Speech at the National Innovation Policy Forum

Well, thank you very much, Jane.

Thank you very much, and good morning, everybody.

It's so good to see all your bright, shiny, happy faces a little bit after 8 o'clock on a Tuesday morning in a sitting week.

I can tell you, I also want to acknowledge the Ngunnawal people as the Traditional Owners of the land on which we meet today, and pay respect to Elders past and present.

I acknowledge my parliamentary colleague Aaron Violi.

Aaron, it's very good to see you here.

Chief Scientist Tony Haymet, Australian of the Year, Katherine Bennell-Pegg, and Jane.

I really enjoyed listening to that message from Catherine Livingstone and David Thodey, I couldn't agree more.

And the kind of sentiment that sits behind that about thinking about how the system works and getting the institutions right, getting institutional arrangements right so that they deliver for the country is one of the things that drives my thinking on these questions and will require long-term attention in the national interest.

Jane, thank you, and thank you to the team at Cooperative Research Australia for inviting me to speak for the third time.

You're not sick of it yet, we'll see how we go for time four next year. 

This is Jane's final event as the Chief Executive Officer before she joins the Australian Academy of Technological Sciences and Engineering later this year.

Thank you, Jane.

It's been a remarkable contribution for Australia, for the research and innovation sector, and I know that you will continue to do the same at ATSE, which plays an equally important role in the system.

I just love the theme of this “built here”.

Really, that is squarely what the country needs from you right now.

It goes to, I think, the particular productivity challenge.

The Intergenerational Report, which if you haven't got around to, and you're a little bit more awake this evening than you wanted to be, you could tuck into the Intergenerational Report.

It does identify the drivers of slower productivity growth in Australia, really since the early 2000.

Diminishing returns from earlier technological waves.

Slower diffusion of innovation across our firms.

Weaker global growth in physical and human capital.

Declining business dynamism.

Smaller gains from globalisation.

That is the kind of language that you expect to see in a report developed by a group of economists.

I can tell you that in my working life as a trade union official in manufacturing and engineering across Australia, perhaps in a more colloquial way, I've seen this play out in declining firm size, deindustrialisation, falls in management capability, and in the loss of high-intensity research and development firms.

Global car makers, for example, like Ford and Holden, spread their technology, their production innovation, and their management capability through the Australian economy.

When they left, thanks to Abbott and Turnbull and Morrison governments, a lot of that went with them, but there remains many firms like them still in the Australian economy, but not enough.

Not enough.

Big firms at the frontier of industry matter for two reasons.

The first, of course, is scale.

Large firms are just 0.2% of Australian businesses, but they produce around 44% of industry value.

You lift their productivity and their innovation, and you lift the national number.

But the second reason is how they connect with the smaller firms around them through supply chains.

Where they set the standards for quality, delivery, and innovation systems through skilled people who move on and take their knowledge with them.

Through shared knowledge, joint research, training apprentices, and training graduates – but that's how diffusion happens.

And mid-sized firms are the main route through which big firm practices reach the rest of the economy.

Firms at the frontier of industry do more than lead.

They create a ladder for smaller companies to climb, helping to grow Australia's missing middle and providing an avenue for which to inspire.

It's about diffusion and it's about aspiration too.

I see my contribution as Industry Minister and Minister for Science in this area as twofold.

First, to reindustrialise the Australian economy, to build more large firms, more research and development intensive firms, and turn more Australian inventions and IP into real businesses and real jobs.

Second, to get new technologies and the research that sits behind them embedded in companies across Australia for more efficient production and more goods and services built here.

Future Made in Australia is about using Australian energy, Australian resources, skills, people, technology, and knowledge to build a more resilient economy.

Recently, I was in Perth announcing a $120 million National Reconstruction Fund investment in Built Living.

Built Living is a joint venture established between two of Australia's largest companies, Wesfarmers and the construction group Built.

With that loan helping it scale, Built Living will expand modular housing production using advanced manufacturing methods into unit construction, making apartments, moving more of the construction process into a controlled factory environment.

Producing components for more than 2000 apartments every year, and delivering them up to 50 per cent faster and up to 20 per cent cheaper than traditional construction.

This matters beyond one factory or one business.

By working at the forefront of modular housing in Australia, Built Living sets the pathway for others and will drive productivity reform in large and small Australian construction firms.

In 2025, the Productivity Commission produced research that showed that since 1990, overall labour productivity in Australia has lifted by 49%, but housing productivity has fallen by 12%.

All OECD economies show the same stubborn stagnation amongst housing and construction firms.

In the United States it is much, much worse.

New modern construction methods entering our construction sector should be drivers of more competition, more growth, lifting productivity and innovation, and delivering better jobs.

When it comes to technological diffusion across our country, it doesn't happen by flicking a switch.

It happens because of the guts and smarts and determination of real people experimenting, testing, and applying technology to solve challenges.

Australian scientists and researchers do this work every day.

The Cooperative Research Centre (CRC) Program is a 35-year-old Hawke Labor Government legacy that is key to this for Australia and Australians, harnessing the efforts of large firms and researchers, and clusters of firms to work on big, shared problems.

The newest, the Critical Metals for Critical Industry CRC is developing next-generation refining and recovery technologies for key critical minerals and accelerating the capability to commercialise them here in Australia, capturing more of the value of Australian critical minerals for Australia's economy, building a stronger Australia.

In 1987, the economist Bob Solow famously remarked that “you can see the computer age everywhere, except in the productivity statistics”.

In an age of artificial intelligence, quantum computing, and advanced manufacturing, Australia's productivity challenge is not simply about pushing the frontier of innovation further, it's about spreading the benefits of new technology across our whole economy.

Hosting AI training matters for Australian innovation, for Australian growth and productivity, as well as for our national security and our national resilience.

Building, shaping, and developing AI models here, governed by our laws and norms, mean that we build Australian capability too.

The technical expertise, policy and safety expertise.

Driving smart and safe AI adoption.

Over time, this would build an Australian AI ecosystem that creates opportunities for our firms and for our economy.

More artificial intelligence embodied in manufacturing processes, robotics, and drone technology, and in the systems that underpin the delivery of our industrial goods and services.

Building at the frontier, while also translating that work to the thousands of firms, particularly industrial firms across the economy.

The Albanese Government's AI adopt centres are important.

Take ARM Hub in Brisbane.

Roy Green is here, there may be other people from ARM Hub around the place in the Press Club today too.

It translates artificial intelligence and robotics knowledge for smaller firms.

It’s recently worked with more than 300 small to medium firms over 18 months from Echuca to Gladstone.

Its focus is industrial artificial intelligence, AI applied the physical work, to production processes, and to a firm's own operational data.

The report that they have recently released, that I can't for the life of me remember the name of, Roy?

It's called Turning AI into Productivity.

Thank you, Roy.

Give him a round of applause.

It really is worth the read because it does bring to life industrial artificial intelligence and what that can deliver for our manufacturing sector.

Again, the CRCs will play a vital role here, and you already are driving AI growth and commercialisation.

I look forward to launching the $50 million AI Accelerator as part of the CRC program in early 2027, and announcing the outcomes of Round 19 of the smaller CRC Projects AI Accelerator funding pool before then.

This is critical to diffusion in the real economy.

Industrial and technology policy as the transmission mechanism to make sure that AI adoption drives industrial investment, productivity growth, and good jobs.

New innovations don't spread through our economy by accident.

It's not simply the advent of artificial intelligence that will drive productivity and growth and innovation in the economy.

That is the job of smart industrial policy, and research and development policies, and the work that you do and your colleagues do every day.

They spread when researchers and business investors and governments work together to translate discovery into commercial application.

That's why institutions such as Cooperative Research Australia and CRCs, and why the industrial technology work in my portfolio is so important.

They help bridge the gap between discovery and deployment.

They connect researchers with industry and help ensure that Australian ideas become Australian products, businesses, and good Australian jobs.

For every dollar that we invest into our CRCs, public and private, we derive a $7.73 economic output.

That is a good thing.

That is a good thing.

The Government's goal here is simple.

To build an innovation system that is better at turning research into commercial outcomes, and better at spreading those outcomes throughout our economy.

To lift national productivity and this national innovation, and to build an Australia with more opportunity, more quality jobs, more national prosperity, and an economy that is stronger and more resilient in the uncertain times that lie ahead.

Thanks very much, and I hope the rest of the day goes really well.

Thank you.