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January 14, 2016

Innovation needs its drivers

Australia has to make creative decisions of its own, writes Vice-Chancellor Professor Paul Wellings. 

An emphasis on innovation policy that has characterised some of the early positioning of the Turnbull government merits encouragement, support and elaboration.

Australia has to make creative decisions of its own rather than trailing behind other advanced economies. Many of the inherent weaknesses of our economy have been masked by the resources boom of the past decade. The slowing economy is revealing a number of structural problems such as, weak productivity, a manufacturing sector in decline, a lukewarm approach to environmental problems, and complacency in developing a population with skills relevant to the future.

The re-emergence of the debate about the importance of innovation should trigger efforts to deal with some of these issues.

The way in which universities and businesses collaborate needs detailed examination in order to enhance skills and to drive knowledge exchange.

Many of our engineering, science and health, and medical programs are crowded with technical courses but employers consistently advise the academic community that new graduates would benefit if they demonstrated a broader range of soft skills.

Two decades of business process improvement has transformed the workplace and introduced technological systems to manage many workflows. In the process, layers of management have been stripped out. One consequence of this is that new graduates are expected to slot into productive positions early in their careers and to have the skills to take leadership roles within teams.

The tension over whether graduating students should be job ready or career ready, combined with business needs in terms of a broad set of skills, requires resolution. Our professional bodies need to make sure that graduates are not constrained by a narrow, technocratic view of each profession. The workplace will continue to evolve and we will depend on the agility of our new graduates to adapt and to be creative.

The biggest change in our capacity to innovate could come through a better understanding of the skills needed to power the workforce of the future.

We also need to drive the exchange of ideas and knowledge between universities and businesses in new ways. This remains one of the great weaknesses of the way the Australian higher education system is structured.

Change here requires a long-term bipartisan approach. For example, in Britain a sustained effort to assist businesses take advantage of the work of universities is paying dividends. Over the past 15 years successive governments have shaped policy to incentivise research and knowledge exchange by focusing on both the supply side and the demand side.

Three areas stand out. First, despite a substantial squeeze on public spending, governments have avoided cutting back expenditure on research and development. Research councils have maintained their funding to support basic research and have been pushed to drive initiatives such as doctoral training centres in strategically significant disciplines.

Second, industry interactions with universities have been encouraged through special funding streams and universities have engaged locally to assist small and medium-sized enterprises.

Third, higher-risk new technologies have been propelled into the market through industry-led priorities and better approaches to fasttracking emergent technologies.

Here we need to develop our own family of initiatives closely connected to our geographical scale and the variation in industry structures around the country.

Most of our business expenditure on research and development takes place in small to mediumsized enterprises. Our policy framework has to encourage innovation in these organisations in order to help drive job growth.

This will require incentives to link universities with these enterprises. These approaches have to work at local and sub-regional levels, as one of the limiting factors for these businesses is the cost of engagement. The ability to sustain deep relationships with trusted university partners is a key to the development of relevant and localised innovation policies.

The ideas outlined by the Turnbull government late last year are a good but limited start towards transforming the culture of innovation. They will help with access to venture capital, more effective commercialisation and the creation of new spin-off companies.

Their weakness is that they do not address the range of skills needed in the future workplace and the scale of knowledge exchange needed to change the momentum in businesses. Both these issues need universities to be placed at the heart of this generation of innovation policies, and stronger linkages with the business community to be woven into the strategies of all universities.

Professor Paul Wellings is Vice-Chancellor at UOW. 

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