The second annual report on innovation in Australia has shown that our performance in the area of research and skills has been above OECD average and our performance in entrepreneurship is one of the best in the world.

 

The Australian Innovation System Report provides the latest data and analysis of how Australia’s innovation system is performing compared with other countries and tracks progress against the Federal Government’s innovation priorities and targets.

 

Key points of the report include:

  • modification of innovations that have already been introduced to Australia is by far the most common approach;
  • large Australian firms are more than twice as likely to modify and introduce to Australia innovations already developed internationally;
  • Australian firms have an excellent capacity for identifying opportunities or problems where new solutions are required
  • Australia has good rates of knowledge diffusion (represented by soft technology adoption/procurement indicators) and above average rates of industrial design and trademark registrations;
  • Australia has extremely low proportions of ‘new to the market international innovations’ even for large businesses. Where data is available, most other OECD countries appear much more likely to develop innovations that are new to international markets than Australia.


The report concluded  that Australia’s strengths “appear to lie in consolidating existing global comparative advantages rather than creating new export markets. Given that our research capacity is moderate to high by international standards this could suggest there is a problem with research-industry partnering, or a lack of complementary markets in Australia for our research output. Our generally low rate of patenting and low rate of collaboration between industry and research sectors compared to the OECD supports this observation.”

 

The challenges highlighted include:

  • The impact of the global financial crisis on innovation activity — the report shows that early stage venture capital investment dropped by 40 per cent in 2009-10;
  • The barriers to business innovation, specifically the lack of skilled people — data analysis in the report suggests that vocational education and training may play an important role in countering that skills shortage; and
  • The collaboration between business and researchers — the report shows Australian business innovators have increased the level of collaboration with universities, but the level of collaboration with publicly-funded research agencies has dropped.

The full report is available here