Australia urgently needs to strengthen its national innovation system. And we should start by developing a 10-year strategic plan involving all key stakeholders, and including investment milestones and performance, to boost innovation.

A key priority is to develop a strategic national intelligence capability that explores critical emerging issues through horizon scanning, technology roadmaps and foresight – and provides findings that can be understood and acted on.

Australian support for innovation is presently too focused on assisting research. New mechanisms are required to use the results of this research – assistance measures that recognise the high costs and risks in the later stages of technological innovation.

Australia must increase collaboration between the private and public sectors, and between research providers and the users of research outcomes. This will require top-down facilitation, including additional funding. It will also require the creation of an environment in which bottom-up collaboration is encouraged.

Business should be able to readily access public sector research skills by using, as necessary, publicly funded intermediaries or other mechanisms.

The Cooperative Research Centre (CRC) Program has achieved many excellent outcomes and helped to improve research management and training of researchers in Australia. The CRC Program should be continued, expanded and diversified.

There is scope for two (or possibly more) categories of CRCs, each with some common characteristics but having different guidelines, depending on their objectives. We should have CRCs with commercially focused outcomes and CRCs that are primarily directed towards non-commercial objectives. More flexibility is required in the CRC Program to accommodate different sizes and funding durations for CRCs and we should establish a new mechanism to fund collaborative research for projects that are smaller (and involve shorter timeframes) than a CRC, but are bigger than Australian Research Council (ARC) Linkage grant funding provides.

Australia needs to revise financial incentives for innovation – restoration of the R&D tax concession to its value when it was introduced and was highly effective would mean increasing it to 200 per cent. There also needs to be a higher turnover limit for the R&D Tax Offset and other improvements to fiscal incentives in order to increase business expenditure on R&D.

The cornerstone of innovation is the classroom. We need to embed the concept of innovative thinking in curricula and pedagogy. We should improve the teaching of science, technology, engineering and mathematics (STEM) in Australian schools, by making teaching more attractive to STEM graduates and providing better teaching resources. We must increase the numbers of STEM graduates from Australian universities by mechanisms such as reducing fees in these disciplines.

Australia should assist firms, especially small and medium-sized enterprises (SME), to develop products that government agencies are interested in buying. We could demonstrate the priority we have assigned to innovation by establishing an annual Prime Minister’s prize for the application of Australian-developed scientific discoveries, to sit alongside the existing Prime Minister’s Science Prizes.

We should improve the commercialisation of public-sector research results by supporting training and adoption of best practice in knowledge commercialisation.

Finally, we should include an element in the new university block-funding formula that rewards investment in proof-of-concept and innovation/commercialisation activities.

This article draws on the ATSE submission to the Review of the National Innovation System, chaired by Dr Terry Cutler. Click here to view the full submission.