Health innovation a winning story

The Australian
13 Jul 2016

Feedback from the election suggests people did not relate well to the jobs and growth, innovation, and ideas boom mantras of our politicians. On the ABC’s 7.30, Malcolm Turnbull found it difficult to explain, in layman’s terms, how investment in research and innovation would benefit the lives of teachers and policemen.

Yet innovation creates access to a range of new products and­ ­services not now available or even thought of. It makes service delivery processes more efficient, effective and accessible.

In particular, innovation in healthcare has had, and will continue to have, a profound impact on the lives of teachers and police officers and their families.

A case in point is health ser­vices. It is one of Australia’s success stories, built up across many years through investment in research and in the education and training of people who work in the system. Health and medical research is strongly supported by federal ­governments, amounting to $900 million last financial year.

On closer examination the data paints an interesting picture.

The Australian Bureau Statistics estimates universities invest 30 per cent of their research resources in medical and health sciences, compared with 43 per cent in the natural/physical sciences and engineering, and 27 per cent in the social sciences and human­ities. Overall, 34 per cent of university research investment is for health purposes, compared with 27 per cent for economic purposes, 15 per cent for other social pur­poses and 10 per cent for the environment.

The 2012 Excellence in Research Australia report indicates 44 per cent of university research income derived from industry sources is for medical and health sciences, compared with 40 per cent for science and engineering.

Moreover, almost 46 per cent of international research income is for health and medical purposes. Income from philanthropy is also heavily oriented towards health and medical research. State governments are also significant investors in medical research.

There is no doubt more medical research product-oriented discoveries and inventions will be commercialised and applied as we get better at reading demand and market signals and finding the entrepreneurs, venture capital investors, chief executives, board members and vocationally educated technicians: people who can build and sustain medical technology and services businesses.

At the same time, it is vital we keep developing the leadership and management capabilities essential for the delivery of innovations in our hospital and public health systems.

It is often overlooked that we are witnessing a substantial level of innovation in clinical processes, procedures, and treatments using knowledge generated from medical research. For example, innovative clinical procedures can be less invasive and more effective in addressing acute conditions. There are also numerous innovations in the treatment of chronic disease and approaches to rehabilitation.

These clinical and medical innovations have the potential to extend life expectancy and retain more people in productive activity when they are at their peak in their careers, as well as enabling older Australians to remain productive well past some arbitrary notion of a retirement age.

The interest of Australians in healthcare is also reflected in the effect of the demand-driven education funding system. Again, the data is interesting. Department of Education data indicates that between 2008 and 2014, university student commencements (fulltime equivalents) increased by 95,255, or 50 per cent. However, in health-related fields, the increase was 18,912, or 93 per cent. There was also an increase of 94 per cent in commencements in the human welfare studies field of education. The education of health professionals has an important role in developing the skills for innovation in the sector.

Discussion of health innovation and its contribution to ­inclusive growth was missing in the election campaign. For the future, discussion of our national innovation system must embrace the opportunities for innovation in health, as well as a broader social assistance agenda.

Innovation, within resource constraints, provides the opportunity to deliver greater value in service quality and access, and ­creates a bridge between healthy living and inclusive economic growth.

Other industries, including manufacturing, could learn from the health innovation story, in particular the need to commit to investment in basic research, build strong collaborations with leading research organisations and work out ways for the effective translation to industry through applicable research initiatives.

The election demonstrated that the community did not connect with an innovation narrative heavily slanted towards science, technology and mathematics, ideas and start-ups. Yet this narrative is important for Australia’s competitive future. Developing a story about the benefits in all parts of the community in a language all people can understand is essential.

Chief Scientist Alan Finkel has done an excellent job in starting the narrative through the Securing Australia’s Future project.

But it is up to industry to pick up the challenge and take a lead through supporting step change investments in innovation.

John H. Howard is adjunct professor at UTS Business School and managing director of Howard Partners.