Towards A New Australian Economy

The theme for the 2012 Australian Innovation Festival is ‘Creating the Knowledge Economy’. The current changes being experienced by the Australian economy make this a timely and relevant theme for industry and policy makers alike. The Australian Innovation Festival provides recognition and focus on the key role that innovation plays in securing our future prosperity.

Australia has a proud history of innovation and the Australian Innovation Festival is an opportunity to celebrate those achievements. However, despite our history and strong economic fundamentals, we should not rest on our laurels. Innovation is about the future, about creating the society and economy that we want for our nation.

In 2010 the Australian Government commenced the Australian Innovation System Report as an annual series of reports on the performance of Australia’s national innovation system. It builds on the commitment by the Government in Powering Ideas: An Innovation Agenda for the 21st Century to produce an annual report on innovation.

Each year, the need to be globally competitive becomes more apparent. This is why the Government is investing in our future prosperity through education, infrastructure, research, innovation and commercialisation.

As a Labor Government we are committed to supporting Australian jobs, improving productivity and boosting competitiveness. While our natural resources will continue to contribute to our economic wellbeing, it is by harnessing the creativity and ingenuity of people that we can create a sustainable competitive advantage. By harnessing the latest technologies and encouraging innovation and investment, more highly-skilled jobs and industries will be created, underpinning our economic growth and future prosperity.

The Australian economy of the future will be different to today’s economy. It will be a clean economy, with high speed broadband underpinning high tech value-adding industries, and it will have a highly skilled workforce. As the Government’s Clean Energy Future plan works to cut pollution and drive innovation and investment in low pollution technologies, the economy will increasingly be powered by clean energy sources and be able to compete in a carbon constrained global economy.

It will also be an economy with a greater focus on our own neighbourhood - the Asian region. The growth of Asia is contributing to the structural changes we are now seeing in the economy, and some of these changes are putting some sectors under pressure. But Asia also represents valuable opportunities for our country.

It is projected the number of middle-class consumers in the Asia-Pacific region will more than treble, from around half a billion in 2009 to 1.7 billion, by 2020. These regions will also become major markets for our agricultural, manufacturing and services exports, and this shift is already well under way. Australia’s services exports to China have grown at an annual rate of about 20 per cent over the past decade. Australia also earned more from providing education, tourism and other services to China last year than from selling coal.

As Asia continues to grow, we can expect Asian consumers and businesses will want to purchase more goods and services from Australia such as capital equipment, energy, agricultural products, business and financial services, education, tourism, health equipment and new technologies.

Australian industry has an important role to play during the current transformation of our economy. The Gillard Government is committed to ensuring the policy settings put in place are right to support industry, promote innovation and investment and to help businesses take advantage of market opportunities.

These policies include: the biggest reform to government support for business R&D in more than a decade, the new R&D Tax Incentive; building the National Broadband Network to deliver high-speed internet services to all business and households; business tax cuts; increased superannuation payments funded through the Minerals Resource Rent Tax; and putting in place the incentives and support necessary to create a clean energy economy through the Clean Energy Future plan. The Gillard Government has invested over $9 billion in supporting science, research and innovation in 2011-12 alone, and we are modernising our transport infrastructure through a $36 billion investment that will enable businesses to deliver products faster and cheaper.

The Government also understands the importance of maintaining the incentives for generating ideas – allowing Australian researchers, inventors and entrepreneurs to be properly rewarded for their hard work. A strong intellectual property system fosters innovation and rewards investment in research. Our new legislation to amend Intellectual Property law, the “Raising the Bar” Bill, was passed by Parliament during the autumn sitting of this year. It will raise patent thresholds and increase certainty in the validity of granted patents.

In order to make the transition from an innovation into a business easier, Government initiatives are helping to develop an Australian venture capital sector and provide risk capital to build innovative early stage Australian companies that are commercialising Australian R&D. In addition, Commercialisation Australia is assisting Australia’s talented researchers, entrepreneurs and innovative firms to convert their promising intellectual property into successful commercial ventures.

A strong manufacturing sector will continue to remain important for Australia’s prosperity. Australia needs and deserves a high tech and high skilled manufacturing sector that can compete globally, provide valuable jobs for Australian workers and underpin a strong national economy. That is why the Prime Minister has established a Manufacturing Taskforce tasked with setting out a vision for the future of the sector and identifying how best to leverage the Government’s existing policies and programs to capture the opportunities arising from the Asian century.

As a Labor Government, we are implementing policies designed to create the jobs that will underpin the nation’s prosperity far into the future. Innovation is a key component of creating these jobs and industries. The Australian Innovation Festival is an important platform for continuing dialogue and engagement across all industries, as we collectively confront the challenges and seek the opportunities of the future.

I commend all the participants in this year’s Festival and encourage all stakeholders to make the most of the opportunity.