Malcolm Turnbull is absolutely right to draw a link between Australia's future prosperity and our ability to leverage innovation to improve our country's international competitiveness.
The Prime Minister has identified disruption as something to be embraced -- "volatility in change is our friend if we are agile and smart enough to take advantage of it."
It's about time we had a political leader who is prepared to make a serious and sustained contribution to creating a 'culture of innovation', a challenge that has vexed and ultimately eluded all of his predecessors.
Three recent assessments of Australia's capacity to innovate as well as our global competitiveness show that the challenge is very much ahead of the Turnbull administration.
The Global Innovation Index, released last month, has Australia ranked 17th in the world. We're being out-innovated not just by the usual suspects of the United States and the United Kingdom, but also competitor markets in our region like Hong Kong, Singapore and South Korea. New Zealand is more innovative than Australia.
Our below-par performance in innovation is mirrored in the 2015 IMD World Competitiveness index, released earlier in the year. Australia has dropped from 17th down to 18th place. The report looks at economic characteristics such as business efficiency, innovation and effectiveness of infrastructure. Sadly, we've be sliding on this index since 2010 when we ranked 5th.
And now we have the findings of the World Economic Forum's Global Competitiveness Report, which are similarly disappointing. Yes, we have moved up one place on last year but there's no comfort to be found in a global ranking of 21.
All of the data from multiple sources reinforces the extent of Australia's innovation and competitiveness challenge.
We all know the mining boom is over. Some may say that "coal is good for humanity", but the reality is that innovation is the pathway to the high-paying jobs of the future. When you consider our unemployment rate is stuck above six percent, and above 20 percent for young Australians in some outer urban and regional areas, that we are not further down the road in creating these jobs is unforgiveable.
The question remains -- what's the plan to lift up the knowledge-intensive sectors of the Australian economy to fill the void left by a slumping resources sector and the loss of industries such as automotive manufacturing?
The Prime Minister has installed Christopher Pyne as minister for innovation, assisted by the youthful Wyatt Roy who has hit the ground running with a policy brainstorming 'hackathon'. Their task is to create an environment which provides the expertise and networks, the risk-takers, incentivising policy settings -- and the money -- to vault Australia up the global rankings as an innovation hub.
The best of ministerial intentions will amount to little if they're not supported by an integrated multi-agency approach. We'll be looking to see how effectively the various agencies of government -- particularly the central agencies of Treasury and Prime Minister and Cabinet -- can work together to meet the innovation and competitiveness challenge.
From Toronto to Tel Aviv, Santiago to Singapore, global competition is fierce. Fortunately Australia has a fine, if ad hoc tradition of delivering innovation successes. From the development and commercialisation of the refrigerator in 1856 through to spray-on skin, the cervical cancer vaccine and in-demand technological advances like Wi-Fi and the first quantum bit, we have a strong platform from which to build our culture of innovation and entrepreneurship.
The importance of innovation in policy as a catalyst for delivering reform should not be overlooked. The UK's Patent Box scheme is a compelling case study. It means if you innovate in the UK, you pay half the going corporate tax rate on the income stream from the innovation.
By prioritising innovation as a driver of change and a key determinant of future economic growth, the UK has delivered a business and innovation-friendly environment for entrepreneurs while also making that market a priority destination for foreign investment.
The lessons for Messrs Turnbull, Pyne and Roy are clear. It's something we simply must get right -- jobs are at stake and our place in the Asian Century is on the line.Suggest a correction