With Darcy W.E. Allen, Aaron M. Lane, and Jason Potts1
Dear expert panel,
We are a group of academic economists and legal scholars with a specialisation in innovation and the development and adoption of frontier technology. The Strategic Examination of Research and Development discussion paper underlines that Australia’s innovation system is one of underperformance and malinvestment.
This is not the first inquiry to investigate and underline Australia’s innovation system underperformance. Each has found the same deficiencies in the system that the Expert Panel seeks to understand:
- In 1995 the Industry Commission found a need to “raise the social and economic payoff from public sector R\&D by achieving a wider external influence over what research gets done” and increase cost effectiveness (Industry Commission 1995)
- In 2007 the Productivity Commission found that there were “major improvements” needed across the board and that research commercialisation was fraught with misaligned incentives and bureaucratic barriers (Productivity Commission 2007)
- The Cutler Review found “shortcomings in the institutional framework that underpins the innovation system” (Cutler 2008).
- In 2015 the Commonwealth Senate Economics References Committee inquiry into Australia’s Innovation System found that “Australia performs well in research”, but “such innovation is not developed into tangible wealth creation” (Senate Economics References Committee 2015).
- In 2016 Joint Select Committee on Trade and Investment Growth Inquiry into Australia’s Future in Research and Innovation also underlined Australia’s underperformance in converting research into market ready innovation (Joint Select Committee on Trade and Investment Growth 2016)
It will be tempting for the expert panel to travel down the same paths as its predecessors. Australia’s innovation system consists of a large network of publicly funded organisations that rely on grants and subsidies as their base revenue model.
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