Insights on Australia’s Innovation Performance

Insights on Australia’s Innovation Performance


A report from the Office of Innovation and Science Australia (ISA) released this month shows Australia’s innovation performance isn’t as good as perhaps we would like to think it is.

ISA’s Performance Review of the Australian Innovation Science and Research System 2016 report provides a snap shot of our current progress on innovation and is designed to inform the strategic plan for enhancing innovation in Australia’s innovation, science and research system to 2030 – due in late 2017.

While the mining industry can hold its head high next to the manufacturing, financial services and professional, scientific and technical services as introducing high levels of new-to-the-world innovations, our SME’s are out performing larger businesses.   

Australia has the fourth-highest proportion of innovating SME’s across all countries in the OECD – with almost two thirds of Australian SME’s introduced an innovation in 2012-13.

The proportion of large Australian companies that have introduced an innovation (68 per cent) is around the OECD average for large firms (69 per cent), which falls well behind the average for of the top five performing countries (87 per cent).

There is no doubt Innovation remains a major focal point for policy, as decision makers across the country scan the horizon to identify new sources of growth. So, the report is useful for understanding where we need to go next.

The system uses a simple framework to guide performance assessment, identifying three innovation activities:

  • Knowledge creation – Origination of new ideas, often by building on prior research, innovation and reputation
  • Knowledge transfer – Identification and selection of knowledge for application, and passage of knowledge
  • Knowledge application – Development, trialling, testing, refining and iterating of ideas to address a specific problem or need

The framework identifies six categories of enablers that facilitate innovation activities within each of these areas – money, infrastructure, skills, networks, culture and policy.

The linkages across, within and between innovation activities and enablers are of critical importance to eventual outcomes.

Here’s a snapshot of where we currently stand across the framework in relation to innovation enablers.

The Scorecard

According to the report, we are doing well in many aspects of knowledge creation, but when it comes to knowledge transfer and application Australia’s performance is more than a little lack lustre.

Australia’s performance in knowledge creation is generally above average. Australia ranks in the top 11 or better in the OECD for higher education expenditure on research and development, academic ranking of world universities, cited publications per million of population and higher education researchers per thousand of total population and population aged 25-65 with a doctorate per thousand population.

Australia has excellent research infrastructure assets, with high levels of use that support outputs. Our relative expenditure on R&D activities in higher education and not-for-profits is above OECD average and is continuing to grow. We achieve higher quality and quantity of research outputs than our international peers, based on the size of the research community and these research communities exhibit high levels of international collaboration.

However, when it comes to knowledge transfer we don’t do as well.  Specific areas that could be improved include networks, skills, policy and infrastructure.

Research indicates that collaboration between the academic and business community is weak. Change is underway with more formal models and roles to facilitate relationships.

Australia’s education system is significantly underperforming, against many of which are advancing rapidly.

In 2016-17, only 16 per cent of government funding for innovation programmes will specifically encourage knowledge transfer and there is growing recognition of the untapped economic and social value of government datasets being open for community use.

The message to industry is simple. Greater collaboration will help unlock the potential of Australian innovation.