Challenges for Australian Research and Innovation, UTS Occasional Paper, UTS and Howard Partners, 2020.

Australia has emerged from a public health crisis to confront the more fundamental threat from the forces of climate change and the attendant requirement to move from an economy where wealth has been created by the exploitation of mineral fuels and consumer demand driven by high levels of immigration, to one driven by new industries built around knowledge and technology.

The crisis has pointed to the strength of Australian agriculture, but even there, we export much of the raw produce and let others do the processing – and then we bring it back again as a manufactured product. We allowed the wool industry to largely disappear because of agri-politics.

And we allowed manufacturing to disappear by failing to respond to the challenge of international competition – continuing to produce fair average quality commodity-based products, whilst others charged ahead based on a heavy commitment to research, development and innovation (RDI).

Policymakers must dispense with the idea that an active industrial strategy is about “picking winners” and that we can import RDI from overseas. Industrial and innovation policy must address system failures such as poor interaction between businesses and universities. The Australia 2030 Innovation Strategy advocated national missions to guide RDI investment and create new industries.

The plethora of funding programs and cross-cutting Ministerial and Commonwealth-State responsibilities means that Australia does not currently have any semblance of an industrial strategy or coherent innovation policy. There is some support for sector-based strategies and innovation district initiatives – but the commitment is weak across Government, and expenditure is reported “after the event” instead of being driven by clear missions, objectives, and outcomes.

To confront the climate crisis, Australia must develop an industrial strategy and innovation policy that can move the nation to a post-carbon future and avoid the policy failures surrounding responses to previous crises such as the 1974 oil shock and the restructuring of the economy required after the removal of industry protection regimes and introduction of microeconomic reforms in the early 1990s.


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