Prime Minister Malcolm Turnbull has firmly hit the reset button on Australia’s national agenda for innovation and science, pledging a conservative and highly targeted $1.1 billon as part of the biggest shake up of industry and government technology policies to date.
Released on Monday afternoon, the highly anticipated National Innovation and Science Agenda (NISA) finally charts a clear course for Australia’s public and private sectors and overtly aims to catapult technological and industrial research to the forefront of the economy as employment growth opportunities the minerals and traditional manufacturing sectors abate.
The document, in both purpose and effect, represents a rapid modernisation blueprint across policy and the wider economy that puts down the key settings for changes now likely to flow from Turnbull’s first Budget.
The highly detailed statement is a major departure from so-called ‘big number’ announcements that usually hinge on a central project or initiative. Instead the new NISA has opted for a series of highly tactical, nuanced and precision guided measures that hit directly at cultural and systemic reform rather than big ticket expenditure.
“Australia is falling behind on measures of commercialisation and collaboration, consistently ranking last or second last among OECD countries for business-research collaboration,” Mr Turnbull said in a joint statement with Minister for Industry, Innovation and Science, Christopher Pyne.
“Our appetite for risk is lower than in comparable countries, which means Australian start-ups and early stage businesses often fail to attract capital to grow.”
To arrest the well-documented innovation malaise, the government is now pushing a four-pronged strategy that revolves around “Culture and capital”, “Collaboration”, “Talent and skills” and “Government as an exemplar”.
At its simplest, the NISA seeks to generate private sector early stage investment by lowering taxes, relaxing regulation and removing other impediments like pitfalls in insolvency laws.
But the strategy also makes a concerted push towards making industry and government work together on priority areas, including building a sustainable labour pool that doesn’t have to migrate to find a job or get rich and – perhaps most notably – promising that the Canberra will actively back smaller, newer players as suppliers to give them a leg-up.
The last pledge, “to lead by example in the way Government invests in and uses technology and data to deliver better quality services” represents a radical departure from the way the Commonwealth has previously eschewed risk in its purchasing priorities.
Traditionally federal purchasing decisions, especially around technology, have leaned towards larger multinational companies with deep pockets at the expense of local providers desperate for government contracts to prove their credentials.
The result has been a domestic technology sector which often finds it difficult to scale-up its public sector sales without the participation of multinational outsourcers and software giants. Many governments overseas routinely support riskier local start-up businesses as a way of generating new growth, capital and intellectual property as part of a diversified economy.
That approach is now being mandated from the top in Australia.
Federal procurement becomes a catalyst
A critical element of the new NISA looks to be the strategic repositioning of around $5 billion in annual federal government technology purchasing to actively provide much easier access to smaller companies businesses operating domestically.
But to get there, the Turnbull government is unashamedly borrowing a trick from Britain by largely copying the UK Government’s “Digital Marketplace” model, a light touch alternative to the administratively onerous public tendering system that has for years inflated project costs and the price of doing business with government.
“The Digital Marketplace will be an online directory of digital and technological services provided by small to medium businesses, for government agencies to seek procurement,” the NISA section on leading by example states.
It appears that the Digital Transformation Office has been immediately tasked with the rapid development of the new facility, a move that necessarily moves the service away from the Department of Finance’s existing AusTender system.
“You will see here measures that are going to make it much easier for smaller Australian businesses to sell to government and for government to buy from them,” the Mr Turnbull said.
“There have been too many barriers, it has been too hard, too much red tape, too many forms. We can sweep that aside. In 2015, we don’t need that. We need to work swiftly and nimbly and government has to lead the way.”
Pushing Digital well beyond government
In a separate measure dovetailing into the creation of government’s own agile technology minimart, the CSIRO’s tech shop Data 61 – or the organisation formerly known as National ICT Australia (NICTA) – has scored a pot of cash to get business to come up with innovative and tech driven ideas that target what Mr Pyne said was “the wider $50 billion procurement by government” that sits outside IT.
“Data 61 will be doing something different which will be saying what government wants to do and asking for support from business,” Mr Pyne said.
It’s a far cry from the renewed push towards big outsourcing deals contained in the now largely redundant Commission of Audit released under former PM Tony Abbott, a loss that few are publicly mourning.
Instead, what the NISA documents make abundantly clear is that the government want much more bang for its buck when it comes to $50 billion in buying power, especially around fostering innovation where “Australia ranks only 77th out of 144 countries.”
The government now says it wants a far more open contest of ideas to not only make taxpayers’ money go further but also feed back into the virtuous innovation loop.
“Rather than procuring existing products, we’re encouraging businesses to develop more innovative solutions to important government policy and service delivery problems, with a pilot series of ‘challenges’ called the Business Research and Innovation Initiative,” the NISA documents say.
“Entrepreneurs will receive funding to create new products and innovations with export potential, while retaining their intellectual property and the right to commercialise the ideas in Australia or overseas.”
Plenty of cheers from industry
After more than six years of damaging political oscillation on the innovation front, industry groups on Monday were queuing-up to cheer on the big picture policy reset, and not just from the tech sector.
“This is a very good announcement that sends the right message, however the next step is to remove barriers and the support programs will work,” said Peter Strong, the chief executive of the Council of Small Businesses of Australia.
“One marked change is the decision for directors to introduce a safe harbour for personal liability for insolvent trading. This simple change means the innovator, the person who is taking the greatest risk, can appoint a restructuring adviser to help turn the company around and become viable. They can continue to do their innovation with better support and advice” Mr Strong said.
Australian Information Industry Association chief executive Suzanne Campbell said the federal government had listened to industry on how to take “home grown research, ideas and expertise and turn them into the businesses and jobs of the future.”
“The Agenda delivers world class policies for supporting entrepreneurialism – key to Australia developing a thriving, productive and internationally competitive start-up sector.
“Proposed changes to Government procurement arrangements, with a focus on surfacing more innovative solutions to policy and implementation issues is well overdue,” Ms Campbell said.
“Combined with the establishment of a Digital Marketplace for ICT procurement the Government has signalled its preparedness to take a more strategic approach to procurement – using its purchasing power to drive policy outcomes.”
The technology group chief also backed a push to get more students into the industry by studying the required subjects, an issue close to its members’ hearts and profit and loss sheets.
“It’s encouraging to see the federal government deliver on areas of policy where the AIIA has been agitating for change,” Ms Campbell said.
“The $99 million investment in STEM programs is crucial to providing the workers needed for the jobs of tomorrow.”
Even cloud-based customer relationship software firm Salesforce was keen to backslap the government’s initiative, perhaps because more start-up businesses here means more potential customers.
Salesforce’s Australian Vice President for Innovation & Digital Transformation, Robert Wickham, said he backed the government’s move “to help Australia transition from a resources led economy to an innovation led economy.”
“One of the most important critical success factors of this bold initiative by the Government is the cultural shift that must come with it. The national shift away from ‘fear of failure’ to a ‘spirit of innovation’ will require significant changes in behaviour and mindset. This requires time, perseverance, and ongoing investment by all parts of the industry,” Mr Wickham said.
And faint praise from Labor
Opposition Leader Bill Shorten, Shadow Minister for Higher Education, Research, Innovation and Industry Kim Carr and junior Shadow Minister for Digital Innovation and Startups, Ed Husic, gave partial support to the new NISA, though accused the Turnbull government of recycling its ideas.
“We welcome measures that reflect what Labor has long been calling for which, in many cases, mimic our own announcements,” the trio said in a statement.
“But we remain concerned it does not go far enough …. we remain deeply concerned the Abbott-Turnbull Government has cut more than $3 billion from innovation, science and research initiatives since the 2013 election.”
Obligatory criticism out of the way, Labor found some room for support.
“The decision to put research infrastructure on a secure footing for the next decade – including funding for the Australian Synchrotron – will be welcomed not just by researchers, but across the innovation system,” Labor’s statement said.
Labor also “unhesitatingly” welcomed the commitment “to long-term funding for research infrastructure, which comprises almost half the total funding for the package” before taking a poke at the polar difference in policies between Abbot and Turnbull.
“The irony of Christopher Pyne making this announcement at the CSIRO will not be lost on the 1700 scientists around the country whose jobs he previously chose to hold hostage to his plan for $100,000 degrees.”
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