Backing Australian’s Ability

Innovation Management Course – MOT 602

Group #1 (Final Presentation)

• Micheal Nabil

• Mostafa Amer,

• Mostafa Mabrouk,

• Mohamed Seif,

• Mahmoud Abdelnabbby

January 2016

https://www.youtube.com/watch?v=jnlvYkF6KTs

Australian Innovation

About the case• The economic annual growth rate in the last decade

reached 3.5% and low levels of unemployment.

• The enabling environment and how to increase the effective research and commercialization of research

• The government initiative in 1990s

• 1997 – Investment for Growth

• 1999 – Knowledge and Innovation (new policy for funding framework for Universities)

About the case• Government injected money for improving health and

medical research

• new capital gains tax (CGT) to encourage risk taking and entrepreneurship.

• Setup of the Innovation Investment Fund (IIF)

• 2000 – Business council of Australia – Assessment of the innovation system

• 2004 – Backing Australia’s Ability (5 years strategy for science, research and innovation

About the case• 2004 – Backing Australia’s Ability (5 years strategy

for science, research and innovation

• Strengthen Australia’s ability to generate ideas

• Accelerate commercial applications of these ideas

• Develop and retain skills

• After spending 2.9 billion $ on the five years program

About the case• After spending 2.9 billion $ on the five years program

• Lacked strategic effectiveness

• Lack of policy focus and collaborative thinking of the government

• ABS-DITR Survey (2006) – focus limited to technological innovation rather than institutional and operational innovation

• CEDA (2007) – shortcomings of the strategy that require urgent attention

1- What Aspects of the Australian economy were the concerns of

the 1990s directed at?

1- What Aspects of the Australian economy were the concerns of the 1990s

directed at?

• Poor track record of commercialization of research

• Strong track record on scientific research

• Brain Drain

2- Which institutions within the national innovation

system were seen as failing?

2- Which institutions within the national innovation system were seen as failing?

• Government

• Science and technology institutes

• Educational institutes

3- Which of the linkage between institutions within the national

innovation system were seen as inadequate?

3- Which of the linkage between institutions within the national innovation

system were seen as inadequate?

• Linkage between Government and firms

• Linkages between Science and technology institutes and firms and industry

• Linkage between Educational institutes and Science and technology institutes and firms.

4- What is meant by commercialization of

research?

4- What is meant by commercialization of research?

• Research commercialization is the process of introducing a new product or service based on a research done by universities.

Commercialization of research

Pull Push

5- How can one have a strong record of scientific research and

relatively poor record of innovation?

Scientific Research Record vs Innovation Record in Australia • Although Australia enjoys levels of expenditure on research and

development and education compared to other OCED countries.

• Australia had a relatively poor track record on commercialization of research, this because of:

• The reluctant of academics, that their research has a profit.

• The lack of well-developed venture capital provision that was available.

• These inadequacies may lead to a “brain drain” as young scientists, researchers and entrepreneurs left their county for less risk averse environments.

6- Draw a diagram that shows the institutions affected by the

Australian government’s strategy “Backing Australia’s Ability”

Backing Australia’s Ability Initiative

Government

FinancialInstitutions

Science&TechnologyInstitutions

• Committee of Economic Development of Australia

• Commercializing Emerging Technology Program

• Australian Labor Government

• Australian Research Council • Australian Universities • Cooperative Research Centers Program • Centers of Excellence in ICT and

Biotechnology

• Innovation Investment Fund • Business Council of Australia

6- What does the digram indicate about the extent to which the strategy affected Australis’s national innovation system?

Impact on Innovation Process

• It lacked strategic effectiveness:

• Lack of policy focus and collaborative thinking in government, public agencies, businesses and academic institutions with major gaps at both strategic and operational levels.

• “Patterns of Innovation in Australian Business” identified the focus being limited to technological innovations, rather than organizational and institutional innovations.

7- What is venture capital? What is the connection between venture capital and innovation?

What is VC?

Venture Capitals are

Specialist financial institutions which takes an equity stake in firms in order to provide funding for

major developments at early production stages

VC & Innovation

“Innovation is an expensive process” O’Sullivan, 2005

Without covering the cashflow gap, we may not exit the valley of death

8- In terms of its national innovation system, why should a country be concerned about a

lack of venture capital?

VC & National Innovation Systems

Even if we have a good flow of new innovative ideas,

we will lack strategic effectiveness

if they were not commercialized fast enough

9- What features of Australia’s national innovation system are likely to be

improved as a result of the measures taken in the late 1990s and early 2000s?

Government Initiatives• “Investment for growth “ statement 1997

• Review of effectiveness of country’s science, engineering & technology supporting base of innovations effectiveness (by Chief Scientist). 1999

• Publishing “ Knowledge and Innovation” white paper. 1999 “university”

• Double of National Health & Medical research council annual budget by 2005 (extra $614 million ).

• National Innovation Summit 2000

• Backing Australia’s Ability 2004 ($2.9 billion over 5 years)

Government à S&T institutions

• Double of National Health & Medical research council annual budget (extra $614 million ).

• $736 million Australian research council

• $246 million university infrastructure upgrade

• $176 million ICT & Biotechnology center of excellence

• Increase university places, online learning, Boost skills by immigration

Government àFinancial institutions

• New capital gains tax (CGT) à entrepreneurial risk-taking

• Innovation Investment Fund (IIF) à overseas VC stimulation

Government àIndustry• $ 337 million infrastructure projects

• Incentives , R&D expansion in companies ($115 million over 5years)

• Assist small companies (START scheme $535 million , direct grant)

• COMET program doubling

• $227 million for Cooperative research centers program

• $100 million for Innovation Access Program (Biotech, Agriculture)

Australia’s National Innovation System Improvements

• Focus on Innovation strategic planning.

• Solid presence in some emerging science and technology fields.(e.g. ICT & Biotech)

• Government financed R&D expenditure is high by international standards.

• Stimulate idea generations by focusing on technological innovations.

• Stimulation of innovation-driven entrepreneurship.

• Strengthening of IP protection framework

• Broadening base of skills for science & Innovation.

• Increasing focus on education systems à Develop innovation skills.

Australia’s National Innovation System Successes Products of the system earning returns for Australia internationally include :

• Google Maps,

• Biota’s flu treatment (Relenza),

• CSIRO’s polymer bank notes,

• wireless networking technology,

• CSL’s anti-cancer vaccine (Gardasil),

• Cross Market Surveillance Service’s stock market fraud detection system,

• Cochlear’s bionic ear.

10- What were some of the weaknesses of the “Backing

Australia’s Ability” strategy which required urgent attention and focus?

Backing Australia’s Ability

http://www.afr.com/videos/business/how-genuinely-innovative-is-australia-l0ajc0bzpgdzatn7wxjt5awieb1dfxec.html

Australia’s National Innovation System Weakness • “Poor business innovation culture, average to poor management

performance”

• Lack of focus on operational side of Innovation

• Large firms with commodity focus (agricultural and mining commodities, basic metals, food, tourism and education-related travel services).

• Understanding of difference between local and foreign customers, suppliers and competitors (Globally oriented business models).

• Seeking local market competitive advantages and Barriers to SMEs Innovations export.

• New to market innovations impact over new to firm innovations. (NTM > 4x NTF > 2-8x Non innovators “export”).

Australia’s National Innovation System Weakness • Lack of access to additional funds (VC), Poor networking and

collaboration with industry , external expertise.

• Obstructive government policies and regulations. (Cochlear case extra 14 m > EU).

• To encourage innovation, tax rating, risk taking, broader business environment, procurement to drive innovation across the economy.

• Investment in human capital and skills. (e.g. Management skills, Education).

• Knowledge infrastructure. (ICT platform).

Conclusion

Questions?

Thank You!