Mining the innovation boom

For over 20 years the Australian economy rode high on the back of a once in a century mining boom. Despite declining revenues and exports, the Government continues to approve massive open cut mines, attaching to coal an importance the rest of the world seems to be quickly changing its mind about.

To state Australia’s economy is transitioning is an understatement. Combining the mining fade-out with the decline in the manufacturing industry, a traditional mainstay of the Australian economy, and decade high unemployment, puts the economy under immense pressure.

But what does a country do when the mining boom begins to fade, and the realities of an economy focused on the belief the good times would never end becomes a story fading into myth and legend?

In an article on innovation in the Australian Financial Review, Wednesday October 28 2015 John Stewart, former investment banker and now Chief Executive Officer of start-up Health& addressed the issues of Australia’s high risk economy, and the importance of developing and investing in risky start-up ventures.

When he announced his new cabinet in September 2015, Prime Minister Malcolm Turnbull returned the Government focus to one that was focused on the future, talking about meeting the inherent challenges of a disruptive environment with agility and innovation.

Christopher Pyne was announced as the new Minister for Industry, Innovation and Science, and in his acceptance of the role said.

“With a sweeping tide of new disruptive technologies that will entirely transform the way we live and the way we work, Australian industry must continue to lead the world in research and innovation, ensuring our nation can seize the opportunities ahead.”

As Government’s across the country deal with constant change in the economic landscape, the need to look to the future and develop Australia’s own tech industry is paramount.

In a statement on October 22, 2015 New South Wales Premier Mike Baird highlighted the importance of tech start-ups to the future of the New South Wales economy when announcing the Bays Precinct Transformation Plan, allocating the White Bay Power Station as the future hub of knowledge-intensive industries.

But being a tech entrepreneur in Australia is a risky proposition. With word from Canberra the Government’s innovation strategy to be released in December will address key obstacles to turning the Australian economy into an innovation powerhouse, the current situation is less than ideal.

“We need to encourage entrepreneurs and investors to invest in risky start-ups if we are to de-risk the economy,” John Stewart said in his opinion piece “How to make tech sector more like Silicon Valley,” in the Australian Financial Review, Wednesday 28 October, 2015.

But how do Governments go about de-risking an economy that is transitioning away from the key sectors that made Australia one of the few economies to ride out the GFC and emerge relatively unscathed?

Tax breaks, increases in R&D funding and Federal budget investment in start-up tech companies would go a long way towards overcoming the risks associated with creating a start-up in today’s economy.

Innovation and agility may be the buzzwords of today, but the impacts of rapid change are felt everywhere.

While “digital disruption,” has been talked about in boardrooms and newspapers for some time, the reality is Australia can no longer depend on the traditional and must embrace a more disruptive reality if we are going to continue to grow the Australian economy.

Uber, the ride sharing app currently at war with the Australian Taxi Drivers Association is just one example of how technology has the ability to disrupt existing business models, providing consumers with cheaper alternatives to traditional business models.

Airbnb is another, now the largest hotel brand in the world while not actually owning any physical properties themselves.  

The Australian economy will continue to transition away from traditional industries and it is up to the Governments of Australia to ensure that we are ready, and able, to make the most of new and emerging industries.

A recent report by Deloitte Access Economics says a 10 per cent increase in research spending would eventually yield an increase of over $100 billion in GDP. To put this into perspective according to the ABS 2011 -2012 the auto manufacturing industry in Australia contributed only $5.4 billion to the nations GDP.

Mike Cullen has recently returned to Akolade after a period as the conference producer for one of Australia's leading economic think tanks. Mike began working in the conference industry in 2007 after looking for a career change from the high pressured world of inbound customer service. Mike has worked for some of the most well known conference and media companies in the B2B space and in his spare time is working on his first novel in a planned Epic Fantasy trilogy.