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WHILE it started with great energy, the National Innovation Summit held in
Melbourne last week ended as something of a damp squib. Business and research
leaders arrived genuinely surprised and pleased at the similarity of the ideas
for action they brought to the table. But their enthusiasm and solidarity was
smothered by a typically bureaucratic response from the Australian
Government—yet another committee to report on options to the industry
minister.

More than 500 delegates attended, most of them having paid A$1250 for
the privilege of discussing the importance of innovation to Australia’s economic
and social future. There was plenty of support for the carefully considered
reports of the pre-summit working groups recommending action from government,
researchers and business.

In his opening speech, industry minister Nick Minchin told delegates how
important innovation was to Australia’s economic future. At the end he returned
to thank them for their efforts. But any who expected purposeful action were
disappointed. The only thing he promised was further discussion—an
implementation group which will take until August to draw up recommendations for
an action plan. That hardly reflects the urgency expressed in the delegates’
speeches.

The scale of the problem was made very clear. Overseas speakers and local
experts all echoed the obvious—that nations which do not embrace the
knowledge economy have very poor economic prospects. Prime Minister John Howard
put his seal of approval on the summit as guest speaker at its dinner. But he
pointedly failed announce any significant initiatives. Hunter Valley textile
workers received much more from Cabinet last week than the national innovation
system.

Education minister David Kemp assured the forum the government is committed
to a rich and diverse system of higher education, but the muttering around me
suggested there is much more diversity these days than richness. The head of the
Australian Vice-Chancellors Committee, Ian Chubb, didn’t mince words about the
neglect of research and education. “Australia fiddles while the world is
learning,” he quipped.

University scientists weren’t the only ones who were outspoken about the
damage being done to the system’s research capacity by budget cuts. They were
firmly supported by business leaders. Chris Knoblanche, the Australian head of
consulting firm Arthur Anderson, told the meeting that science is “losing the
battle for talent”. As a business consultant, he lamented the fact that too many
bright young people were heading into business rather than research careers.
“Before long, business will have nothing to sell.”

The consensus between research and industry even extended to the science
community calling for incentives to stimulate business innovation. The National
Tertiary Education Union (NTEU) sought increased public investment in higher
education as well as incentives for private sector research—”Clear policy
directions with real dollars attached in the forthcoming budget,” NTEU president
Carolyn Allport said.

Sadly, the best those who attended the summit can hope for is an action plan
early next year and the possibility of real dollars in the following year’s
pre-election Budget.

AUSTRALIAN innovation was given a decidedly mixed report card at the summit.
The most cheering feature was the performance of new companies based on
university or CSIRO research. A study by university consulting
agencies—now turning over about a quarter of a billion dollars and
obtaining more than 100 patents each year—found that about 15 new
companies a year are spinning off from academic research. CSIRO had a similar
tale to tell.

By contrast, Jane Marceau, head of the Australian Expert Group in Industry
Studies at the University of Western Sydney, tabled a report entitled
Innovation in Australian Businesses which showed the devastating effect of
the 1996 decrease in the tax concession for research in industry. Manufacturing
research funding fell 10 per cent in the following year and a further 18 per
cent in the year after that. Research spending and employment are believed to be
falling still.

Marceau says that BHP, which operates Australia’s largest private sector
research organisation, shed more than 100 scientists last year. Australia and
New Zealand now rank with Iceland and Poland on the index of business research
personnel as a fraction of all researchers. Now, that is not good news.