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The future of the wide brown land: How our nation’s unique conditions affect our ability to innovate

(Sponsored content) While innovation is often driven by market forces, the fabric of a country is equally — if not more —important in generating new ideas and bringing them to fruition. Within Australia, we have a unique combination of cultural, geographic, regulatory and economic factors that both drive, and hold back, innovation. In October 2020, Governance Institute of Australia and LexisNexis hosted a roundtable to truly get under the skin of innovation in Australia. Featuring 12 of the country’s foremost thought leaders and innovation experts, the conversation traversed the full landscape of the Australian experience and what innovation means in the sunburnt country.

What follows is a broad sketch of some of the salient points of discussion. To read the full report and recommendations, download the whitepaper here.

The notion of a fair go is intrinsic to Australian culture, and is deeply entwined with our ability to successfully innovate. However, it seems there is a gap between the idea and the reality on the ground. Due to a range of factors that include our unique climatic and geographic conditions, as well as the regulatory environment and social fissures such as those with our First Nations peoples, the innovation melting pot is not as inclusive as it could otherwise be.

There is an opportunity for indigenous and community groups with native title rights to engage with, and play a significant role in the development and execution of new technologies in the renewables sector. In practice, however, comparatively few groups have the capacity, capability and governance structures to bring these engagements to fruition. Similarly, access to digital resource remains heavily skewed towards our major cities, and away from regional and rural areas; particularly those with lower socio-economic backgrounds.

As a country, Australia has always enjoyed a high level of economic and social stability; we have a mild climate, quality healthcare system, strong rule of law and comparatively high salaries compared with many other countries around the world. But while these conditions make Australia an excellent country to live in, they mean that there is very little urgency to innovate solutions to problems on a large scale. Whereas many countries innovate through need; such as better defence systems or better weather warnings, many of those imperatives simply do not exist in Australia.

However, one area in which there is a fairly time-bound imperative to innovate is in our generation of sustainable energy sources and away from a decades-long reliance on coal and natural gas. Participants noted the unique mix of climatic and industry-related factors that could allow us to quickly become leaders in the production and export of renewable energy and new energy solutions such as hydrogen.

Australia has a significant amount of uninhabited land that is ideal for renewable energy production. We have excellent solar irradiance and higher wind speeds than in many parts of the world – making the production of solar and wind energy fast and efficient. We are also incredibly well positioned to capitalise on the emerging hydrogen economy. This is a particularly exciting area for innovation because it utilises our existing expertise in the mining and transportation of natural gas and directly translates it to the production of hydrogen, which is commonly also exported in gas form and can even be delivered through existing natural gas pipelines. These innovations have the potential for significant national economic benefit and jobs growth on a large scale, however in order for the required innovation to take place, the issue must be moved further up the national agenda.

There was broad consensus that innovation is not given the priority it deserves at a Government level. The multiple layers of Australian Government, and particularly the division of powers and separation of the State and Federal legislatures, can create multiple layers of red tape that make it difficult for new innovations and businesses to gain traction. In addition, the short-term focus that comes from populist policy making in the election cycle is made worse in Australia because there are multiple state elections and one federal election within any four-year cycle.

Further to these concerns, Australia’s comparatively strict regulatory framework can be seen as a restrictor on innovation. It was noted that a byproduct of the recent regulatory investigations across the financial services and other sectors was the throttling of innovation for many businesses. Businesses were reluctant to risk the possibility of a regulatory breach with new products, systems or processes, and therefore slowed their pace – or in some cases shelved projects entirely. If innovation is to expand and truly thrive in Australia, a new balance between regulation and risk must be found.

Innovation has long been a buzzword in the world of business, and while many businesses want to be seen as innovative, comparatively few are willing to undergo the short-term difficulties associated with bringing those innovations to market. An example of this could be a business looking to bring blockchain into its accounting processes. Before blockchain can even be considered, there may be a number of other platforms and skill sets within the business that need to be modernised ― which, of course, come at cost and may pose revenue and other risks to the core business.

Technological innovations particularly tend to be treated as a financial exercise ― a cycle of build, implement, and reap the rewards on the bottom line. But they need to be treated as living systems that have drastic impacts across processes and operations. If businesses are not willing to take risks and put in significant effort in that regard, then little can be achieved in real terms. It is only by taking and maintaining a clear long-term view of the benefits of innovation, and accepting additional cost and risk, that true innovation can be brought to fruition within Australian businesses.

It seems a level of national introspection required to truly discover our strengths and weaknesses as a country and how our unique natural resources and culture play into them if we are to reach our full potential. Innovation must be inclusive, and as a nation we must adopt a fail-fast mindset and an increased risk appetite in order to bring ideas to fruition faster and accelerate the pace of development. To do this requires the support of both Government and business. Innovation must be moved up the national agenda, and this must be communicated broadly throughout Australia and to the world – even if our systems are not quite ready to support it, signalling the intention is an important piece of the puzzle.

When it comes to innovating solutions to our unique problems, we need less red tape and more courage from our leaders — both political and business ― to enable true innovation to take place. By doing this and continuing to incorporate the cultural, geographic, regulatory and business-related factors that comprise the unique fabric of Australia, we can push innovation forward faster and more efficiently for the benefit of our nation.

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