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Why is it so difficult to develop great ideas and inventions in Australia ?
By Lydia Bell
The question was posed in the 2002 Warren Centre Innovation lecture by Dr James Fox, who said Australia has an “abysmal” record when it comes to the commercial skills required to identify market needs, manage product development and optimise manufacture and distribution.
Dr Fox, the managing director of Vision Systems Limited (VSL), said these were the skills of the industrial designer, product engineer and production engineer, rather than the scientist or researcher. He said the dearth of industry-based research and development activity was a “critical missing link”.
Because of the small size of the domestic market, companies wanting to invest in R&D should target customers outside Australia . This required leadership and risk-taking. Apart from natural resources, Australia 's only competitive advantages were world-class science skills and low-cost industrial R&D capabilities, he said.
“Combine this with the necessary ingredients of people and leadership, available venture and seed capital, appropriate economic and taxation settings by the Government, and success will follow.”
“Innovation is not an end in itself. It has the purpose of creating sustainable wealth and rewarding jobs.”
Dr Fox described the history of Vision Systems, who supply contract R&D and technology commercialisation services to manufacturers, and export medical instruments, video surveillance equipment and smoke detectors. The company started with $5 million of venture capital in 1987, and now has revenue of $150 per annum, with offices worldwide. Cochlear and ResMed are more spectacular examples of success, he said, creating wealth in Australia for their stakeholders.
He cited an extensive range of rules established at start up to keep the company on track.
These included targeting the US , European and Asian markets, and basing the business on the manufacture and distribution of high value and high margin products.
A century ago, Australia 's standard of living was close to the highest in the world, and led resource-based and key industrial technologies.
Australia is now a country that applies new technology, but is not active in that area, he said. “I believe we have an underlying culture of asset speculation and punting on ‘El-Dorado', not one of systematically investing in knowledge-based industries which can generate customers across the world, skilled employment and expert revenue.”
The business entrepreneurs of the 1980s were just “asset shufflers and strippers,” he said.
Federal government was also guilty of lowering business expenditure on R&D, when it cut the tax concession from 150 per cent to 125 per cent four years ago.
With only 3000 businesses registering for the 125 per cent concession this year, there are “just too few in industry showing the way,” he said.
Although the government can accelerate investment, “it is people who build businesses, and people who trade – not companies, not governments,” he said. “Without ‘receptors' in industry, the commercialisation of science to the benefit of the Australian economy falls back to high risk and isolated start ups.”
Source: Bell , L. (2002) Why is it so difficult to develop great ideas and inventions in Australia ? In University News , The University of Sydney . Retrieved: 7 August 2003 from http://www.usyd.edu/publications/news/2405News/2405_clever
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