29 May 2015
Professor Brian Schmidt, 2011 Nobel Prize winner, has called for the establishment of a national
innovation agency which can cut across the silos of government, has a long term mandate with bipartisan
support and is focused on what has to be one of the most pressing issues of Australia’s
“If we want to raise our productivity, grow job numbers and increase prosperity, we need to
create high-value added companies to replace our commodity income - that is what an innovation
policy is all about,” he said during his address “What does an innovation policy look like?” at the
ATSE Clunies Ross awards on Thursday night, 28 May, celebrating the remarkable achievements of
Australia’s leading innovators in technological science and engineering.
“I have been highly critical of our innovation policy and our piece meal approach to solving our
innovation policy woes.”
Professor Schmidt noted that in 2008 the Government commissioned a review of the innovation
system which made 72 recommendations in total with almost none of them having been acted
“I am heartened by the government’s announcements made on Tuesday focused on innovation, but I think we still need a large well-resourced group focused on this issue – a ‘National Innovation Agency’ - which can cut across the silos of government, with a long-term life and bi-partisan support.”
Professor Schmidt went on to discuss some of the issues this group needs to develop.
“My observation is that we simply have not developed an entrepreneurial culture here in Australia but there are a whole range of systems that could support technical entrepreneurs.”
“We need the upside risks of being innovative to outweigh the downside risks because failure is at the heart of innovation.”
He noted that in Australia, the price for failure in innovation within a university is typically your research career.
“Researchers need time off for following innovation with a guaranteed pathway back to research within a limited amount of time.”
“Government incentives to research organisations that perform well in industry engagement would also help.”
“Australia’s corporate governance laws appear to place significant barriers on how company directors can invest in risky opportunities, and our bankruptcy laws are particularly punitive, which means the down-side risk is high in Australia for start ups.”
“We also need to think about the policies and structures in place in Australia to help if you choose to innovate. For example, in many universities and CSIRO, you do not own your own IP.”
Professor Schmidt noted that while the number of Angel Investors, incubators, accelerators and Venture Capital funds are increasing, Australia is still highly limited compared to other countries.
But it is not just access to capital holding innovation back.
“Of the 25 venture capital funds created in Australia since 1997, the annualized internal rate of return over a 15 year horizon was -0.85% - with the top ¼ returning 0.65%.”
“Government policies and support to encourage high-quality skill development, mentoring, and access to relevant networks through accelerators and incubators, seems to be a logical policy in
line with what the most successful countries are doing to improve the success of innovative ventures.”
“We also need to have policies to recruit the relevant people from overseas. For example, there are visa regulations that make it hard to attract people to high-tech industry and there are tax
disincentives for ex-patriots who have made it big overseas to return home.”
“StartupAUS’s 2015 Crossroads report found that only 0.2% of Australia’s GDP is contained in high-growth start-ups, compared to the US, for example, where 21% of GDP and 11% of private sector employment comes from high-growth Venture Capital backed companies.
“Many of our successes have left Australia in search of talent, capital and more favourable regulatory environments.”
He noted that, unfortunately, overseas investment in high-tech Australian companies seems to eventually precipitate a move of the company overseas.
“Government policies that help ensure Australian companies stay in Australia is fundamental for the country to receive long-term benefits from its innovation.”
He concluded by congratulating the ATSE Clunies Ross Award winners as the people who are providing the knowledge, skills, mentoring and hope needed for Australia to develop a vibrant
The select group of 2015 ATSE Clunies Ross Award winners are:
Today (29 May), Professor Schmidt and the winners join 200 students and teachers from across
Queensland in the ‘Wonder of Extreme Science” event at QUT, with hands-on activities to excite students
about studies and careers in science and technology.
Issued by: Australian Academy of Technological Sciences and Engineering (ATSE), Melbourne
Enhancing Australia's prosperity through technology and innovation