Innovation, we have been told and reassured, is the future of our country’s economic success as Australia moves away from the crusted drip feed of the mining boom. The history of our country’s macroeconomic management suggests, that the realms of economic reform and performance should be tangible, and not vaguely assertive, of some unseen future. This was patently understood by the Hawke, Keating and Howard governments, when they instituted measures which ensured that Australia stepped out onto the world economic stage. For example, the float of the dollar in 1984 was accompanied by the Hawke government’s introduction of Medicare, Keating’s culture wars were accompanied by the introduction of comprehensive superannuation and, of course, Howard ‘got rid of the guns’ and gave us the GST.
What does innovation hold in store for us? Apart from reinstituting the funding to CSIRO and providing a slew of money to other major educational programmes, the Coalition’s vision for an innovative Australia can, a times, seem almost underwhelming.
It was said, in the pre-dot com crash era of Silicon Valley, that the United States was a society built on innovation, but one which did not understand innovation. We want performance outcomes, both economic and social, as well as the luxuries which innovation afford. Innovation itself, is an economic means to an ends, often confused for the end itself. Take for example, the notion that solely STEM based investments will lead to an ideas boom. While certainly the facilitation of tech start-ups will require a healthy dose of STEM improvements, it is certainly not the whole story.
Ed Husic, Labor’s innovation spokesperson, has suggested that particularly disaffected members of society (the casualties of deregulation and the Hawke-Keating recession) view innovation as a job killer, or even worse, as an excuse for the upper strata to accumulate more wealth. However, even Husic, who has been enthusiastic about kickstarting an innovations agenda for Labor, has fallen into the crisp and well tuned speak of the innovation ideal. Husic has been loath to find that members of his party are still concerned with ‘traditional’ policy areas like health, infrastructure and education. This is precisely where our leaders go wrong on big reform ideas like innovation and continuing performance.
The economic rationalists among us will suggest, as Turnbull’s government will, that governments can never pick winners. Both the United States and Finland (the tangibles upon which an innovation utopia are based), facilitated their respective industries by channelling resources to the most promising candidates of innovation. Silicon Valley was not a random springing of ideas brought to fruition by a few. Instead, it was decades of government investment and research (usually defence focused), which effectively made the Valley what it is today. When profit has the final say risks are rarely taken. Take the pharmaceutical industry, where most businesses simply produce variants or slight tweaks to existing pharmaceutical compounds. Novelties (innovative ones), are usually backed by government based research labs, or at the very least, are funded partially from the tax payer’s pockets.
To see government and business at loggerheads is to throw the future performance of our economy to the whims of ideology, not rationality.
What can be done?
Firstly, the deficit does need to be reined in. The Rudd-Gillard government staved off recession through a deficit inducing stimulus package during the 2008 financial crisis. This was possible because Howard and Costello had left a surplus. Given the uncertainty of the global economy, it would bode well to stock up for the next bust cycle. However, such measures should not compromise the basic grants that Australians have come to see as a right. Abbott learned this the hard way with his attempted revamping of Medicare and Pyne’s beloved prognostications on HECS deregulation. Conversely, Morrison’s budget move to cap concessions on superannuation is a measured response, and certainly surprising given the constituency it will be targeting.
Secondly, an innovation plan requires a removal of the contentions of politics and a movement squarely into the realm of policy. This is not as fanciful as it sounds, since the innovation debate is hardly a debate at all – the electorate is more concerned with negative gearing and the RBA’s rate cuts as against the ‘fluffiness’ of innovation. Therefore, Turnbull’s underwhelming sales pitches might actually allow a definitive plan to take stock across a given government’s lifetime.
The snowy mountain river scheme, the floating of the Australian dollar, the GST, and even the carbon tax were all accepted as given programmes by both sides of the spectrum. In fact, most of these programmes continued despite a change in government (exempting the carbon tax).
Thirdly, the form of this innovation boom needs to be tangible. It requires links to bold social programmes which ensure that most, if not all Australians, at least have a shot at reaping the benefits. The institutional supports for HECS, for example, should not be assaulted but fostered – the scale of STEM investment needs to be complemented by the humanities and social sciences, and the essential character of our universities should be that of independence and free thinking. Additionally, innovation should not mean that certain industries should simply fall by the wayside. Cognitive lock should not be on tech start-ups solely, but should be used to foster other industries in agriculture, tourism and maybe even the research and facilitation of eco-friendly manufacturing and infrastructure.
These represent modest moves which would aid the performance of our economy. As members of a generation who will have to live with the consequences of the innovation economy, it is in our interests to see to it that the innovation agenda is more than simply an ethereal vision.