Opinion article* published in The Newcastle Herald written by University of Newcastle Vice-Chancellor Professor Caroline McMillen.

INNOVATION is a term that is much used but not always understood.

In essence, innovation is simply about doing things better and adding value to a community, a business or indeed a national economy.

Innovators can be those among us who make new discoveries in their field of endeavour and then go on to translate those discoveries to make a difference – whether to improve human health, social cohesion or the economic bottom line for a regional or national industry.

Innovators add value to businesses large and small through the development of products or services, and to public and private organisations by developing new ways to make things run better through improved systems and processes.  They can work in university laboratories or in the back shed – they have ideas and they are prepared to see them through.

As summarised in the most recent Australian Innovation System Report last year, ‘‘new to the world’’ innovation is critical for businesses to compete in markets for high value-added goods and services, and is strongly linked with the business use of science and engineering skills and industry-research collaboration.  It has also been shown that collaborative innovation with research organisations more than trebles the likelihood of business productivity growth.

Australian businesses that collaborate with research organisations (among others) are 242 per cent more likely to report increases in productivity compared to businesses that don’t innovate.

As Australian industries and businesses are increasingly challenged by new global competitors offering products and services in our traditional markets, it is important to ask how to ensure that Australia is not only the clever country but also how we can become an entrepreneurial nation. 

There is no doubt that Australia has a track record of delivering world-class research and making new discoveries. While we comprise just 0.3 per cent of the world’s population, Australia produces more than 3 per cent of the world’s scientific research publications and we account for 3.5 per cent of the world’s most highly cited publications. 

Despite this strong research base, however, Australia is lagging behind established and emerging international peers in our effectiveness in translating high-quality research into the products, processes and policies that will drive our future productivity, economic growth, health and social cohesion. 

Business investment in research and development in Australia is lower than our international peers at 1.24 per cent of GDP compared to the OECD average of 1.58 per cent.

 Australia is also ranked 21st out of 34 OECD countries for the proportion of ‘‘innovation active’’ large firms that are collaborating with universities or other research institutions. 

In this context, it is important to ensure there is a strong national policy framework that supports engagement and productive collaborations between universities, business and industry. 

This framework would provide the means to harness the remarkable discoveries generated by universities to drive innovation and support strong regional economies and communities. 

Other national systems do this well. A recent report from the National Centre of Universities and Business in the UK highlights a range of mechanisms that have been used in different regions across the UK to build partnerships between researchers in universities with small or large firms to work on projects that have delivered value to all partners.

While we have a range of initiatives in Australia – including the successful Co-operative Research Centres program – that are designed to boost industry-university collaboration, we do not have a national ‘‘joined up’’ innovation system that maximises the value of our very best science, engineering and health research.

The cuts in the latest federal budget to the Co-operative Research Centres program and to our great science institutions including the CSIRO, the Australian Research Council and Defence Science and Technology Organisation, signal that developing such a system is likely to be harder in the years to come. 

What may be difficult to achieve in a tight fiscal environment may, however, be possible in regions where business, industry, community and university can work together to overcome barriers to collaboration.

As a university that is proud to be in the top 3 per cent of the world’s universities, our aspiration is to translate our research and education excellence into tangible benefits for the region. 

It is through partnerships that we will deliver high-value innovation and impact and attract the next generation of entrepreneurs, social innovators and leaders from across the globe to the Hunter Region.

*This opinion piece represents the author’s views