manufacturing capability and support industry growth.

All these measures will kick start, I think, a deeper engagement by this country in the battery value chain, drive productivity improvements in industry, create more jobs for Australians and greater wealth for the nation.

Now I want to finish by touching on the importance of cooperation and collaboration. It's a key reason why we're all here today. Effective collaboration between researchers, businesses and Government and by leaders, all of you present here today, are going to unlock our full potential.

We're working to better connect researchers in industry, including researchers from our world class universities. There are measures like the Cooperative Research Centres Program, Australia's Economic Accelerator, Trailblazers University Program, National Industry PhD Programs, Start Up Your Initiative, to name but a few, and also coming up is the release of our National Science and Research Priorities, again to give further guidance. I want to recognise and acknowledge the work of our Chief Scientist in leading that body of work as well.

By working together we can achieve commercialisation outcomes, drive productivity growth, create new jobs now and into the future, but more importantly, reinvigorate belief, faith in our know how, in our ideas. Thank you for your time today, and more importantly thank you for what you're doing for our country.