AUSTRALIA’S INNOVATION FUTURE

ROY GREEN, UTS BUSINESS SCHOOL

ANZAM SYMPOSIUM JUNE 2016

PRECARIOUS FUTURE

Contributions to average incomes growth: Australian Treasury

FLAT WORLD... OR SPIKY

‘Half of current jobs will not exist in 10 years time…’

- Oxford Martin Institute

MANUFACTURING MATTERS

R&D

SKILLS

TRADE

Population Manufacturing*

Scandinavia 23 million 5 companies

Australia 23 million 0 companies

Manufacturing companies in the Fortune Global 500, 2011 annual ranking

GLOBAL VALUE CHAINS

> Vertically integrated manufacturing is being superseded by global production networks and value chains

> ‘Micromultinationals’ capture value in global value chains through ‘smart specialisation’ and clustering

> This is Australia’s future manufacturing opportunity, increasingly interrelated with ‘intangibles’

CAPTURING VALUE

Pre-production

intangible

Production tangible

activities

Post-production

intangible

MANUFACTURING ACTIVITIES

VALUE ADDED

1970s2000s

R&D

R&D

Logistics:

purchase

Production

Marketing

Logistics

Pre – or after –

sales service

Source: Veugelers 2013

8

COMPETITIVE ADVANTAGE

> Competitive advantage is gained through

technological change and innovation, such as

‘Industry 4.0’

> Also non-technological innovation

> business model innovation, design and systems

integration, high performance work and

management practices

> Such innovation must go beyond continuous

improvement and become transformative

INVESTMENT IN KNOWLEDGE

% of GDPOECD composite index

of Higher Ed, R&D, ICT

spending

6.8%

6.1%

5.5%

4.7%

4.1%

NATIONAL INNOVATION SYSTEM

Government

Finance Research

Enterprises / Clusters

SENATE REVIEW 2015

> $9.7 billion, research & innovation

> Spending across 13 portfolios

> 150 Budget line items

> 60 innovation reviews in 15 yearshttp://www.aph.gov.au/Parliamentary_Business/Committee

s/Senate/Economics/Innovation_System/Report

‘Seriousness of purpose’ in PM's innovation roundtable

by Ben Potter Australian Financial Review, Oct 16 2015

“For me that symbolised the seriousness of purpose of our

new Prime Minister in venturing into this space and making it

a key element of his government's program,” said Professor

Green. “This will be a differentiator for him not just for

symbolic reasons but because we have reached a point in our

economic history where measures in this space are

more urgent and essential than ever.”

3.32

3.19

3.19

3.18

3.15

3.02

3.01

2.99

2.98

2.90

2.79

2.77

2.68

2.67

2.66

2.64

2.6 2.8 3 3.2 3.4management scores

US

Sweden

Japan

Germany

Canada

Australia

France

Great Britain

Italy

Poland

Portugal

Ireland

Brazil

India

Greece

China

Not statistically different *

*

Global management performance

3.32

3.19

3.19

3.18

3.15

3.02

3.01

2.99

2.98

2.90

2.79

2.77

2.68

2.67

2.66

2.64

2.6 2.8 3 3.2 3.4management scores

US

Sweden

Japan

Germany

Canada

Australia

France

Great Britain

Italy

Poland

Portugal

Ireland

Brazil

India

Greece

China

Not statistically different *

*

Global management performance

Large, global companies

Significant plant autonomy

High levels of skill &

education

Better management is associated with:

Australian management performance gaps

2

2.2

2.4

2.6

2.8

3

3.2

3.4

3.6

3.8

4

Australian score

Global best performing country score

OperationsManagement

Performance Management

PeopleManagement

OperationsMetrics

PerformanceMetrics

PeopleMetrics

Australia

Global best

Australian management performance gaps

2

2.2

2.4

2.6

2.8

3

3.2

3.4

3.6

3.8

4

Australian score

Global best performing country score

OperationsManagement

Performance Management

PeopleManagement

OperationsMetrics

PerformanceMetrics

PeopleMetrics

Australia

Global best

2

2.2

2.4

2.6

2.8

3

3.2

3.4

3.6

3.8

4

Australian score

Global best performing country score

OperationsManagement

Performance Management

PeopleManagement

2

2.2

2.4

2.6

2.8

3

3.2

3.4

3.6

3.8

4

Australian score

Global best performing country score

OperationsManagement

Performance Management

PeopleManagement

‘Instilling a talent mindset’

‘Using creativity and design-based thinking to solve complex problems is a distinctive Australian strength that can help to meet the emerging challenges of this century.’

Australia in the

Asian Century, 2012

BUSINESS-UNIVERSITY INTERACTION

CONTRIBUTING TO INNOVATION (% FIRMS)

SYDNEY’S CREATIVE PRECINCT

2009 > sketch 2015 > becomes reality

entrepreneurshipMBA

A unique 1-year intensive MBA designed forentrepreneurs and innovators

KEY POLICY CHALLENGES

Identify areas of existing and potential competitive

advantage (Knowledge Foresight)

Support SME participation in global markets and value

chains (Micromultinationals)

Invest in knowledge creation, exchange and

engagement (Innovation Ecosystem)

Promote design, technology and business model

innovation (Business Transformation)

Upgrade management capability and integration of

workforce talent (Creative Leadership)