In this special edition, we hear from the National Innovation Policy Forum patrons, David Thodey AO and Catherine Livingstone AC. We reflect on the 2023 NIPF event (also hosted by Cooperative Research Australia), discussing the practical outcomes that were being sought from the last forum and setting them in the context of ‘where to from here?’ David and Catherine both reflect on culture, risk tolerance, and the layering of process, regulation and legislation and its impact on innovation.
We touch on the three main sessions for the 2024 Forum, being Sharing Risk, Addressing the Missing Middle and An Australian Business Model.
They make a call for more leadership across the community, business and public sectors to define and lead a new model for Australia Inc. rather than waiting for politicians to define or impose political rather than bipartisan policy solutions. How we do we challenge ourselves to drive change? David points to the lack of capital coming into the economy which should be a catalyst for change with Catherine noting this creates a hollowing out that is accelerating but hidden from view by favourable trading conditions.
The opportunity is for us to lead the conversation for how Australia (re)positions itself and defines its role to contribute to the betterment of Australian society and to contribute to the region and the world. We hope that as listeners, forum participants and ecosystem actors, will be provoked to drive us towards a higher performing innovation ecosystem and greater impact from technology transfer activities that can underpin Australia’s future.
Transcript
CB: Hello everyone, and welcome to this special edition of Tech Transfer Talk. My name is Cameron Begley, Managing Director of Spiegare, a technology transfer advisory firm. And in anticipation of the National Innovation Policy Forum in Canberra on the 25th of November, we’re joined again by the patrons of this event, David Todey and Catherine Livingston. Catherine and David, welcome to the podcast.
CL: Thanks, Cameron.
DT: Hi, Cameron.
CB: Thank you. It’s great to have you both join us again on the podcast. The theme of this year’s forum is ‘policy Innovation to foster a new Australian business model’. So, to get the barge away from the wharf today, it might be good to pick up from where we left off in 2023. And to that end, Catherine, maybe you could take us through where you feel we’re starting from.
CL: Well, I think we were quite focused in last year’s forum and rather than trying to solve the huge innovation problem, we focused on some areas which were capable of action. So, the policy consistency issue, the concept of sharing risk, the concept of government as a demanding customer, these were all elements that were consumable, if you like, and manageable. And they were around the focus of the translation of technology being our weakest point in the system. So, we tried to be quite practical and focused.
CB: Indeed. And David, in amongst the priorities that Catherine mentioned, the ‘culture’ word looped around the room last year…
DT: It did.
CB: Which is less tractable in the short term, but it’s a necessary condition for success.
DT: Yeah. No, absolutely, Cameron, and I think that, you know, when I’m out there, dealing with startups or researchers, there’s still an incredible amount of innovation and there’s wonderful people out there who are just getting on and doing it, which, I think it’s just so important. I wish we were celebrating success a little bit more. I think we need to keep finding opportunities to celebrate each other’s success and building people up, and not have state wars and things like that. So, yeah, I mean, making progress, but lots more to do, lots more to do.
CB: Yeah, indeed, indeed. And I think the timing this year is a little bit unique compared to last year, in the sense that we are clearly coming into an election. And in that context, there’s a little bit of uncertainty about who will be, who will form the next government and which parties, etc. That context, though, also presents opportunity, because we have a bit of a moment here to talk about the policy needs of the innovation ecosystem and the policy needs of innovation. Catherine, do you have some thoughts there on what’s happening at the moment and why we don’t seem to have it quite right yet?
CL: Well, this is, this is the hard nut to crack, and it does actually lead to the theme for the forum this year. So, we spend a lot of time talking about innovation and the, the components and, and to those of us who talk about it a lot, it’s actually very clear. However, it is, it’s demonstrably not clear to those tasked with policy. And I make that generalisation, and I admit that’s a generalisation. Possibly because they see innovation as somewhat separable from the rest of the economy. We would say it is the economy. So, the thought is to take it up a level and say ‘Okay what’s Australia’s business model?’ and ‘How do we make sure that we have a viable and sustainable business model?’…looking to the future, possibly learning from the past, not assuming that the past is a predictor of the future.
CB: No, no, I, I sense what you’re getting towards there, Catherine, is a phrase I have in my mind, which is ‘What got us here, may not get us there’, wherever there might be. And part of the question is, I think, ‘What is there?’ or ‘Where is there?’… David? Because it might be different for different people.
DT: Yeah. Yeah. No, I, I think absolutely right. I mean, I agree with Catherine. We’ve got to lift at a level because, you know, the truth is that, you know, the, we’re challenged in the economy. Productivity is dropping. We’re not, you know, building new industries. And if we just keep talking about innovation, just R&D, that’s not getting to the bigger challenge we have is which is directly related to, you know, quality of life…cost of living. And we need to be investing in these, new innovative opportunities. And yes, I agree with Catherine. if we had a good policy framework, I think we’d be better. But we’ve just got to get on with it, and, and I think that’s my, rallying cry is let’s, let’s, you know, let’s celebrate the R&D we are doing, which is wonderful. And it’s the translation and let’s, let’s support each other because that’s where we can really make a difference. And, I don’t think we can sit around waiting for, the perfect policy at all.
CB: No, no, we shouldn’t let the perfect get in the way of the good.
DT: Absolutely not.
CB: Would it be a little bit of that theme too. There are three sessions for our conversation next week at the Forum and other sessions to unfold in 2025. But those three sessions are around sharing risk, addressing the missing middle, which was, I think, a bit of a rallying point, 12 months ago. And the Australian business model, which, both of you just touched on. What are you hoping to hear in amongst those three sessions? Are there particular things front of mind for you that you’re hoping might bubble through from the discussions next Monday?
DT: Well, I’ll have a go, Catherine. And then we can, I’ll throw to you. But, yeah, look, I think that on the sharing risk side, I think we’ve got to go with this attitude of finding opportunities to work together more and, and, cross some of the boundaries, be it, academia to industry, public sector, public-private partnerships. I think there’s more opportunity in that sharing risk or working together to really drive through, you know, all the, stages of innovation, development. So, I think that’s a really important area, going forward in terms of, you know, the missing middle. Look, we just need people with aspiration. You know, we do need to be part of this international community. It’s you can’t just do medical research here in Australia. You’ve got to be looking across the globe. So, and we got to be looking for people who can invest here and may help us make a difference. And I think we talked about the Australian business model. What do you think, Catherine? I mean, is that well with you?
CL: I think, almost starting with the conclusion, which is, well, what is Australia’s business model? And as you said, how are we going to create the value that’s going to support our society and particularly, the social side of society, but just the wellbeing of the Australian population. It’s actually quite expensive. And I have to create the value, which is going to enable us to have the standard of living that as a country we aspire to. So, where’s that value going to come from? And so, you then work back to say, well, actually we’ve got a missing middle here. We don’t have those corporations. And we’re not developing the diversity in the economy. So, it’s yeah, it’s the missing middle is a sort of proxy for where’s the diversity coming from? And then you go to the sharing of risk, and we see more and more regulation and more and more legislation which is becoming increasingly prescriptive. So, we’ve lost this sort of principles-based approach to the economy. And it’s almost as if we’re trying to design risk out by having all of these rules and regulations, rather than how do we manage a level of risk and what level of risk will our business model need? And what can we tolerate?
CB: Yeah. Yeah. It’s really interesting you raised that. I would contend the risk tolerance in the innovation system is really low in this country. We don’t manage risk. I think we generally avoid it. And one way to avoid it, I think, Catherine, to your point there, is to layer it with what I’ll call process, which you call regulation and legislation. But if I can run the process hard enough, I can squeeze every drop of risk out of this transaction. And of course, in innovation, it’s inherently risky just by its very definition.
DT: But is so true. And I mean, just to reinforce again what Catherine is saying, but if you’re clear about what you’re trying to achieve or the outcome, I mean, either as a nation or a business or, then then you, concentrate around that and then you manage to get the conclusion. And, and I think that that is something we need more of. I think we need to have a higher shared aspiration that I don’t think I need the political process to do it for me. I think we can define that. And so, the more we can step up and be counted for that, I think then people will follow. But yeah, we don’t need regulation. I agree. Yeah.
CB: Well, I, I sense in there, David, a need for us to take more leadership in this conversation rather than perhaps be, being regulated.
DT: Well, I, I think that’s exactly right. And, you know, and I think we were mentioning before, you know, we don’t need more policy thrown at us. You know, it’s got to be collaborative because unless we have the shared ability to define what we can be as a nation, then we’re not going to get there, and we need more of that going forward.
CL: So, I would really reinforce that. And as you said, Cameron, we’re coming into a particular time because we’re heading into an election, and it’s up to us collectively and the business community, whatever, to hold our political leaders to account. Or how are they going to nurture and grow the business of Australia? Our business model. And cherry-picking individual policies and virtually ignoring how you build value, how you create value in the economy, is not acceptable.
CB: That’s a great call to arms there, Catherine…
DT: Yeah.
CB: Growing the business of Australia. …And I think therein lies, you know, we have to challenge ourselves because things might be considered to be a little comfortable down here, you know, not a lot of recession over the last 35 years with life’s good. Generally speaking, everyone feels comfortable. How do we drive a challenge to ourselves?
DT: Yeah. Well, I mean, it’s actually quite easy because investment is dropping in Australia. You know, the private sector is not investing capital into the economy, full stop. It’s every bit of data you see. And also, we’re getting less capital coming into the country from offshore. So, it may not be a recession per se is defined. But I tell you, if we stop investing in this country and in new business opportunities into the business of Australia, well, you know, we know what happens. And that is a, very well, that is happening now, unfortunately.
CL: And it’s a hollowing out. And it’s a process that is now becoming relentless and picking up speed. But it’s being masked. Being masked by some, helpful royalty streams tax.
CB: There’s been, you know, thinking through my chemical engineering days, we’ve had undetected corrosion taking place. And what will happen at some point is the corrosion breaks through, which leads to somewhat dramatic failure of the pipe or of the vessel in which things are happening. That strikes me, is the analogy that where we’re painting here.
CL: Well, there’s definitely spalling in the concrete.
CB: There’s spalling of the concrete. There we go. I have a …rather than chemical engineering, excellent.
DT: Construction and chemical engineering, at least. Yeah. No, it’s absolutely right. And, all the data I’m seeing is that there’s just, partly because we’re not creating a conducive environment for people to vest capital, people willing to take risk. There’s enough money around the world, but we’ve, we’re not investing. And, that needs to come with innovation. We’ve got to do the R&D to make sure it, you know, we’re basing it on good, good, science and good, good thinking. But yeah, this is, I think, it’s very serious.
CB: So, the opportunity that presents itself then is for us to start and lead that conversation around redefining Australia’s business model and, indeed, its role around, you know, in the region and in the world. You know, we’re a G20 nation, where, you know, we’re our significant provider of raw materials to the world, yet we are not a great value adder, how do we redefine our role, which secures the interest, the broader interests of Australian society, but also continues to contribute to those around us, you know, the Pacific, South East Asia and others. So, I think that’s the challenge that’s being put to the room, next week and beyond.
CL: Well, I think it’s, we actually have to stop working on the assumption that our political leaders understand how the business of Australia works. The complexities, the interdependence, the underlying causal loops. These, this is knowledge that people, whether it’s people in business, whether it’s in the community, whether it’s in universities, whether it’s in the public service… we all know because we’ve worked in it for decades. We have political leaders who come into roles and do not have that fundamental knowledge and understanding, and yet they then feel tasked and enabled and mandated, to make policy. So, shame on us for somehow making the assumption that they they’re vested with this knowledge and they’re not.
CB: And given, and given that they’re not, the rallying cry then is for business and the non-profit sector and the public service to come together to try and, offer a different vision that people could rally around rather than having the omnipotence of those put in charge to be blessed upon us and hope that the business model hangs together. DT: Well, I think that’s right. I mean, you know, unfortunately, part of this is the political cycle doesn’t lend itself to this sort of thinking, but it is absolutely essential. And if that leadership isn’t coming from the political class, we need to, you know, put it in place. And I think that Catherine is absolutely right. We need to get on with it. And I hope that this, this Forum allows us that, you know, that opportunity to come together to say, ‘Well, we’re going to do it. Let’s get on with it’.
CB: Yeah, my hope is and perhaps, this might resonate with you both, that this conversation encourages the listeners of the podcast, those coming into the conversation, next Monday and even beyond, to actually put their shoulder to the wheel a little bit and engage in these discussions. Because the choice, to some extent, is whether we want to drive this and, take it forward or have it done to us, as you know, an innovation ecosystem or as private sector business owners or as not for profits or indeed as the public service. It’s a choice of which side of that equation we want to lay on, and to that extent, hopefully this will get people’s thoughts provoked in anticipation of a very good and rich conversation next week and beyond.
CL: Well, that’s absolutely the hope.
DT: So, let’s go and make it a reality.
CB: Absolutely. So, with that, David and Catherine, thank you both very much for joining us today and look forward to seeing you in person or virtually, as the case may be, on Monday and in the weeks and months ahead. Thanks a lot.
CL &DT: Thanks, Cameron.