IBSA - Innovation & Business Skills Australia

Senator the Hon Kim Carr
THE ART OF INNOVATION - ADDRESS TO THE NATIONAL PRESS CLUB

Speech
Senator the Hon Kim Carr
03 Sep 2008

My aim in innovation is not to flood the country with shiny gadgets, but to change the culture.

Of course we will need new technologies to answer the challenges and grasp the opportunities that lie before us.

But we will also need new institutions, new forms of community – new ways of understanding ourselves and our world.

In all of this, the humanities, arts and social sciences are critical.

They will give us the ideas, the language and the self awareness we need to make change happen.

It is no accident that three of our four big reviews have been led by people with social science and humanities backgrounds – Dr Terry Cutler, Steve Bracks, and Professor Roy Green.

Professor Mary O’Kane, who reviewed the Cooperative Research Centres Program, might be forgiven for thinking she was the token engineer.

'Humanities, arts and social sciences' is a bit of a mouthful, so I hope no one will be offended if I occasionally just call them the humanities for short.

These disciplines have to be on the same footing as the physical and life sciences.

This is more than a matter of courtesy.

It is a matter of necessity.

These are difficult times.

We have climate change to deal with.

We have globalisation to deal with.

We have an ageing population and water scarcity and social disadvantage to deal with.

And now we have a worldwide economic slowdown to deal with as well.

There is no doubt in my mind that we can steer our way through these difficulties and emerge stronger on the other side.

But we all have to together.

That means drawing on the creativity and intelligence of all Australians – regardless of where they live, what job they do, or what discipline they work in.

Going backwards

Difficult times call for extraordinary efforts, so it was incredibly frustrating during nearly twelve years in opposition to see Australia’s innovation efforts falter.

I was obliged to look on:

• while we became the only OECD country in which public funding for tertiary education declined;
• while business investment in R&D fell for the first time on record (1996/97 to 1999/00); and
• while Commonwealth spending on research and innovation as a share of GDP dropped 22 per cent.

Victory on 24 November last year was very sweet indeed, but my joy was tempered by the knowledge that, compared to the world’s best:

• Australia has less than half as many PhDs in the workforce;
• our firms are a third less likely to innovate; and
• we spend less than half as much on R&D as a share of GDP.

We seemed to be trapped in a downward spiral in which one problem compounded another.

How could we get more PhDs working outside the academy when growth in research degree commencements had stalled?

How could we increase business innovation when research collaboration between industry and universities was going backwards?

The challenge is not just to produce a healthier set of numbers, but to make a difference on the ground.

How do we bring about the structural change and cultural reform needed to make Australia – and Australian research – more productive and competitive?

Ten-point plan

This is not a question that came to me on the morning after the election.

It is a question we’ve been thinking about for a long time.

In April last year, Kevin Rudd and I released a ten-point plan to boost Australia’s innovation performance.

After nine months in government, that plan has given birth to some very pleasing results.

We said we would invest in knowledge creation, and we have.

• For example, by doubling the number of Australian Postgraduate Awards and creating 1,000 Future Fellowships for mid-career researchers.

We said we would accelerate knowledge transfer, and we have.

• For example, by establishing Enterprise Connect, Climate Ready and Re-tooling for Climate Change – all of which promote the development and application of new technologies in industry.

We said we would internationalise Australia’s innovation system, and that’s just what we’ve done.

• For example, by opening Australian Research Council and CSIRO programs to overseas participants, by campaigning to host the Square-Kilometre Array radio-telescope, and by establishing a dedicated innovation presence in Brussels and New Delhi.

We said we would strengthen innovation infrastructure, and we have.

• For example, through the $500 million Better Universities Renewal Fund to give campuses an immediate boost, and the $11 billion Education Investment Fund for the long term.

We said we would increase innovation skills, and that’s what we are doing – not just in my portfolio, but in Julia Gillard’s as well.

• For example, by doubling the number undergraduate scholarships, delivering new business improvement services through Enterprise Connect, and offering students incentives to study maths and science and to become maths and science teachers.

We said we would improve the governance of the innovation system, and we have.

• For example, by establishing Industry Innovation Councils and by appointing a group of distinguished scholars to advise the ARC.

I announced our first innovation council yesterday – It will focus on the built environment.

Support for the humanities

It’s early days, but I don’t think this is a bad return on our promise to set new directions for innovation in Australia.

That said, I can already imagine people in this audience asking, "What have the Romans ever done for us?"

Let me stress again that the humanities, arts and social sciences are absolutely central to the project we have embarked on.

They have at least four different roles in the innovation process.

First, they drive innovation themselves:

• especially the kind of incremental, process innovation that frequently goes unnoticed;
• especially in the service sector; and
• often in unexpected ways – I love the story about how creative writers at Edith Cowan University are helping Alzheimer’s patients recover and retain memories.

Second, they raise the standard of scientific and technical innovation by shining an inquiring and sometimes critical light on its ethical, historical, cultural and social consequences.

Third, they give people the skills they need to use the innovations coming out of our laboratories and R&D centres.

And fourth, they empower individuals and communities to deal with change – whether by adapting to it, or by asserting their own view of how it should happen.

We simply can’t achieve the goals we’ve set ourselves without you.

That’s why these disciplines have loomed so large in our work to date.

We have revised the National Collaborative Research Infrastructure Strategy roadmap to include a new capability – Transforming Humanities, Arts and Social Science Research.

This is the first time these disciplines have been recognised by NCRIS.

The new roadmap will be released tomorrow.

We’ve included a Creative Industries Innovation Centre in the Enterprise Connect network.

Among other things, it will foster collaboration between researchers and cultural entrepreneurs.

We’ve restored humanities representation on the Prime Minister’s Science, Engineering and Innovation Council by appointing Professor Graeme Turner.

The six-member ARC Advisory Council I mentioned a moment ago includes an historian and a musicologist.

One of my first actions was bringing transparency to the ARC grant approval process.

This benefits all researchers, but it is especially important for the humanities.

All nine of the ARC projects vetoed by Brendan Nelson under the cover of darkness in 2004 and 2005 were in these disciplines.

Studies of Asia, gender, politics and the media are clearly far too subversive for Dr Nelson.

As for me, I think the world is full of outdated ideas and practices just crying out to be subverted.

We’ve also scrapped the previous government’s ill conceived Research Quality Framework, which made no adequate provision for the humanities, arts and social sciences.

Its replacement – Excellence in Research for Australia – will use a combination of metrics and proxies for these disciplines.

The recently established Indicators Working Group has set up one sub-committee for the humanities and social sciences, and another for the performing and creative arts.

They will develop quality measures specific to these disciplines.

There are still gaps in our understanding of how the humanities contribute to the problem-solving which is central to the innovation process, so I’m counting on your input to these sub-committees.

International Science Linkages Program

Finally, we’ve evened things up by giving the humanities, arts and social sciences access to ARC grants that were previously only available to the physical and life sciences.

Just to show I’m serious about this, I’d like to announce that I am also opening my Department’s International Science Linkages program to these disciplines.

Up until now it has only supported international collaboration on science and technology – in part by funding activities through the Australian Academy of Science and the Academy of Technological Sciences and Engineering.

Starting today, the program will also support collaboration involving the humanities, through a new $1 million funding stream.

It will pay for exchanges, fellowships, conferences, symposia and other activities under the aegis of the Academy of the Social Sciences in Australia and the Australian Academy of the Humanities.

The first step will be to include these academies in discussions on research collaboration between the Australian Government and the European Union at the end of this month.

The name of the program can stay as it is.

It’s our understanding of what 'science' means that needs to change.

As far as I’m concerned, it does not mean test-tubes and white coats. It means knowledge of the world.

The NIS Review

Labor’s pre-election plan for innovation contained ten points, but my run-through just now contained only six.

Three points are missing because – as we said in April last year – they were to be the subject of a formal review.

Those three points are:

• focusing incentives for business R&D;
• developing a set of national innovation priorities; and
• improving government innovation programs.

It was never our intention that the review should consider just these three things.

When the review panel was appointed in January this year, it was charged with examining every aspect of the innovation system.

And without giving too much away, I can tell you it has also devoted considerable thought to the last of our ten points – Government procurement.

The panel delivered its report last week.

The Government will respond with a policy White Paper by year’s end.

You will understand that I can’t talk in any detail about the content of the report until I’ve discussed it with my colleagues, but I would like to underline just why it is so important.

International comparisons

The realisation that innovation is the key to lifting productivity and competitiveness – to raising living standards and increasing wellbeing – has led countries around the world to take stock of their innovation systems.

The United Kingdom has its Sainsbury Report, Race to the Top, completed in 2007.

The United States has the Augustine Report, Rising above the Gathering Storm, completed in 2006.

The EU has its Lisbon declaration, Towards a Europe of Innovation and Knowledge, adopted as long ago as 2000.

And people aren’t just writing reports.

Developed and developing countries alike are building their indigenous innovation capacity and aggressively pursuing foreign R&D investment.

China and India offer some of the most generous R&D incentives anywhere.

In the nine months since Labor came to office, New Zealand, the United Kingdom, France, Belgium, the Netherlands and Spain have all introduced or extended tax incentives for business R&D.

Japan and the United States have flagged their intention to do likewise.

Under the previous Government, Australia went in the opposite direction.

Between 1995 and 2004, we were one of only three OECD countries to reduce tax benefits for business R&D – and of those three, our cuts were the deepest.

Australia has now slipped to eighteenth on this measure, according to a recent OECD survey of thirty-eight countries.

Spain ranks first, China ranks third and India ranks sixth.

If we drop much further behind the play, we might as well get out of the game – and there are no prizes for those who watch from the sidelines.

Changing nature of innovation

The connection between industrial R&D and the humanities may seem remote, but believe me, it is not.

They are both part of the same innovation system.

It is obvious that scholars in the humanities, arts and social sciences benefit from advances in technology.

Perhaps less obvious is the debt industry owes those scholars, who generate demand for new technologies by building a creative culture – a culture that is smart, curious and unafraid of risk.

In January, the OECD embarked on a two-year project to develop its own innovation strategy.

A progress report published in May drew attention to the changing nature of innovation.

These days, innovation is:

• increasingly collaborative and networked;
• increasingly mobilised by pull from users rather than push from technology;
• increasingly globalised; and
• increasingly dependent for its success on the availability of skilled and creative people.

Innovation is changing in ways that will make the humanities even more central in the future.

You are the ones who will identify and interpret those user needs.

You are the ones who will nurture those creative people.

And you will play an ever-larger role in those collaborations and networks.

We are seeing this happen already.

For example, the CSIRO has found that many of the problems it is working on cannot be solved by focusing solely on the biophysical dimension – problems like water scarcity, resource management and climate change.

If we want to find solutions to these problems, we have to understand the social, behavioural and institutional dimensions as well.

That’s why the CSIRO is relying more and more on economists, human geographers, planners, sociologists and other specialists in the humanities and social sciences to provide the answers.

CSIRO Chief Executive

CSIRO is evolving, and it was a pleasure to announce this morning that its evolution over the next five years will be guided by Dr Megan Clark, who will take up the position of chief executive from January 2009.

This is a fantastic appointment.

Dr Clark is a geologist, a senior executive at BHP Billiton, and a member of the innovation review panel.

She takes a strategic, multidisciplinary view of innovation, and that’s just what we need.

She is arguably the highest ranking corporate technologist in the country – and she has chosen to work for the Commonwealth.

This is a great vote of confidence in our efforts to revitalise Australian innovation.

CRC Review

Another strategic thinker is Professor Mary O’Kane, whose report on the Cooperative Research Centres Program was released last month.

It has much to say about the humanities.

Professor O’Kane endorses the government’s decision to restore public good as a CRC funding criterion.

She believes CRCs should be pursuing social and environmental benefits as well as economic ones.

She also argues that the CRC Program should engage more with small and medium-sized enterprises, the humanities and social sciences, and service industries.

Professor O’Kane recommends several ways of doing this.

One is by encouraging the formation of CRCs dedicated to solving humanities problems.

Another is by establishing a new auxiliary program to help people with little history of collaboration or R&D to identify shared problems, explore potential solutions, and find appropriate research partners.

Users of the program might include people in the service sector, SMEs, and even community groups.

The auxiliary program would support new networks and collaborations that might in time become the basis for CRC bids.

The Government will respond to Professor O’Kane’s report in its innovation White Paper later this year.

In the meantime, I want to thank Mary and her colleagues in the Collaboration and CRC Review Working Group for doing a magnificent job.

Australian Laureate Fellowships Scheme

The CRC Report argues persuasively that we can’t get the best out of our people – or the best return on our research investment – by sticking with the status quo.

There is a lesson here for the entire innovation system.

We urgently need to concentrate our efforts and resources if we are to remain globally competitive – whether in goods, services, or ideas.

That’s why it’s so important to set priorities – as the innovation review panel has been asked to do.

That’s why mission-based funding compacts for universities are so important – they will allow each tertiary institution to focus on its strengths.

That’s why it’s so important to insist on excellence and to measure ourselves against the world’s best.

With this in mind, I am delighted to announce that the Government is establishing a new Australian Laureate Fellowships Scheme.

The scheme, worth $239 million over the next five years, will give top international researchers a reason to come here – or to stay here if they happen to be Australian.

It will tackle big issues and open up new career paths for emerging talent.

Fifteen fellowships will typically be awarded every year.

Each fellowship will be worth around $3 million over five years.

This will allow successful fellows to establish and mentor a research team of up to four postdoctoral and postgraduate researchers.

The scheme is open to scholars worldwide, but most of the work must be done in Australia, where it can most directly benefit the community that supports it.

The design of the new scheme has been informed by the 2007 review of the Federation Fellowships Scheme, which it will replace from here on.

The ARC expects it to open in mid-October.

Why the humanities matter

As I said at the beginning, the humanities, arts and social sciences are critical to solving our most pressing real-world problems.

These are problems so complex that our only hope of sorting them out is through a multidisciplinary effort.

We can’t improve Indigenous health without understanding the social and cultural circumstances of the people involved.

We can’t build better cities without understanding how people live, how they want to live, and how the different parts of their lives fit together.

We can’t adapt to global warming without understanding what people’s capacities are, how they interact, and what motivates them.

The humanities, arts and social sciences also have important political work to do.

They can give a voice to people who might otherwise be silent.

They can articulate the needs of people whose needs might otherwise be overlooked.

They can defend the rights of people whose rights might otherwise be denied.

Without them it would be impossible to create an innovation system that was truly inclusive, democratic and just.

Without them life would also be pretty dull.

My cultural activities are fairly restricted these days, but a couple of things I’ve enjoyed recently are:

• Peter Temple’s novel The Broken Shore; and
• the Bell Shakespeare Company’s production of Hamlet.

The first showed me a world similar enough to my own to feel familiar, but different enough to make me look at my own world with fresh eyes.

The second reminded me where a great deal of our language comes from, and left me with a strong sense of the continuity between past and present.

Did the book and the play turn a dollar? I hope so.

Did they add to the nation’s bottom line? No doubt, in a small way.

Is that why I enjoyed them? No, it’s not.

I believe the creative arts – and the humanities and the social sciences – make a terrible mistake when they claim support on the basis of their commercial value.

Whatever they may be worth in the marketplace, it is their intrinsic value we should treasure them for.

We should support these disciplines because they give us pleasure, knowledge, meaning, and inspiration.

No other pay-off is required.