Just a year ago, the Industry Innovation and Competitiveness Agenda (IICA), and before that the Powering Ideas innovation agenda from the previous Labor Government, had a very similar overall message:
Australia's innovation system needs to become more efficient for Australia to remain competitive.
Numerous assessments of our economy have shown that our considerable investments in knowledge generation and the training of a highly skilled workforce result in too few new-to-the-world products, notably advanced technology.*
A major review in 2008 chaired by Dr Terry Cutler concluded that Australia is not making the most of its potential.
Also in 2008, former Minister for Innovation Senator Kim Carr wrote in an ARDR opinion piece 'Innovation at a crossroad':
"The Australian innovation story is a tale of lonely heroes battling against the odds. We have our Nobel laureates, our world-beating inventions, our individual success stories. What we do not have is a broad culture of innovation. It's time to change that."
That was in 2008, the insight was there, now we have the end of 2015 and so little has changed.
In our previous dossier Reinventing the nation, we highlighted the complexity of Australia's innovation system, with many factors contributing to Australia's less optimal innovation performance.
Analysing the 2014 Global Innovation Index (GII) report, we then concluded:
"From the list of the ten best performing countries in the GII ranking, it cannot be ignored that most - including the seven European countries and the US - have developed a culture for innovation over a long time, and this is likely to have translated into business practices that are conducive for driving new ideas to the market."
The need for cultural change is indeed one of the key messages of the government's new agenda and there is now also a sense of urgency, triggered by the end of the mining boom.
Hence a flurry of reports and intiatives released just over recent months, which above all show that there is no simple answer to Australia's innovation woes and that change will require a comprehensive, whole-of-systems approach.
However, in the onset of this review it is worthwhile to note that Australia's current discussion about innovation follows a rather narrow perception of what defines it.
Thus, the Global Innovation Index 2014 report concludes that todays view of innovation capability has superceded a previous understanding that focused on R&D-based technological product innovation. Now it "is seen more as the ability to exploit new technological combinations; it embraces the notion of incremental innovation and 'innovation without research'".
Also, there can be no question that boosting STEM literacy across society is important, but amid the current push for more prominence of STEM subjects in our school it should not be overlooked that proficiency in STEM related fields alone does not create entrepreneurialism.
Again, the 2014 GII report authors Richard Scott and Stephan Vincent-Lancrin from the OECD Directorate for Education and Skills note:
"Education systems that narrowly focus on test-based academic performance and numbers of students enrolled in science and technology subjects are not neccessarily those that will produce young people with the creativity, critical thinking, and communication skills that innovative societies require."
In October, Australia's chief scientist Professor Ian Chubb released Boosting high-impact entrepreneurship in Australia.
The report urged government, the university sector and industry to come together to bring about a transformation in which high-growth, technology-based businesses become a driving force behind Australia's economy.
A lack of cultural support for high-impact entrepreneurship in Australia was identified as one of the biggest obstacles to producing more entrepreneurs.
Importantly, most universities do not see producing entrepreneurs as a major part of their role.
The picture is not all bleak, though. As the report shows, universities increasingly put in place programs that expose students to high-impact entrepreneurship and support them as they form startups.
Some universities have created dedicated centres to act as the focal point of their entrepreneurship activities, such as Flinders University with their New Venture Institute or the iAccelerate business incubator at the University of Wollongong.
However, Australian universities come late to the party, and there is much catching-up to do with global leaders the likes of Stanford and MIT.
The general message of how important entrepreneurial activity is for the Australian economy was reinforced in the sixth installment of the Australian Innovation Systems report, released in November.
It shows that between 2006 and 2011, less than two-year old startups added 1.44 million full time jobs to the economy, while all other firms shed 400,000.
Notably, just 3.2% of all micro-startups (less than 10 employees) accounted for 77% of gross job creation by surviving micro-startups, and they more than compensated for the jobs lost by exiting micro-startups.
Generally, the framework conditions for innovation in Australia are relatively good by international standards.
The report found that 13.1% of the Australian adult population engaged in entrepreneurial activity in 2014, which is amongst the highest in the OECD, although Australia's entrepreneurialism tends to concentrate in the major metropolitan areas , especially Sydney and Melbourne.
The inherent danger here is, though, that these statistics fail to discriminate between high-impact entrepreneurship and other types of entrepreneurship.
And failing to make this clear distinction "can dilute impact and create confusion about objectives", the Boosting high-impact entrepreneurship in Australia warns.
Our universities are an obvious breeding ground for ideas that can flow into high-impact entrepreneurship. But according to the chief scientist's report, the way university funding is allocated in Australia, it discourages academics from pursuing applied research and commercial proof-of-concept work that will not be rewarded with publications.
The government has begun to look into this, with the ARC's Excellence in Research in Australia (ERA) just one possible mechanism to change the behaviour of academics.
In its NISA it has already foreshadowed that in future university funding arrangements will equally emphasise academic achievement and engagement with industry.
However, even if Australia's universities step up in generating high-impact entrepreneurs, for innovative start-ups then to survive in Australia there are signficant barriers to overcome.
According to the Innovation Systems report, the greatest barrier to innovation for all young SMEs aged up to four years remains lack of access to additional funds, followed by the lack of skilled people.
A series of initiatives detailed in the NISA try to address this. Measures to improve access to capital include the Crowd-sourced equity funding scheme, changes to venture capital limited partnerships, and the $200 million CSIRO Innovation Fund.
There are also initiatives targeting skills, including a $51 million package to lift digital literacy in schools, and changes to the visa system designed to attract skills to Australia.
The government's new innovation agenda also includes significant measures to ease the threat of bankruptcy, for example by reducing the current default bankruptcy period from three years to one year.
This is to ease the 'fear of failure' that may hold back many potential entrepreneurs.
According to the Innovation Systems report, 39.2% of Australians aged 18 to 64 have a 'fear of failure', which is slightly higher than the average for developed economies.
This is indeed much higher than the US (29.7%), but comparable with other countries deemed far more innovative than Australia, for example the UK (36.8%).
And while the focus of the NISA is very much on stimulating the formation and growth of startups, there is another side to the innovation coin that seems to get less attention.
A general hesitation to take risks is not just a problem at the startup level, it is an expression of a cultural conservatism that pervades all of Australian society, as is also noted in the chief scientist's report.
It recounts futurist and author Paul Wallbank, who suggested that in Australia Bill Gates would have been encouraged to pursue a 'safe' career as a lawyer, and his investments most likely would have ended up in property instead of endeavours more beneficial to society.
It is a mindset that appears to be mirrored in the leadership of our corporate world, where very few scientists enter higher managerial ranks.
In 'Of leaders and laggers' we refer to a study by the University of Melbourne and the Australian Institute of Management from 2013, according to which the three main barriers to innovation are all leadership related:
The study found that innovation performance correlates to the 'intangible capital' of organisations, which include:
Supporting this, a key message of the 2014 General Electric (GE) Global Innovation Barometer is that "Australian business leaders are risk-adverse and struggle with responding to an ever-changing global environment."
But as emphasised in the GII 2014 report, a broader cultural change that can infect all facets of the innovation system requires to instill creativity, critical thinking, and communication skills in the education system.
It should be mentioned here that initiatives such as pursued by Flinders University's Centre for Science Eduction in the 21st Century under the leadership of Professor Martin Westwell, are indeed advocating a more creative, less benchmark oriented approach to teaching STEM subjects in Australia.
Poor leadership stifling innovation is also an issue in the political sphere.
The Innovation Systems report series was initiated with the release of Powering Ideas in 2008, and was to follow the progress of the implemented policies.
However, most of those policies are now again on the scrapheap of history, replaced by new ones with similar intentions. What this lays bare is maybe the main weakness in our system: the lack of policy continuity.
A few weeks ago, the Australian Council of Learned Academies released a country by country comparison of how research can be translated effectively into economic and social benefit.
The report's main message is:
"To be fully effective, policies and programs to encourage increased research translation need to be part of a stable national innovation strategy and, importantly, need to be administered by an independent agency."
Ideally, this agency should operate at arm's length from government.
And, "the establishment of a national innovation strategy and an implementation agency needs bipartisan support."
In essence, much of Australia's innovation problem is rooted in the polarised nature of politics, and the often fragmented practice of policy implementation, which over the past ten years has occurred in a "piecemeal manner", and involved a number of state and Commonwealth agencies offering very modest funding.
Even the lead up to the new innovation agenda triggered partisan plays, with the opposition releasing its own innovation paper just four days prior to that of the government.
The good news is that the general direction of the opposition's plan is similar to that of the government's, with its measure's including:
It nevertheless gives weight to the argument that Australia needs an independent body coordinating the implementation of a coherent strategy.
The new agenda takes a step towards bringing issues related to the innovation system closer to political decision-making by elevating the advisory body Innovation Australia to cabinet level (rebadged as Innovation and Science Australia).
This move has been strongly endorsed by key bodies, such as Science & Technology Australia, whose chief executive officer Catriona Jackson said in an opinon piece published in The Guardian:
"The creation of an innovation and science committee of federal cabinet is important. It is the first time a committee of the federal cabinet has been dedicated to science and innovation, taking its place alongside issues like national security.
The creation of such a council is a significant shift - a sign of long-term political intent. A real sign that a culture change is taking place inside government, just as the prime minister would have it in the outside world. The government is walking the walk, as well as talking the talk, on this and other initiatives."
But while the body has an elevated status, the government has shied away from setting up a truely independent body responsible for implementing a coherent and long-term innovation and science agenda.
Still, the new commitment by the government to not only get the general framework right for innovation but to be an active facilitator of change towards a more innovative and entrepreneurial culture is to be applauded.
As the previous IICA, the NISA is narrowly directed at commercial outputs, but in the breadth of its initiatives there is a whole-of-(innovation)-systems approach.
However, it should only be first step towards change that has to reach across all parts of society if we really are to take on the most creative and innovative societies.