- Resource industries
- Space and Astronomy
- Finance and Risk Management
- Marine Industries
Does anyone else find this list interesting?
The industries selecting are a fascinating set of priorities for the nation. Cutler has avoided selecting industries such as software, pharmaceuticals, biotechnology, transport or manufacturing per se. Areas like engineering and software are included in the priority areas by implication, but only to the extend that they are connected to those industries, as supporting or service providers.
Why were these industries selected?
According to the report, these industries were selected on the factors of geography, economy and capabilities, but also because theye are:
"areas whereby public innovation could spillover into complementary private sector innovative efforts"
Venturous Australia goes on to highlight that it was also important that these priorities are areas where
"government stimulus can increase the returns to private innovative activity; specifically, activity that will lead to globally tradeable goods and services."
Resource industries
It is very easy in the context of the current mining and resources boom to understand that this is an innovation priority. And our track record of researching, developing, commercialising and exporting the types of knowledge and processes that are essential for the resources sector is fairly well understood.
Space and Astronomy
The Space and Astronomy industry is a little more surprising to me, and the reasoning seems to be dominated by the geographic conditions and location we have been blessed with (eg for monitoring and surveillance), our bid for the Square Kilometre Array and interest in accessing satellite based monitoring and sensing capabilities (eg for agriculture, water, etc). The final reason given seems a little defensive:
Australia has little involvement in the satellite infrastructure to support these strategic areas of application deployments based on satellite facilities. This is a putative area for more significant international collaborations.
which does not appear to link well with the rationale for involvement in some of these areas, but I guess the factor is relevant.
Financial and Risk Management
A particularly relevant topic given the current market gyrations, the selection of this industry is particularly important and, I think, sound if we are addressing "innovation". As the pool of funds in the Future Funds and Superannuation involves direct management and represents savings this will be very relevant. Moreover, having heard David Murray speak at some length about the work involved in running a custom operating environment on some of the Commonwealth Bank's server infrastructure that puzzled even the experts from IBM, I suspect that there is probably more great work going on in these institutions than ever sees the light of day.
Marine industries
Finally, as we are a "land girt by sea" and actively involved in marine tourism, offshore oil and gas, shipping, fishing, aquaculture and maritime logistics, and beginning to operate in the seafloor mining industry, this area has natural relevance. Again, there appears to be something of a disconnect with the rationale for these areas as the Report notes:
Submissions and roundtable discussions during this Review support an argument that Australia’s investment in marine research and maritime industries is underweight.
And, So What?
It is surprising to me that agriculture, software services, some aspects of biotechnology and even retail (as we're talking innovation) did not feature in the list of industries. Furthermore, the rationale for the selection of these industries is open to criticism and critique by many vested interests, but also on its assumptions. These industries are largely convenient. They represent current strengths. They naturally engage other industries and establish their own markets for the creation of knowledge and innovation and the distribution of capital. As such the recommended investment in these ares as "National Innovation Priorities" seems defensive in nature.
This is not a bold new investment, or vision, or statement of what Australia can be in years to come.
This is is a reflection of where we are now.
What is really interesting is that these priorities seem disconnected from other recommendations in Venturous Australia Report: with the exception of some grants (to which I will return in my next post), the R&D tax credit recommends removing support from some large-scale activities in the resources sector, which are short sighted. Major commercialisation and new technologies (such as CSIRO's smelting technologies and the work Rio Tinto has put into HiSmelt) are of fundamental and systemic importance to the resources sector and our future prosperity.
On one hand the Report encourages the Financial and Risk Management industry as a National Research Priority, and on the other fails to recommend the removal of a powerful distortion in the current R&D tax concession around the "multiple sale" test for software. This is a clear disconnect.
Unfortunately, the more time I spend with this report the clearer it is that it was written by a committee in separate chapters. There are disconnected threads, an absence of compelling and coherent themes and probably a recognition that many readers would not make it past the Executive Summary.
All of this will be problematic when it comes time to respond, as government is left with the choice of either reinforcing the realities of our present economy by adopting these priorities, or striking out with a vision of its own that is not supported by the Venturous Australia Report.
As I've said before, it's going to be a very interesting journey from here to policy.
Are you along for the ride?
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