Not Just Oz!

The UK is also looking at the area of innovation. I found this resource recently, which will probably trigger some interesting connections for the Cutler Review. Here's a taste:

So while traditionally the UK's innovation policy has been concentrated on high-tech manufacturing, the White Paper now argues that increasingly innovation applies to a wider range of products, services, business processes, models, marketing and enabling technologies.

This has led the UK government has ditched [sic] the simplistic view of innovation as a disengaged process of investment in fundamental research leading to commercialisation by industry. Now it recognises that innovation draws on a wide variety of sources and is driven as much by demand as by supply. The insights generated by basic science may be critical to long-term innovation performance but the path they follow from the laboratory to the marketplace is long, complex and uncertain.

The core idea in this passage, that "innovation" actually connects really well with the protracted, risky and uncertain technology adoption process is key (ada diffusion). This type of activity is what is so well sustained by the R&D tax concession, and why it is a critical plank of the National Innovation System.

Beyond that, it's why encouraging collaboration between Universities and other research intensive organisations is also a great idea. Perhaps it's time for a more generous tax concession for this type of activity?

And that throws up another question: instead of talking about the rate of deduction, which fluctuates with the tax rate, we should be engaging in discussions and debate about the level of support for R&D. For instance should it be 10 cents in the dollar; 20 cents in the dollar; 50 cents in the dollar, 75 cents in the dollar or more?

What do you think?

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Addendum
You can download the UK report here: http://dius.dialoguebydesign.net/default.asp

MJA to host Hargraves Member Forum on R&D Tax Concession

MJA is hosting a member forum for the Hargraves Institute on Tax Concessions for Research & Development, Tuesday 8th April 2008.

Here is the promotional information...

Research & Development Tax Concession.
Currently Undergoing
Re-Construction.

Have your Say.

The Federal Government's National Innovation Review has singled out the R&D Tax Concession for specific attention. A separate working group has been appointed to help reform the program so that it is simpler to use and more effective for business.

Former chair of the Industry Research and Development Board's R&D Tax Concession Committee and a key member in the working group, Laurie Hammond, will address Hargraves members about the details of the review. You will learn how the voice of your company may be most effectively heard in this crucial exercise.

Facilitated by Laurie Hammond, iQ Capital Management Pty Ltd.

This Forum is ideally suited to those within your organisation who are responsible for Tax and/or Research and Development. Please forward to the appropriate contacts and ask them to register.

Which International Experts Should Assist The Review?

Tucked away on the home page; presented as almost a footnote, is the announcement that the review panel will be supported by the involvement of international experts.

Putting Australia's tendency deify (or at least ascribe disproportionate weight to) outside experts for answers to these types of issues, who do you think would most contribute to this debate?

As the panel already has strong relevant academic qualification, you will probably guess that our emphasis is on seasoned industrial and business innovators, rather than solely academic paragons.

But, over to you, who do you think it should be? Let us know in a comment or in an email...

Innovation - A Fringe Activity?

One of the observations frequently made in discussions about innovation is that it is a fringe activity: an activity undertaken by entrepreneurs, creative types, the marketing department or the boffins in R&D.

This mirrors the complaint we hear so often from companies, "How do we make our organisation more innovative?" It's what organisations like the Hargraves Institute seek to address through networking groups of members with similar challenges. In fact, the ideal of a culture of innovation, spoken to by organisations like MYOB in the recent Hargraves Institute conference, requires systematic issues identification, leadership and change management. As far as London Business School academic and author Gary Hamel is concerned, achieving this all-pervasive innovation culture could actually require a fundamental change to the nature of management (The Future of Management).

Indeed, the entire topic of Management Innovation is still so new that Hamel points out that there are only few journal articles on this type of innovation. If, in fact, Hamel is correct, and management innovation yields lasting competitive advantage that is superior to that of strategic innovation, product/service innovation or operational innovation, surely part of the discussion in the context of our National Innovation System should address the types of resources, models and experimentation that is possible in management innovation.

Here are some questions to ponder:

1. What would it be like if the National Innovation System encouraged experimentation around management innovation?
2. If true management innovation could be achieved, would operational, product/service and strategic innovation increase by necessity to keep pace with management innovation?
3. Is Hamel's model of four types of innovation too simplistic or too sophisticated to be helpful in our analysis of Australia's National Innovation System?
4. Where does this concept of management innovation fit with our generally technological bias to government intervention in innovation?

Comments welcome :)

R&D Tax Working Group?

The Expert Panel of the National Innovation System Review has met and documented their meeting here; they have made a couple of very interesting observations.

First, they have identified that there is a large body of existing work that exits in this area, most notably the controversial Productivity Commission report on public support for science and innovation of March 2007 (which can be found here), as well as PMSEIC Reports and Parliamentary Inquiries (presumably past departmental studies on the R&D tax concession "new" program elements and the inducement of R&D activity will be included). Importantly, they have flagged that the Panel has agreed to the structure of an Issues Paper, and foreshadowed that there may also be a video on the topic.

This will be important for stakeholders wishing to make a submission to the Review in order to meet the request of the chair; namely that submissions be "stimulate fresh, forward-looking views and ideas to the review."

Also noted in the output of the expert group was:

The Panel noted that membership had been finalised for the Inter-Governmental Working Group and the Collaboration and CRC Review Working Group. It noted the role of the Working Groups is to feed into the main Review, and only one report will be prepared. It noted that membership for the Tax and R&D Tax Review Working Group is being finalised. [Emphasis supplied]

Presumably this means that the specific area of the R&D tax concession will have a separate or specific member group - perhaps including representatives from industry, Innovation Australia, the ATO or beyond. Any opportunity for representation from specialist consultants in this field would also be important, as they can bring deep knowledge of the practical dimensions of R&D tax to the review.

What other factors are going to be important in the shape of the review? Apart from the CRC's and R&D tax, what other dimensions of the national innovation system are in need of specialist attention and review? Please put your views in a comment below.