Speaking without notes, and with complete confidence in his subject matter, newly minted Assistant Minister for Innovation Wyatt Roy told attendees at the inaugural FSTGov conference in Canberra on 17 November that all elements of Australian society must embrace technology disruption and globalisation which are occurring at a ‘rate we cannot imagine’.
While it might be natural to face such change with fear, he said, “we need to make change our friend and use it to position the Australian economy to continue its unprecedented 25 years of economic growth.
“We are in a market of one billion people coming into the middle class in Asia,” he said. “This presents an enormous services market, and the new Free Trade Agreement with China presents a tremendous opportunity, putting Australia in a hugely advantageous position relative to many other countries.”
Our market for innovators is not the 24 million Australians, but the world, he said, citing Atlassian, Cochlear and Seek as global successes.
“We are at an inflexion point,” he told the audience.
Roy envisages an Australian ecosystem for innovation that reflects something uniquely Australian – not ‘a copy of Silicon Valley or Israel.’
However with 20,000 Australians working in Silicon Valley, the challenge for Australia to hold onto businesses and talent is significant. The high cost of living and hiring, the small size of the local market, and the state of the local venture capital industry are often cited as roadblocks for developing the local industry.
While innovators can pick anywhere in the world to live, Roy told attendees he would like Australia to be a prime choice for lifestyle and opportunity reasons.
A positive of our culture is our anti-authoritarianism – this allows us to challenge and think differently, but our inability to celebrate success was an aspect of our culture that desirably should change, according to Roy.
Roy told the audience that ‘more money was spent on the Melbourne Cup than on innovation but that we don’t need new capital – the capital invested in property could be unlocked for innovation investment.
Industry group Australian Private Equity and Venture Capital Association (AVCAL) found that in 2014-15 investments in ICT made up two thirds of all venture capital investments, with private equity and venture capital investments rising by 32 per cent from 2013-14 to 2014-15.
Nevertheless, Australia’s venture capital industry is much smaller than comparable countries – for example, it is a quarter the size of Canada’s on a per capita basis.
There will be more collaboration between government, higher education, science and corporations on the commercialisation of research in the future, said Roy.
More attention would also be given to teaching of science, technology, engineering and math (STEM), as well as to digital technology and to entrepreneurial skill sets, Roy said.
The Government has already allocated $12 million to its ‘Restoring the focus on STEM in schools’ initiative, which seeks to motivate students to choose STEM subjects in schools. Features of the program include providing mathematics curriculum resources to year 10 students and encouraging take up of coding in schools.
Roy also said that the Government can act as an exemplar, with “the Digital Transformation Office (DTO) is a most exciting area of public policy transformation.”
This echoes the Prime Minister’s recent comments that the most important thing a government can do to encourage an innovative economy is to lead by example: “because everyone is engaging with government all the time, they will see the power of the government’s digital engagement and they will then emulate it and copy it in their own lives and in their own work.”
Roy also cited the CSIRO and NICTA coming together as Data61 as another example of how his Government was encouraging and supporting innovation. (The name was chosen because 61 is Australia's international calling code, signifying a globally-based mindset for the new organisation)
“Having a single national organisation will enable Data61 to produce focused research that will deliver strong economic returns and ensure that Australia remains at the forefront of digital innovation,” said Prime Minister Turnbull when announcing the merger as Communications Minister.
Roy also told attendees that the challenge for improving the commercialisation of research had been paraphrased to him as being that “innovators and entrepreneurs are great at solving problems – but because they have no market power, they do not know what problems need solving the most. On the other hand, governments are good at identifying problems, because of their market power – but hopeless at problem solving.”
Recent Government-led attempts to bring innovators, entrepreneurs and the public service together include the Policy Hack event which took place in Sydney in October 2015. Hosted by BlueChilli, the event allowed attendees to develop and pitch solutions to government which focused on areas of public policy. The highest rated ideas will be selected for workshopping with start-ups and venture capitalists, stakeholders from the research and higher education sector, and traditional policy experts from departments. Leading up to the event Roy said that “Policy Hack is a strong, initial foray into disrupting the traditional policy-making process.”