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Innovation strong despite downturn

According to the latest Australian Innovation System Report, Australian performance in research and the quality of their skills are well above the OECD average. Investment in research and development grew at a rate of 12 per cent to $27.7 billion over the dead to 2009.

The report also found Australian entrepreneurship is among the best in the world. R&D spending as a proportion of GDP rose from two per cent in 2006-07 to 2.21 per cent in 2008-09, putting Australia ahead of Britain, France, Canada and Belgium, but behind top innovators Israel, Finland, Sweden, Japan and South Korea.

?The analysis shows Australia has a strong capacity to innovate,? said Senator Kim Carr, the Federal Minister for Innovation, Industry, Science and Research. ?Innovation will make Australia more productive and competitive, and may answer the great challenges of our time such as our changing climate, national security, hunger and disease.?

Senator Carr commissioned the report off the back of the Labor Government?s Powering Ideas, a plan released in 2009 to overhaul Australia?s innovation system, outlining national innovation targets and priorities.

While the report largely supported the Government?s implementation of the plan, it did identify areas where Australian innovation faced challenges.

The global financial crisis damaged innovative activity during 2009-10, with early stage venture capital investment falling 40 per cent. With a resurgent wave of financial instability affecting the markets once again, the availability of venture capital could continue to present problems.

That said, Australian businesses continued to invest in R&D, with annual investment growing by 6.7 per cent over the period.

Australia?s skills shortage was again identified as a barrier to business innovation, with the report suggesting vocational education and training has an important role to play.

The report also found that Australians innovate best when the ideas are second-hand. According to the Sydney Morning Herald companies are ?much more likely to take something that has already been developed and adapt it than invent something themselves?.

And, while collaboration between businesses and universities has increased, the level of co-operation between business and publicly-funded researched agencies has fallen.

Sustainability was also identified as a serious issue for innovation, with ?massive demand? projected for green technologies, products, services and skills in the coming years.

While carbon emission abatement technology and techniques can require a significant initial investment, the ?global green market? is anticipated to double from $US1.4 trillion per year to $US2.7 trillion in the next eight years.

To assist Australians in meeting the targets, the government is investing $9.4 billion to stimulate innovation, science and research over the coming year.
      
Sources: Statement by Senator Kim Carr, Minister for Innovation, Industry, Science and Research, IndustrySearch

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