Half of Australian businesses are “innovation-active,” introducing new goods, services or processes, but few rely on universities for inspiration.
The Australian Bureau of Statistics reports that the information media and telcoms sector led in innovation in 2022-23 with 63% of firms changing things up; Professional, scientific and technical services was seventh of seventeen with 52% of business innovating, while agriculture lagged at 34%.
While 60 % of “innovation active” businesses generated their own ideas, just 5% sourced them from universities, the ABS found.
Consultants, “including scientific experts” were important sources to support, inspire and help deliver innovation but the report found that businesses did not connect with universities.
Overall, 3.5% cited “academic conferences” as sources of ideas and innovation, 3.9% mentioned research papers and 8.8% referred to universities in general. The stand-outs were the health-care sector, where 26% of innovating businesses were in touch with HE organisations, and ICT firms (12%).
Among the bigger barriers to innovation that businesses reported were a lack of skilled people in the labour market (16%) and within the business (13%). The top three specialist skills used were in management, ICT and (a long way back) engineering.
These statistics will only support the two major party’s proposition that universities are out of touch with community and indicate a clear need to reconsider the sector’s approach to engaging with industry.
Research lobbies have argued for a reduction in the research and development tax incentive and passing the savings to their members to fund more discovery research that may, or may not, end up in development. But the Productivity Commission distinguishes between “novel innovation” and diffusion, arguing that it matters less where new ideas come from and more that they are picked up – and these latest ABS stats will not help the case.
In 2019-21, just 3% of new products and 8% of processes introduced to Australian businesses were world-firsts, according to the ABS. As the Productivity Commission points out, “In many industries, the most technologically advanced firms in the world are overseas, and the majority of innovations are taking place in firms overseas.”
Which makes a case in industry policy for more PhDs applying innovations, wherever they come, from rather than discovery scientists. The reports present a significant challenge to future funding for pure research and funding for multiple disciplines, at a time when the Government is seeking to re-shape the funding and function of the tertiary sector.
But not necessarily from government programs picking winners. ““By focusing on research commercialisation, policy initiatives to increase knowledge transfer treat knowledge transfer as synonymous with commercialisation, even though other channels — such as consulting by academics — may be more relevant for certain types of firms and industries,” the PC warns.
