Innovation policy advice should be more than an echo chamber

Nov 21, 2023
Light bulb with Australia flag, 3D rendering isolated on white background. Image: iStock /AlexLMX

At a recent Innovation Forum, the Minister for Government Services, the Hon Bill Shorten, volunteered the observation that the Australian research and innovation community is in danger of becoming an “echo chamber”, if it wasn’t already.

The term echo chamber invokes an image of a community isolated from dissenting opinions, thus reinforcing pre-existing beliefs. This is not, in reality, a fair reflection of the efforts over recent decades to provide evidence-based advice on how to develop a more knowledge-based, dynamic and resilient economy.

The Minister no doubt perceives that policy discussions are dominated by a limited set of voices, in particular researchers in universities, industry bodies and thinktanks, without adequate engagement with the broad range of business, government and the community. How ironic that so much weight is given to the even more limited voice of the Productivity Commission, which has overseen a structural deterioration in Australia’s productivity performance.

While the Minister’s comments may have been intended to be provocative, they inadvertently spotlight a more important issue: successive Australian governments have not had the interest or absorptive capacity to internalise and act upon the sophisticated policy discourse that a vibrant innovation community can generate, and which is central to the success of other advanced economies.

Over at least 30 years, thought leaders like Jane Marceau, Ron Johnston, Mark Dodgson, Roy Green, Goran Roos, and others have significantly contributed to the discourse on innovation in Australia. They picked up the concept of “national innovation systems” pursued by the OECD from the mid-1990s. They have prepared academic publications, contributed to the grey literature, delivered direct policy advice, and undertaken a swathe of commissioned policy reviews and evaluations.

Notwithstanding this commitment, there was only limited interest in this work from a few warriors in the Department of Industry and virtually no interest elsewhere in government. The National Innovation Summit proceeded with much fanfare in September 2000, but its impact was perfunctory and short-term. Two reports with the headline Backing Australia’s Ability were prepared. But there was a very small amount of new investment.

The Australian government has never really signed on to the innovation systems concept, preferring to follow a non-interventionist economic theory promulgated by the Treasury and Productivity Commission. Over the years, governments have developed a sporadic interest in university research commercialisation and startup approaches to innovation, but without solid or continuing commitment.

The newly elected Labor government in 2007 got off to a good start by commissioning the Venturous Australia report in 2008. Following this, Innovation Minister Kim Carr produced a 10-year plan, Powering Ideas, but only got two of those years before falling victim to the removal of Prime Minister Kevin Rudd. However, to his credit, he established the rudiments of an industrial policy framework that had an immediate impact. Will we ever see his like again?

The annual National Innovation System Report is no longer published in an accessible format, and the 2017 National Innovation System Review, Australia 2030: Prosperity through innovation, has been largely forgotten. Meanwhile, a Report on Australia’s Innovation System prepared for a Senate Committee in 2015, which the Australian Financial Review hailed as a “brilliant summary of the problems surrounding innovation policy and how to address them”, has become a merely archival footnote.

During this period of government disinterest, the work of thought leaders has kept on informing government policy-makers on science, research and innovation and what other governments are doing elsewhere in the world. However, their influence on policy and practice has been limited because spending in these areas at the Commonwealth level is fragmented over 13 portfolios and 172 separate budget line items, few of which connect with each other.

This disinterest reached the point where former Prime Minister Tony Abbott is reputed to have banned the term “innovation” within government communications and policy discussions. Whether this occurred as a formal instruction or not, the term was used very sparingly until the switch to Prime Minister Malcolm Turnbull, who made the term almost compulsory as part of his “ideas boom”.

Turnbull’s National Innovation and Science Agenda (NISA) was an exception to the overall marginalisation of innovation and industry policy by successive governments, but it too was doomed. In a not insignificant way, NISA may even have contributed to Turnbull’s downfall, as the government struggled to communicate the benefits of NISA to the broader public and counter criticisms concerning job losses.

Ministers with responsibilities related to industry, innovation, science, research, and technology have generally ranked at the bottom of the ministerial pecking order, and their time on the job has been short. It follows that developing capacities for ministerial listening and coherent policy development has been virtually impossible.

Since 1996, there have been 16 separate ministerial appointments to cover industry, science and technology or equivalent roles— John Moore, Nick Minchin, Ian Macfarlane (3 times), Kim Carr (also three times), Greg Combet, Christopher Pyne, Greg Hunt, Arthur Sinodinos, Michaelia Cash, Christian Porter, Angus Taylor, and most recently, Ed Husic.

There have also been 13 ministers for Education who have held various roles in research, particularly university research, science and technology—Amanda Vanstone, David Kemp, Brendan Nelson, Julie Bishop, Julia Gillard, Simon Crean, Chis Evans, Kim Carr, Christopher Pyne, Simon Birmingham, Dan Tehan, Alan Tudge and Jason Clare.

This musical chairs of ministerial appointments has generated hundreds of reviews, inquiries, statements, initiatives and announcements. Despite this vigorous activity, including vast amounts of submission-based “consultation”, governments have not been able to deliver a long-term science, research and innovation strategy. We know how much has been spent through details of budget line items but not how these expenditures relate, in sum, to delivering a national innovation policy or industry strategy.

With each ministerial appointment, there is an inevitable departmental restructuring. As people come and go, together with the continuing impacts of the New Public Management philosophy, there is virtually no corporate memory left in these agencies. Its absence means ministers and newly appointed officials have forgotten or don’t know how or who to listen to. Similarly, it is hard for policy analysts to find out where to go and whom to communicate with in government.

The truth is that the problem Minister Shorten alludes to is not an “echo chamber” among the innovation community but the unfortunate reality that ministers and officials have simply not been listening with intent. The perception that external contributors to the research and innovation agenda seemingly talk to themselves is not for want of trying to communicate with governments and the broader community.

Moreover, due to the focus on macroeconomic levers at the expense of the overdue transformation of Australia’s narrow trade and industrial structure, the ranks of the once robust community of innovation policy thought leaders are diminishing and are not being renewed. There is a general frustration and disillusionment about government absorptive capacity, as Australia slides down the economic complexity and innovation rankings.

Strangely, governments seem to prefer to listen to assertive political advocacy and populist commentary, especially when it coincides with hostility to public policy intervention. They appear to have little interest in building capability for genuine thought leadership and associated actions. The Productivity Commission has certainly not performed that role, and doesn’t see itself doing so.

If Australia’s future is to be knowledge-driven and value-adding, we are not currently in a position to prepare for it. Instead, governments have been cutting back on public research and innovation investment for over ten years, and universities are taking it further by prioritising STEM disciplines over the humanities, arts and social sciences—where innovation studies generally sit. There are no signs that things are about to change.

The situation in which Australia finds itself seriously compromises its ability to create a resilient knowledge economy that makes the transition to new areas of net zero emissions growth and diversification. Without thought leadership and genuine foresight, Australia will likely continue as a resource-driven commodity economy, although the name may have changed from “ore extraction” to “critical minerals”.

Minister Husic wants an R&D share of GDP of three per cent. It currently stands at 1.68 per cent and falling. There is no road map to indicate a change in the direction of the current downward trend. But right now, budget funding priorities are so far from supporting research and innovation that there is no prospect of achieving this metric even in the medium term. Universities are doing much of the heavy lifting, but only by garnisheeing international student fee income.

The current science, research and innovation policy space is full of announcements and small amounts of short-term funding. We are looking disconnectedly at green hydrogen, critical minerals, quantum, robotics, renewable energy technologies, advanced manufacturing in its many manifestations, space, new materials (graphene is back on the agenda), lithium (and now sodium) batteries as well as buzz words like deep tech, biotech and agritech.

The promise of the new technologies is exciting and a cause for celebration. But there is nothing to connect them except rhetorical technology visions. There is no sign of an innovation plan to drive an industrial strategy, realistic investment levels, or a National Research/Science Foundation that will pull it all together, as in comparable countries.

A well-functioning innovation policy community comprises a diverse network of actors, including government agencies, research institutions, universities, corporations, non-governmental organisations (NGOs) and think tanks. This community requires constant renewal and revitalisation, which will come from governments taking a serious interest in what it has to say. It would then be recognised as an essential strategic asset to assist governments in providing direction and leadership in the transition to new sources of growth and productivity.

Perhaps in making his provocative statement, Minister Shorten has done us all a favour.

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