Australian Government Innovation: Approaches and Challenges - Coursework Example

Australian Government Innovation: Approaches and Challenges Name Course Name and Code Instructor’s Name Date INTRODUCTION In Australia universities get half of Australia governments $2.5 billion funding for research (Bessant & Venables, 2008, p.65). Issues facing the government, universities and firms pose and increase chances for intermediaries. The issues facing innovation in Australia are immense. There have been several efforts to get a more interactive model of innovations among a number of government initiatives to bolster innovation performance. The government has also established a number of research centres such as the Australian Research Council’s (ARC) and cooperative research centres (CRC). The government also encourages non-profit organizations, for instance, AMIRA International (an independent association of mineral companies, established to develop, facilitate and broker collaborative research projects). This paper will demonstrate initiatives that have been put by the government to encourage innovation in Australia on the other hand it will demonstrate challenges that have faced the government when encouraging innovation in Australia. BODY Government spending on innovation In Australia universities get half of Australia governments $2.5 billion funding for research. About 30 percent is directed to other government research institutes, for instance, Commonwealth Scientific and Industrial Research Organization (CSRIO) and 13 percent of the R&D is allocated to business. A large fraction of funding is offered by the government, with a meagre 0.005 percent of university research being funded by business (Bessant & Venables, 2008, p.65). This amount is very little to support innovation in universities instead more funds ought to be directed by the government to universities so that they can conduct more research that will prompt more innovation in universities. According Kaye & Quinn (2010, p.14), issues facing innovation in Australia are immense. Apparently, Australia will always be at the back of global development in competition basing on innovation (Wallace, 2008, p.28). This offers policy makers as well as managers with significant issues when considering innovation policy as well as practice, as well as places particular relevance on the need to respond quickly to changing models of innovation which might encourage better use of scarce resources. However, there has been little change or improvement in innovation in Australia owing to inadequate funds from the concerned stakeholders. According to Corsi, Christofol & Richir (2013, p. n.p), issues facing the government, universities as well as firms pose and increase chances for intermediaries. The research and development (R&D) contribution by the private sector is low and this suggests that private and other research intermediaries must take a proactive role. There must be more flexible arrangement, for instance, use of private firms’ intermediaries which allow universities to draw on their commercial experts cost effectively. The R&D from private sector ought to be increased so that there can be improved performance of the private sector consequently, resulting in improved innovation. Lack of government policy on innovation Issues facing Australia are argued by some knowledgeable observers to be aggravated by lack of clarity, and tension between education, science as well as industry policy. These issues remain for those who have a more complacent perception of Australia’s innovation performance. Despite the increase in Australia’s trade terms since 2003 owing to rising goods prices, the rate of production growth has decreased compared to 1990s and the economy is now prone to vagaries of international commodity markets as well as assumptions regarding the trouble-free growth of China and India as consumers of these commodities (Bessant & Venables, 2008, p.107). There have been several efforts to get a more interactive model of innovations among various government initiatives to bolster innovation performance. The importance of networking between universities and firms, the significance of private intermediary knowledge brokers in commercialization of university research; maximizing utilization of infrastructure aid for innovation; as well as greater role of funding organizations in changing dissemination of information on innovations appreciated by government. Without active involvement of these stakeholders there will be little innovation in Australia. Government’s research centres The Australian Research Council’s (ARC) “Linkage schemes, as well as government’s cooperative research centres (CRC) programmes are public-private partnerships designed to enhance movement of knowledge between private and public sectors. 166 foreign companies and 615 Australian companies and industries collaborated with universities in proposals submitted under ARC’s “Linkages Projects” in 2005. The ARC financed a total of $261 million to “Linkage” scheme between 2005 and 2006, with in-kind as well as cash contributions from participating partner organizations more than doubling this amount (Bessant & Venables, 2008, p.108). Even though this scheme looks appealing to businesses, practically difficulties will always be experienced in their management, particularly regarding research priorities as well as ownership of IP rights. There is a fundamental problem with information flow owing to weak linkages between firms and research institutions. This problem is a challenge for universities, government as well as intermediaries (OECD, 2010, p.86). A significant problem for the government is to compliment the current cooperative research centres arrangement with other CRCs between the groups of firms. There is also a need to strike a strong balance between policies regarding knowledge generation as well as technology invention, technology diffusion, technology adoption as well as policies for knowledge movement. Universities in Australia face a number of challenges regarding research and innovation. Large universities are the only ones equipped with the required scale as well as expertise required to develop competent commercialization units. If only large universities are the only ones equipped with the resources to conduct research what about small universities this implies that there is large gap in terms of resource allocation in universities. It is worth taking note that intellectual property management in research institutions and universities is not consistent and entail high transaction costs for firms that deal with them leading to fewer incentives for firms to collaborate. Evidently, firms also lack commercialization capabilities, particularly smaller firms which do not have experience of collaboration (Bessant & Venables, 2008, p.108). Smaller firms ought to have commercialization capabilities so that they can be competitive. Government encourages non-profit organizations AMIRA International, a non-profit organization in the private sector was established in 1959 (Bessant & Venables, 2008, p.108). It was established to develop, broker as well as facilitate collaborative research projects with a goal of assisting with leading-edge science and technology by members to fortify their business development. AMIRA established its self quickly as a broker as well as manager of multi sponsor collaborative research projects, acting as the agent for industry sponsor for research in institutions and Commonwealth Scientific and Industrial Research Organisation (CSIRO). A number of challenges have dogged AMIRA since its formation. Setbacks to its model of collaborative research comes from a number of quarters, including changes to investments in innovations in the mining sector, changes in Australian innovation regulation, operational problems as well as increasing costs of individual projects. Recently, the research environment has been affected by major developments in the mining sector: duration of price and demand strength as well as continuous industry consolidation by acquisition and mergers. Even though firms have reported good results, there are competing demands for the funds just like in a season of high demand there is pressure to divert available resources to immediate capacity increases. As a result of industry consolidation, few firms exist to share research costs. Mining firms have been restructuring, reducing internal research groups as well as devolving tasks for research to firm’s business units. Consequently, AMIRA that worked previously through 20 or 10 head offices currently has to deal with a number of mine sites that are spread worldwide with unstable commitments to R&D. Recently AMIRA was engulfed by tough operating environment. There was also decline in research funds for three consecutive years between 2002 and 2004. New research contract value for 2005/06 stood at $6 million, this was a decline by 7.5 percent in comparison with 2004/05. Generating quantum of support for projects as well as project generation is a setback that AMIRA is grappling with (Bessant & Venables, 2008, 109). Government lacks effective innovative systems According to Petty & Enright (2013, p. 76), they state that lack of innovative activity contributes to issues facing innovation. In 2008 -2009 a third of the firms in Australia introduced a new innovation to their firms, with the most implemented innovation being the introduction of significantly improved managerial process. As a result of innovation by various firms both big and small, it was discovered that larger firms have high chances of making innovations compared to smaller firms (Gibbons, 2007, p.241). According to Krishna (2007, p.56), Australia has a shallow innovation system. There are suggestions for improving the national innovation system these include developing a National Council as well as a Research Coordination Council to manage innovation as well as research efforts, streamline access to government programs as well as aid and encouraging strategic policy objectives which bring innovation-relevant linkages at the national level. It is pretty clear that most of the R&D is done by the government and conversely the educational institutions are not in tandem with the business reality of most of the Australian firms (Petty & Enright, 2013, p.78). Australia is faced with limited capacity as well as technological development. Australia’s capacity to aid a knowledge-innovation economy is restricted by its infrastructure as well as by poor levels of technological adoption by some sectors (Newton, 2008, p.21). If Australia had enough capacity and technological development it could be more advanced since innovation could be achieved more easily. According to Society for Knowledge Economics and Business Council of Australia tax reforms to support innovation including loan subsidies as well as income-contingent loans (BRW, 2006, p.35). Generally, Australia has a small domestic market compared to other markets in Europe, Asia and the United States. Higher institutions of learning reward researchers for publishing academic journals rather than engaging in activities that contribute towards development of an innovative economy (Szirmai, Naude & Goedhuys, 2011, p.98). According to Courvisanos (2012, p.21), Australia lacks an innovation culture. This has been singled out by many organizations, for instance, Australia Industry Group, the group advocated for development of an innovative culture. The group stated that this could be attained by highlighting success stories as well as lessons leant in Australia innovation practice. Most of the firms in Australia rate technology and innovation as elements of little significance in driving competitiveness. This has resulted in the conclusion that Australian companies do not have strategic methods to stimulate innovation (Uyeda, 2010, p.65). Australia ought to rate technology and innovation as significant element for attaining competitiveness among different sectors. Australia has a wide skills gap. According to the Australia’s Productivity Commission, a highly skilled workforce is fundamental background for Australia’s innovation system (Australian Government, 2012). Australia has skill deficiencies at various levels especially at the managerial level and this necessitates the Australian Government to incorporate aid for management as well as leadership development into its productivity agenda. This has been echoed by the Australian Industry Group by reporting that fundamental areas of innovation and knowledge are not extensively embedded in the Australian workstations (Fitzgerald, 2010, p.45). In Australia there is less expenditure on research and development. It has been proposed that more ought to be spent on R&D since it lags behind other states in business and government investments in R&D (UNE, 2010). There are also some issues of scale and focus. It cannot hope to match established nations such as Germany, Japan and United States that have large GDP and spend a large portion of it on R&D, have established linkages internationally and have large firms doing R&D in their countries. This cannot be compared to Australia that spends a meagre fraction of its national budget on R&D otherwise it could have had higher innovation levels. According to Bayari (2012, p.101), Australia does not commercialize its ideas. Therefore, there is an exigent need to commercialize its ideas. Most of the Australian discoveries are not commercialized in their country instead the ideas are adopted and commercialized in other countries oversees. The development of Commercialization in Australia was a step towards encouraging innovation. However, this did not stop the flow of innovations to abroad. There ought to be progress in commercializing research done in research institutions and promote research which can be commercialized as well as putting the focus on commercial results from innovation. CONCLUSION In a nutshell, the Australian government is facing a number of issues regarding innovation. The government is the overarching determinant of how innovation will take shape in the continent; this can be achieved by formulating and implementing policies that encourage innovation in the continent. However, this has not been the case since it does not have effective policies on innovation. The government also disburses fewer funds to universities and research institutions. There have been several efforts to get a more interactive model of innovations among a number of government initiatives to bolster innovation performance however that has not been very effective owing to less spending on research and innovation. The government has also established a number of research centres such as the Australian Research Council’s (ARC) and cooperative research centres (CRC). The government also encourages non-profit organizations, for instance, AMIRA International. The government also lacks effective innovation systems. References Australian Government (2012). Australian innovation system report 2012. Retrieved from http://www.innovation.gov.au/innovation/policy/australianinnovationsystemreport/aisrep ort2012.pdf> Bayari, C 2012, Australian economy and neo-liberalism: Manufacturing, trade and bilateral links with Japan in the Post-Keynesian age, Munster, Lit Verlag Munster. Blainey, G 2009, A shorter history of Australia, North Sydney, RandomHouse Australia. Bessant, J & Venables, T 2008, Creating wealth from knowledge: Meeting the innovation Challenge, Cheletenham, Edward Elgar Publishing. BRW 2006, BRW., Volume 28, issues 40-49, New York, IAP. Corsi, P, Christofol, H & Richir, S 2013, Innovation engineering: The power of intangible networks, New York, John Wiley & Sons. Courvisanos, J 2012, Cycles, crises, innovation: Path to sustainable development a Kaleckian- Schumpeterian synthesis, Cheletenham, Edward Elgar Publishing. Fitzgerald, B 2010, Access to public sector information: Law, technology and policy, volume 2, Sydney, Sydney University Press. Gibbons, D 2007, Communicable crises: Prevention, response, and recovery in global arena, New York, IAP. Kaye, J & Quinn, S 2010, Funding journalism in the digital age: Business models, strategies, issues and trends, New York, Peter Lang Krishna, T 2007, Science, Technology and the diffusion of knowledge: Understanding the dynamics of innovation systems in the Asia Pacific, Cheltenham, Edwards Elgar Publishing. Newton, P 2008, Transitions: Pathways towards sustainable urban development, Collingwood, Csiro Publishing. OECD 2010, Performance-based funding for public research in tertiary education: Workshop Proceedings, OECD Publishing. Petty, R & Enrightm, M 2013, Australia’s competitiveness: From lucky country to competitive Country, Hoboken, John Wiley & Sons. Szirmai, A., Naude, W & Goedhuys, M 2011, Entrepreneurship, innovation and economic Development, New York, Oxford University Press. United Nations Educational 2010, Unesco science report 2010: The current status of science around the world, Paris, UNESCO. Uyeda, C 2010, Australian master environment guide, Sydney, CCH Australian Limited. Wallace, L 2008, Finance and development, June 2008 – Volume 45, Issue 2, Washington, International Monetary Fund. Read More

The R&D from private sector ought to be increased so that there can be improved performance of the private sector consequently, resulting in improved innovation. Lack of government policy on innovation Issues facing Australia are argued by some knowledgeable observers to be aggravated by lack of clarity, and tension between education, science as well as industry policy. These issues remain for those who have a more complacent perception of Australia’s innovation performance. Despite the increase in Australia’s trade terms since 2003 owing to rising goods prices, the rate of production growth has decreased compared to 1990s and the economy is now prone to vagaries of international commodity markets as well as assumptions regarding the trouble-free growth of China and India as consumers of these commodities (Bessant & Venables, 2008, p.107). There have been several efforts to get a more interactive model of innovations among various government initiatives to bolster innovation performance.

The importance of networking between universities and firms, the significance of private intermediary knowledge brokers in commercialization of university research; maximizing utilization of infrastructure aid for innovation; as well as greater role of funding organizations in changing dissemination of information on innovations appreciated by government. Without active involvement of these stakeholders there will be little innovation in Australia. Government’s research centres The Australian Research Council’s (ARC) “Linkage schemes, as well as government’s cooperative research centres (CRC) programmes are public-private partnerships designed to enhance movement of knowledge between private and public sectors.

166 foreign companies and 615 Australian companies and industries collaborated with universities in proposals submitted under ARC’s “Linkages Projects” in 2005. The ARC financed a total of $261 million to “Linkage” scheme between 2005 and 2006, with in-kind as well as cash contributions from participating partner organizations more than doubling this amount (Bessant & Venables, 2008, p.108). Even though this scheme looks appealing to businesses, practically difficulties will always be experienced in their management, particularly regarding research priorities as well as ownership of IP rights.

There is a fundamental problem with information flow owing to weak linkages between firms and research institutions. This problem is a challenge for universities, government as well as intermediaries (OECD, 2010, p.86). A significant problem for the government is to compliment the current cooperative research centres arrangement with other CRCs between the groups of firms. There is also a need to strike a strong balance between policies regarding knowledge generation as well as technology invention, technology diffusion, technology adoption as well as policies for knowledge movement.

Universities in Australia face a number of challenges regarding research and innovation. Large universities are the only ones equipped with the required scale as well as expertise required to develop competent commercialization units. If only large universities are the only ones equipped with the resources to conduct research what about small universities this implies that there is large gap in terms of resource allocation in universities. It is worth taking note that intellectual property management in research institutions and universities is not consistent and entail high transaction costs for firms that deal with them leading to fewer incentives for firms to collaborate.

Evidently, firms also lack commercialization capabilities, particularly smaller firms which do not have experience of collaboration (Bessant & Venables, 2008, p.108). Smaller firms ought to have commercialization capabilities so that they can be competitive. Government encourages non-profit organizations AMIRA International, a non-profit organization in the private sector was established in 1959 (Bessant & Venables, 2008, p.108).

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