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Innovation is not an abstraction. Nor is it an end itself. It is how we make a better Australia, and contribute to making a better world.

Labor nailed its colours to the mast on innovation in Powering Ideas: An Innovation Agenda for the 21st Century: “Innovation is not an abstraction. Nor is it an end itself. It is how we make a better Australia, and contribute to making a better world – a prosperous, fair and decent world in which everyone has the chance of a fulfilling life.”

Innovation and social democracy are both predicated on a belief in progress – not just in the world of things, but also in the social world. It is this belief – and the collective willingness to act on it – that distinguishes successful societies from societies that fail.

When we talk about progress we are really talking about the pursuit of excellence. This is something every one of us has an interest in – every worker, every consumer, every citizen, every entrepreneur, every researcher. None of us can afford to settle for business as usual. We should always be raising the bar – both for ourselves and for the nation.

Values may endure – whether they be a commitment to fairness and equality, or simple pride in the work we do. But everything else is subject to constant change and, if we get it right, continuous improvement.

Because social democrats understand that people have lives outside the marketplace, we also understand that no reform program – no innovation agenda – can be complete if it serves only economic objectives. Our kind of innovation must always have a social, cultural and political dimension as well.

If we wanted to sum up what a social democratic innovation agenda might look like, we could do worse than revive the Dutch Labour Party’s old commitment to the “spreading of income, knowledge and power”.

Spreading income

We could also do worse than look at what Labor has done in innovation, industry, science and research over the past 21 months, although I would be the first to acknowledge that we still have a long way to go.

The most useful thing we can do to achieve an equitable distribution of incomes is ensure that everyone has a high-wage, high-skill job: high-wage, because that’s the only way we can maintain our standard of living; high-skill, because that’s the only way we can immunise ourselves against competition from low-end producers (the kind of competition that drives wages and living standards down).

Our success in creating jobs like these will depend very much on willingness to face some harsh realities. One of those realities is climate change. Another is globalisation.

Climate change is a serious threat, but it is also an opportunity. Labor has been quick to introduce programs that will drive the development of greenhouse-friendly technologies – technologies we can both use at home to reduce the impact of global warming and export worldwide to generate wealth and jobs for Australia.

Climate Ready, the Green Building Fund and the Green Car Innovation Fund are just three examples. The Carbon Pollution Reduction Scheme will create incentives for innovation across the economy. The Clean Energy Initiative will support the development of clean coal and renewable energy technologies, with a particular focus on solar. It is no accident that it includes $400 million for research infrastructure.

It is no accident that we have launched a Climate Adaptation Flagship within CSIRO or a Clean Energy Innovation Centre within Enterprise Connect. It is no accident that we included $387 million for the closely related fields of marine and climate science in the Super Science Initiative.

We are supporting both the development and application of technologies that are ready to leave the drawing board right now, and the research – often basic, blue-sky research – that will fuel the development of new technologies for years to come. It is all about using our brains to move up the value chain.

This is the answer to the challenge of globalisation. We can never win the race to the bottom, so we need to get serious about winning the race to the top. We will never be the world’s cheapest producer – even if we wanted to be – so we must aim at being the smartest.

If you are wondering why we increased support for research and innovation by $3.1 billion in the last Budget, this is the answer. If you are wondering why we have redesigned support for the automotive and textiles, clothing and footwear industries to reward innovation, this is the answer. If you are wondering why the Super Science Initiative includes $504 million specifically for research that will drive the development of future industries, this is the answer.

If you are wondering why we have established Enterprise Connect, or our system of industry innovation councils, wonder no more. If you are wondering why we are creating a new Commonwealth Commercialisation Institute, or why we are introducing more generous incentives for business R&D, I’m sure you’ve figured it out by now.

We have to make Australian industry more creative and more productive. We are pretty good at invention and discovery, but we have to get a whole lot better – remembering that the rest of the world is not standing still. We must be able to come up with products and services so good and so original that no one else can match them – not just once in a blue moon, but all the time.

This is the only way we can secure those high-skill, high-wage jobs. This is the only way we can go on growing the economic pie so that everyone gets a decent slice.

Spreading knowledge

The second part of the Dutch trinity is achieving a more equitable distribution of knowledge.

Given the size of our population, we can’t let talent go to waste. That means we need to give everyone the chance to develop their skills as far as they want and as far as they can. This isn’t just about making effective use of human capital. It is also about social justice.

One study suggests that three-quarters of the global increase in inequality since the 1980s has been caused by technological progress. This is because advances in technology increase the premium on skills, favour those who already have educational advantages and reduce demand for low-skilled inputs.

We cannot sit back and watch Australia break into two nations: one with the capacity to master the latest techniques and technologies, and one without. That’s why we have established the Productivity Places Program to get more people into vocational training and apprenticeships. That’s why we have set targets that will see more kids finishing high school and doing bachelor degrees – including more kids from disadvantaged backgrounds. And that’s why we have increased support to allow more people to do research degrees and go on to research careers.

This is all about giving individuals better access to the skills and knowledge they need to participate fully in the innovation culture we are creating.

At the same time, we’re also giving industry better access to the knowledge it needs to become more innovative and more productive. That’s where our new investments in research infrastructure come in. That’s where our dramatically increased funding for university research comes in. That’s where new initiatives like the Joint Research Engagement Scheme, the Researchers in Business Program, and the mission-based funding compacts for universities come in. All are designed to strengthen the links between public-sector researchers and private industry.

Australia’s resources are finite, and we have to use them as effectively as we possibly can. One way to do that is by increasing collaboration – within industry, within the research sector and between the two – both within Australia and internationally.

Australia’s new $43 billion National Broadband Network will make collaboration much easier – not just by accelerating communications, but by inspiring entirely new services and applications.

Spreading power

The third and final item on the social democratic innovation agenda is achieving a more equitable distribution of power.

Both the left and the right are prone to focus exclusively on market power – the power that comes from controlling great wealth, or the means of production, or both. We too easily forget that civil society and our democratic institutions have always functioned as countervailing centres of power – even during interludes of extreme capitalism.

We still have a constitution under which schoolteachers can become Cabinet ministers, and we should value that.

The entrenched belief that you can’t make a difference through the political process is highly convenient to those who hold market power, because it discourages people from raising their voices.

In my own portfolio, I have broadened representation by inviting unionists to sit on industry innovation councils, Enterprise Connect advisory boards and other consultative bodies. I have appointed a representative committee to provide independent advice to the Australian Research Council, and consulted exhaustively before introducing new policies and programs. Is this enough? Of course not, but I think this is where we should be heading.

In my undergraduate days, Professor Carole Pateman advocated participatory democracy, arguing that encouraging community and workplace democracy would build decision-making skills, lift general political competence, and make groups more inclusive, cohesive and egalitarian.

Maybe it is time we started thinking this way again – especially given the evidence that workplace democracy increases productivity and cuts downtime by involving workers directly in the innovation process, reducing supervisory overheads, empowering workers “to employ the knowledge that only they have”, and creating decentralised lines of communication that make it easier to fix problems as soon as they arise.

The cause of continuous improvement is best served by cooperation rather than confrontation, and it is most likely to succeed when it involves the whole enterprise, from the boardroom to the factory floor.

No one pretends creating a good country in which people can lead decent lives is easy – and it is not the business of social democrats to downplay the challenges. We must always set our sights on achieving the maximum conditions for fairness and fulfillment, not the minimum.

We know that social inclusion and equal opportunity is important. That’s why Labor has created a portfolio dedicated to ensuring that all Australians feel valued and have the opportunity to participate fully in community life. Yet we also know that further steps are required to ensure that the society we are including people in is just. It is these steps we must focus on.

Managing social risks is important, but it is no substitute for redistributive measures that increase people’s capacity to take charge of their own lives. It is these measures we must focus on.

These are challenges Labor accepts and that we are responding to – confident in the belief that, by working together, we can make the world a better place.

Collective action is not the problem, it is the solution. Social democrats have faith in the intellectual and imaginative powers of their fellow human beings. They have faith in our combined capacity to shape the future.

That, more than anything else, is what links the culture of social democracy to the culture of innovation.
 
This opinion was edited from a recent speech to the John Curtin Institute of Public Policy in Perth, by Senator Kim Carr.

Senator Kim Carr is Australia's Minister for Innovation, Industry, Science and Research.