Australia is experiencing a public health crisis and a challenge of economic recovery. The crisis and the challenge sit in front of a more fundamental threat to Australia’s future that lies in the need to respond to the forces of climate change and move from an economy where wealth has been created by exploitation of mineral fuels and consumer demand driven by high levels of immigration, to one driven by knowledge and technology. We must move from a second world to a first-world nation.

Australia must look for new sources of growth in this post-carbon future. These sources of growth will be built on the development and application of new technologies to revitalize industries that suffered as a result of the importation of cheaper manufactured goods, and the creation of “new industries” formed around the application of new technologies, such as big data and analytics, automation and robotics, simulation, visualization and augmented reality, and cloud-based platforms.

New sources of growth will be the outcome of a national commitment to research, development, and innovation within a National Recovery Plan framework that will form the basis of a National Industrial Strategy.

Nations have done well when they start planning for the future in the midst of a crisis. Without reverting to protectionism, Australia must become more self-sufficient in producing goods and services that have relied on complex supply chains, which can be dislocated in the event of a crisis. Risks must be managed. Many would argue that we have lost the capacity to make things – although we are good at consuming them.

To create the future, we must address and close the policy gaps. Numerous funding programs and cross-cutting Ministerial and Commonwealth-State responsibilities means that we do not currently have any semblance of an industrial strategy or coherent innovation policy. There is some support for sector-based strategies and innovation district initiatives – but the commitment is weak across Government, and expenditure is reported “after the event” instead of being driven by clear missions, objectives, and outcomes.

To recover from the present health and economic crises we must develop an industrial strategy and innovation policy that can move Australia to a post-carbon future, we must draw on Australian responses to previous crises, such as the Post War Reconstruction commitment, and avoid the policy failures surrounding responses to previous crises such as the 1974 oil shock, and the restructuring of the economy required after the removal of industry protection regimes and introduction of microeconomic reforms in the early 1990s. 

In particular, we must:

1. Commit to a national industrial strategy with a new body charged with responsibility for developing and implementing a national industrial strategy and innovation policy, with a remit to identify, plan, and commit to specific national missions. It could be referred to as the National Industrial Strategy and Innovation Commission. The present Productivity Commission would advise the new Commission on specific micro-economic issues.
2. Develop and adopt a consistent and coherent policy framework across all agencies with an industrial policy remit to end the fragmentation of programs across Ministerial portfolios, departments, and agencies. Policy must obtain high-level cooperation and coordination with the States/Territories, respecting State/Territory roles and responsibilities, and their front line capacity for implementation and delivery.
3. Make a sizeable RDI investment commitment in industrial sectors critical to Australia’s technology and innovation future: Energy (renewable particularly); Land, Water, and Climate Change; Transport, Communication and Infrastructure; and Industrial Production and Technology. Four new Research Investment Councils would drive investment in each sector. They would complement the investment mandates of the NH&MRC and the Rural RDCs. The ARC would continue to invest in the Humanities, Arts, and Social Sciences.
4. Address workforce development, education, and training imperatives to ensure that people can acquire both the high level occupational and academic skills required for industrial growth in the industries of the future. The small and mostly disconnected STEM training initiatives across the Commonwealth and States/Territories must be consolidated. The current high level of participation in Health education and training should be replicated in the Engineering and Technology fields.
5. Secure a much higher level of university-industry collaboration with a better match of research and innovation priorities supported by the Research Investment Councils and financial support for university-industry Engineering and Technology Research Institutes, drawing on the Fraunhofer framework.
6. Support innovation place-making through investment in nationally significant precincts, districts, and clusters that will facilitate the formation of high growth new technology businesses (start-ups) and scale-up through smart specialisation strategies in global markets and value chains.