Innovation and Skills for Australia in the Asian century

Humans are biologically designed to be curious. I see it daily in my two-year-old son. He’s constantly discovering new things he can do. He learns by trial and error. The same can be said of adults, we learn by tinkering.

If Australia wants to continue to be a prosperous country with improved living standards then we need to start tinkering. We must make sure we’re a knowledge economy that creates things that the billions of people in Asia desire. That means more than digging up iron ore. This will require government policies that promote and nurture tinkering.

I recently came across Flow Hive created by two Northern Rivers backyard beekeepers who were determined to find a simpler way to harvest honey. It’s a great story with global potential. But the local Brisbane factory won’t be able to supply the demand so they are looking overseas to supplement the fabrication. It’s a shame because there isn’t any reason why we can’t manufacture to scale.

Research and Development (R&D) in many regards defines tinkering and what it means to be a knowledge economy.

Which is why the Abbott government decision to cut $400 million in one year to the government’s Science, Research and Innovation budget is intergenerational theft. Of this $340 million will be cut from programs that encourage R&D.

But that’s just the beginning. Add to this the Research & Development Tax Incentive has been reduced by $550 million. This will place Australian companies at a competitive disadvantage and weakens our attractiveness for R&D when we need it most.

Over four years, funding to the CSIRO will be cut by $111 million. This will result in 500 jobs being made redundant. The budget cut and loss of experienced staff will significantly weaken the ability of the CSIRO and with it Australia’s R&D abilities. The likely result will be a brain drain as scientist look overseas for work, diminishing our long-term economic capacity. More than ever we need people with skills in Science, Technology, Engineering and Maths.

Some 16,000 kilometers away, Switzerland has been found to be the most competitive country to do business according to the World Economic Forum. Innovation was a key reason in achieving the top spot. Swiss companies have a high level of R&D and a strong link with universities and research organisations. Further, its government provides generous incentives for R&D to flourish. Given the current policy framework it’s no wonder we’ve fallen further behind.

In a failed attempt by the Abbott government to introduce austerity they not only targeted those least able to afford it but cut from a part of the budget that contributes the most to the long-term prosperity of our economy.

You only have to look at the ham-fisted approach to ending industry welfare in the auto-industry. It’s one thing to say you’re ending corporate welfare but you need a plan. In this case it had none. It would have been better presenting an end to the auto-industry by transitioning to some other advanced technology so the skills weren’t being lost.

The auto-industry is the main conduit for the introduction into Australia of advanced technology and the training of labour in the necessary skills. According to the National Institute for Economic and Industry Research the closure of car manufacturing could cost Australia nearly 200,000 jobs and $29 billion in lost economic output.

Not only does this represent the largest hollowing out of our economy but once those skills are lost, they’re lost forever. Where are the government policies to provide incentives for advanced technologies to flourish and pick up the slack in preparation.

This government had no plan, other than ending corporate welfare. But has it? As Richard Denniss claims the fuel tax credit scheme is an almost A$6 billion subsidy each year to industry, with the majority going to the mining industry. BHP posted an 83 per cent jump in first-half net profit to $US8.1 billion. If the Abbott government is genuine about the age of entitlement being over, and the age of personal responsibility beginning, then surely the same sentiment applies to all businesses.

I’m not against industry assistance per se. If we accept the premise we need to do more with less then giving billions towards the mining industry doesn’t represent value for money to the long-term prosperity of our economy?

The long-term prosperity of Australia is a combination of industries where we have a competitive advantage, like mining, but it’s also about having the vision to commit to industries in their infancy. Finland did it with telecommunications, Germany did with solar technology and Japan with electronics.

As Dr Jim Chalmers MP writing for the Drum said “a recent Pew research report paint a brighter picture, surveying thousands of experts and concluding technological change can create more opportunities than it destroys but only if we get the education and training settings right to equip people for “skills-biased” work into the future.

I completely agree with Jim, we do need to have a conversation about the type of economy we want in the future, the role of technological change, pre-empting disruptive new players and the policies we need to enact today to keep our workforce ahead.

While my two-year-old son is content to play with toy garbage trucks and diggers I hope the politicians of today are planning for a future where my son has the opportunity to be tinkering at the forefront of robotics, automation and artificial intelligence because of sound policy decisions taken today.

About Polo Guilbert-Wright

Polo Guilbert-Wright

Polo Guilbert-Wright is a graduate of public policy from the London School of Economics. Between 2005-07 he worked as a policy and later a media adviser to a number of NSW Ministers. In 2007 he moved to London where he worked for a global public affairs consultancy before becoming a media adviser in the UK Home Office, responsible for immigration, security, and law and order. Since returning to Australia in 2012 he has been working for a leading trade union. He holds a BA/LLB from the University of NSW and tweets @pologuilbert

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