Why innovation matters

GLENDA KORPORAAL
July 30, 2016
The Australian
The Creative Country conference this week provided a sharp reminder of the necessity of explaining the importance of innovation in the Australian context.
As the conference hosted by The Australian in partnership with National Australia Bank highlighted, there is no shortage of ­talented, creative people in ­Australia with a passion for ­innovation.
Speakers included the (relatively) new ABC chief Michelle Guthrie, NAB chief executive Andrew Thorburn, Ford Australia chief Graeme Whickman, Sydney Opera House CEO Louise Herron, Microsoft Australia managing director Pip Marlow, NBN chairman Ziggy Switkowski and ANU vice-chancellor and Nobel prize winner Brian Schmidt.
What was surprising — and maybe a wake-up call for those of us keen to see a more creative Australia — was the debate over the potential political backlash over the idea of innovation.
The Australian’s Victorian business editor Damon Kitney tackled the issue with Business Council president Catherine Livingstone, raising the question of how the concept of “innovation” played out in the recent election.
Livingstone, who was chief executive of bionic ear company Cochlear, before moving on to a career as a professional director, including chairing Telstra and president of the BCA, gave a frank answer. “Innovation was perceived — and is perceived — as quite threatening,” she said.
“Because innovation tends to be associated with, ‘that means I am going to lose my job’, or innovation is some mysterious process and ‘I don’t know about that and I don’t understand, it is actually threatening to me personally’.”
The accelerating rate of innovation had worried people who saw it as a threat to their jobs.
“What we in business need to do is a better job of explaining that this is all about transitions, and what can business do to help the transition and what can government do. It’s not a stop-start, it’s not a black hole. It’s a question of transitioning through.”
Having just come back from a trip to China, organised by Bob Carr’s Australia-China Research Institute (with the assistance of the All-China Journalists Association), and seen first-hand a country that has been in a perpetual state of innovation and self improvement, it is almost shocking that the idea of innovation should be seen as a negative by some parts of the electorate.
I spent several days in Shen­zhen, just over the border from Hong Kong, which was a fishing village when Deng Xiaoping made his southern tour in 1992 and began the serious opening up of China. A decade ago Shenzhen was one of the world’s great factories churning out cheap toys and clothing and goods for the rest of the world.
Today it is reinventing itself yet again with global companies such as telecoms giant Huawei, electric bus and car company BYD (which started out making cell phone batteries for Motorola), e-commerce company Tencent and genomics research company BGI, which was spun out of China’s participation in the human genome project. Huawai is now pushing to expand into business applications of the new “internet of things”, the next big industrial revolution. One of its focuses is on the development of 5G and its applications to the new world.
Shenzhen is also cleaning up its act in terms of the environment, with a desire to emulate Singapore as a sustainable city, leading to tree-lined streets and blue skies — not common in many parts of China.
Before that I was in the western city of Chengdu looking at plans for a massive science and technology park on the outskirts of the city. (The city is also the site of an ANZ processing operation, which helped develop the technology for the bank to take Apple Pay.)
China’s massive economic growth has resulted from a hunger for innovation and self-improvement, a passion to become globally competitive — a motivation shared as much by ordinary person as by its political leaders.
There has been a fierce hunger for China to catch up with the rest of the world, for its people to have a better standard of living, which is now seeing the country produce global companies such as Lenovo, Huawai, Alibaba and BYD, which are moving ahead of their Western competitors.
Across the Pacific, Chris Kohler’s video interview with Australian entrepreneur Mick Johnson, who is based in California, shows there is a powerful hunger for innovation in Silicon Valley.
As Johnson points out, there is a heady drive among the players in Silicon Valley which is attracting some of the best and the brightest young minds in the world, including the 20,000 Australians working there.
In the US, the relentless drive for innovation has seen the rise of global companies such as Microsoft, Google, Apple, Tesla, Facebook, Airbnb, Uber and Twitter.
It is alarming that the concept of “innovation” has been seen by some in Australia as a political concept led by Malcolm Turnbull or that it is a threat to the livelihoods of ordinary Australians.
The debate around some of the negative domestic political associations with “innovation” is a reminder of the broader need to make the case for innovation.
One serious argument is that the rest of the world is innovating — from China to the US, from Asia to Israel to Europe. If Australia doesn’t continue to innovate we will be left behind in a global world and lead to a falling standard of living here.
Not to move forward is to stagnate and lose out in what is now a global market for goods, services and talent.
Innovation is also a source of potential new wealth — just look at the rise of global giants in the US and China or new smaller companies in niche markets. Innovation generates new wealth.
Innovation is also about unlocking human potential. How much more exciting it is for some of the best and the brightest young people to think about founding their own companies, which in turn generate new jobs, than having to be forced to work in the Western equivalent of an iron rice bowl at big corporations for the term of their natural lives.
It is also about having a better life — including broader access to technology, information and services and a better environment.
But the Brexit decision in Britain, the rise of Donald Trump in the US and some of the debates in the Australian election are a reminder that not everyone benefits or thinks they benefit from constant change.
It doesn’t help, as American-born Brian Schmidt points out, that Australian governments constantly chop and change on policies. Changing policies and messages from the top are unsettling to both business and ordinary people.
The Creative Country conference was about encouraging and broadening the debate on innovation. Keeping the national debate going is equally important.