Newly ex-Industry minister Ed Husic’s R&D inquiry is based on two baked-in assumptions – the new Minister should ask for opinions outside the Big Three interest-groups.
In December Mr Husic commissioned a “strategic examination” of R&D chaired by venture capitalist and Tesla chair, Robyn Denholm. A discussion paper intended to set the context for submissions, includes two policy pronouncements that all but guarantee a conclusion that R&D is a matter for the big three; government, industry and the science establishment.
One policy position is that, “waiting on other nations to turn our ideas and discoveries into products and services that we then adopt at higher cost – is not the path we want or need.”
However the Productivity Commission argues that ‘traditional channels for new-to-the-world innovation,” such as the Research and Development Tax Incentive do not apply to 98% of the economy.
“Most businesses do not operate at the technological frontier. Government policy needs to place more emphasis on the 98% of businesses that benefit from diffusion. Supporting the diffusion of existing good ideas and effective business models will increase economy-wide productivity,“ the Commission argues.
The other policy position taken by the discussion paper is that Australia should not rely on small and medium enterprises for research and development. “Without the backing of larger companies or public research institutions, the overall R&D output of Australia’s SME’s is unlikely to meet the needs of a rapidly advancing global economy.”
But small and medium manufacturer representative Jens Goennemann makes the case for the Australian economy as-is.
“Governments naturally want gleaming programs with seemingly large cheque sizes that sound impactful, make headlines and impress voters. However, that alone will not turn the tide of falling complexity and capability, as only the big end of town can absorb such cheques.”
Or as Mr Husic put it in a 2023 speech to the Sydney Institute, “ we need governments that lean in and help, rather than stand back and hope.”
