research / ACRI Opinion

By Marina Zhang, Roy Green and Mark Dodgson

Note: This article appeared in InnovationAus on October 23 2023.

The development of Australia’s innovation capability is connected to the pressing need for environmental sustainability due to global warming, and rising security concerns stemming from reliance on supply chains dominated by China, and related vulnerabilities of trading partners.

These arise in the context of escalating geopolitical tensions, particularly between the United States and China vying for technological supremacy. To address these simultaneous challenges, Australia needs a proactive policy framework to enhance its innovation capability as a form of insurance policy preparing for an uncertain future.

This framework should underscore the multi-dimensional aspect of innovation, foster essential collaboration between diverse stakeholders within innovation ecosystems, and align national interests with long-term sustainability goals.

A nation’s innovation capability is its consolidated capacity to generate, disseminate, and commercialise new ideas, technologies, products, services, and processes. As a multifaceted activity engaging a variety of stakeholders, innovation has evolved into a complex, iterative endeavour requiring concerted efforts from a diverse array of actors in innovation ecosystems.

These actors include governments, universities and research institutes, large corporations, small and medium-sized enterprises (SMEs), entrepreneurs, investors, non-governmental organizations (NGOs), and philanthropic organisations. 

Because of this complexity, consideration of Australia’s innovation capability must extend beyond questions of its efficiency, in terms of turning inputs into innovation into outputs, to issues of its effectiveness, especially how it integrates into international supply and production chains and deals with sustainability challenges.

This article argues how Australia’s national innovation capability depends on the performance of Australian firms in the context of an increasingly narrow and precarious trade and industrial structure, and systemic productivity slowdown and associated wage stagnation.

Using the example of clean energy transition, it contends that government policy must address how actors in Australia’s innovation ecosystems engage nationally and globally in the face of massive political and technological uncertainty.

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Dr Marina Zhang is Associate Professor – Research at the Australia-China Relations Institute, University of Technology Sydney.

Professor Roy Green is Emeritus Professor and Special Innovation Advisor at the University of Technology Sydney, where he was Dean of the UTS Business School. 

Professor Mark Dodgson, AO is currently Emeritus Professor at the University of Queensland; Executive-in-Residence at the University of Oxford; and Visiting Professor at Imperial College London.