Innovation, Creativity and Leadership

172 Pages·2008·1.92 MB·English

Innovation, Creativity and Leadership
Report of a Study of the ACT Innovation System
March 08
ISBN-978-0-642-60439-2
ISBN-10: 0-642-60439-8
© Australian Capital Territory, Canberra 2008
This work is copyright. Apart from any use as permitted under the Copyright Act
1968, no part may be reproduced by any process without written permission from
the Territory Records Office, Community and Infrastructure Services, Territory and
Municipal Services, ACT Government.
GPO Box 158, Canberra City ACT 2601.
Produced by Publishing Services for:
InnovationBusiness & Industry Development Branch, Business & Projects Division,
Chief Minister’s Department,
Enquiries about this publication should be directed to:
GPO Box 158 Canberra City, ACT 2601
Phone [phone]
Howard Partners
www.business.act.gov.au/
ABN 89 090 817 360
Level G, 15 Beauchamp Street
Publication No 08/0324
Deakin ACT 2600
http://www.act.gov.au
Telephone: Canberra Connect 132 281 www.howardpartners.com.au
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Contents
Executive Summary 1
Recommendations 6
1 Introduction 9
1.1 Background 9
1.2 Innovation and innovation systems 10
1.3 The competitive environment 21
1.4 Approach to the study 22
2 The innovation policy context: vision, plans, and frameworks 23
2.1 Innovation policy objectives 23
2.2 The Canberra plan and strategy 24
2.3 The economic framework 26
2.4 Australian Government purchasing and procurement 32
2.5 Issues and implications 37
3 Innovation system capability 39
3.1 Research and development capability 39
3.2 Creative capability 52
3.3 Business and entrepreneurial capability 62
3.4 Conclusions 64
4 Innovation system institutional framework 65
4.1 Institutions for teaching and research 66
4.2 Cultural institutions 67
4.3 Lead businesses 68
4.4 Networks 73
4.5 Conferences, awards and prizes 78
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4.6 Technology parks and seed funds 80
4.7 Investors 81
4.8 Support services 83
4.9 Policy and strategic framework 84
5 Innovation system dynamics 85
5.1 Framework 85
5.2 System attributes 87
5.3 Interactions and connections 90
5.4 Issues and implications 92
6 Canberra’s distinctive capabilities 93
6.1 A City with an international outlook and connections 93
6.2 An international centre for research and teaching 94
6.3 Centre for culture, arts, and creative practices 94
6.4 A Centre for defence procurement 95
6.5 An attractive place to live and work 95
6.6 Implications 96
7 Best practice 97
7.1 Berlin 97
7.2 Ottawa 98
7.3 Washington, DC 98
7.4 London 101
7.5 Wellington 102
7.6 Observations and implications 103
8 Some emerging trends 105
8.1 The ‘democratisation’ of information technology 105
8.2 The convergence of information technology and creative practices 106
8.3 Higher education engagement 107
8.4 Biotechnology 108
8.5 Demand for security solutions 109
8.6 Government procurement practices 110
8.7 Centralisation of government administration in Canberra 112
9 Key issues to address 113
9.1 Creating critical mass 113
9.2 Leadership 114
9.3 Building a culture of collaboration 114
9.4 Building business capability in the creative industries sector 115
9.5 Support for new business development 116
9.6 Resources 117
9.7 Out-migration of skilled people 117
9.8 Policy issues 117
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10 New visions for Canberra 119
10.1 A centre for a technology, arts and creative practices industry 119
10.2 A ‘connected city’ 120
10.3 An international city of design 122
10.4 An international centre for conservation management and practice 123
10.5 Australia’s ‘education’ capital 123
10.6 Sustainable City 124
10.7 Issues and implications 126
11 Actions and initiatives 127
11.1 Establish leadership and direction 127
11.2 Build a framework for new business support 130
11.3 Advocate for innovation in government procurement 133
11.4 Position Canberra as an international city 134
Attachment A: Strategies and actions to establish Canberra as an
international city of design and architecture 135
Achieve UNESCO ‘City of Design’ status 135
Branding through the Canberra Biennial 137
Establish a Graduate School of Design 138
Plan for a National Design Museum 138
Encourage Establishment of a Peak Body for Design 139
Overall framework 139
Attachment B: Australian Government Contracts Gazetted for
Procurement of Goods and Services in the ACT and Region 2006-07 141
Classified by ANZSCC Code 141
Classified by Agency/Department 144
Attachment C: Profile of Research and Development Expenditure in the ACT. 147
Overview 147
Higher education 148
Government 153
Attachment D: A note on financing start-up businesses 155
Attachment E: The MIT Media Lab 159
References 163
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Table 1: ACT Industry Percentage Contribution to Total Factor Income 27
Table 2 ACT Employment by Industry Sector (‘000) 31
Table 3: Australian Government—purchases of goods and services in the ACT
and region exceeding $10m 33
Table 4: Australian Government purchases of goods and services in the
ACT region—ANZSCC code 34
Table 5: Innovation system capability investment framework 40
Table 6: Higher education expenditure on R&D by type of activity 2004 ($’000) 41
Table 7: Higher education expenditure on R&D by type of activity 2004 (proportion) 41
Table 8: Summary of higher education expenditure on R&D by research fields 2004 ($’000) 42
Table 9: Summary of higher education expenditure on R&D by socio-economic
objective 2004 ($’000) 43
Table 10: Higher education research commercialisation indicators 44
Table 11: Government expenditure on research and development 45
Table 12: CSIRO research commercialisation indicators 46
Table 13: Major Australian research infrastructure located in the ACT 46
Table 14: Business expenditure on R&D, by industry - by location: 2005-06 47
Table 15: All ACT Students by Higher Education Provider and Broad Field of Education,
Full Year 2005 48
Table 16: Students by Higher Education Provider and Broad Level of Course, Full Year 2005 49
Table 17: Australian Government Business Support Programs 51
Table 18: Employment in Creative Industry Segments, 2001 census 54
Table 19: Number of creative businesses in the ACT by segment—2006 55
Table 20: Innovation system institutional framework 65
Table 21: Expenditure on R&D, by industry - by location: 2004-05 147
Table 22: Higher education expenditure on R&D by source of funds 2004 ($’000) 148
Table 23: Higher education expenditure on R&D by source of funds 2004 (proportions) 148
Table 24: Higher education expenditure on R&D by type of activity 2004 ($’000) 149
Table 25: Higher education expenditure on R&D by type of activity 2004 (proportion) 149
Table 26: Higher education expenditure on R&D by research fields 2004 ($’000) 150
Table 27: Higher education expenditure on R&D by research fields 2004 (proportion) 151
Table 28: Higher education expenditure on R&D by socio-economic objective 2004 ($’000) 152
Table 29: Higher education expenditure on R&D by socio-economic objective
2004 (proportion) 153
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Executive Summary
This is a study of the ACT innovation system. It is entitled Innovation, Creativity and Leadership as it is
now very clear that innovation, the successful exploitation of new ideas, does not and cannot occur
without two vitally important ingredients: creativity and leadership.
Whilst innovation is the successful exploitation of new ideas, creativity involves the development of
original and novel ideas that have a commercial application. Leadership is the capability that ensures
the translation of ideas into practical application through management and organisational frameworks.
Innovation is reflected in the introduction of new products, new services and new ways of
interacting with suppliers, distributors, customers, and clients. It is a building block for sustaining
competitiveness and productivity as well as quality of life.
Innovation contributes to economic outcomes through increased production of goods of services,
increased employment, increased investment, and increased exports. It contributes directly to
productivity and business performance through process efficiency, process design, branding and
marketing (Great Britain. Department of Trade and Industry, 2005).
Governments have a major interest in ensuring that businesses that fall within their jurisdictions
are innovative—as business success is reflected in overall economic success as indicated by new
business formation, business growth, and longer term business sustainability.
Businesses build innovation capability through interactions and relationships with other businesses
along the value chain, with research and teaching organisations, and in the context of the ‘creative’
economy, with arts and cultural institutions.
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Cities and regions provide the frameworks for innovation by being ‘hubs of capability’ and facilitating
‘linkages’ between businesses, research and teaching organisations and government organisations. The
concept of ’hubs’ and ‘linkages’ provides the basis for the analysis of ‘innovation systems’.
Although the focus of this study is on the economic and business aspects of innovation, the adoption
and application of new ideas through creativity and leadership processes is also relevant in the social,
environmental, and cultural spheres. This study endeavours to draw a link between economic and cultural
dimensions by drawing attention to the economic contribution of the creative industries. The link between
economic and environmental outcomes is also addressed through innovation to ensure sustainable futures.
Studies of innovation systems have tended to focus on the ‘science system’ as a foundation for research
and development and the creation of new technologically oriented products and services. Studies map
and document capability in research institutions, expenditure on research and development, and count
patents and start-up companies. There tends to be a focus on discoveries and inventions in the natural
and life sciences, engineering, and the enabling technologies of information and communications
technologies (ICT), biotechnology, and nanotechnology.
Science and the commercialisation of research and development is
a vitally important aspect of the innovation system—but there is
another facet of the innovation story.
This study complements the science system approach by documenting capability in what will be
referred to as the ‘arts and creative practices system’ and drawing attention to the importance of creativity
as a major source of innovation. Creativity is linked to innovation through design as well as research,
teaching, and experimentation in art and creative practices. Cultural institutions, such as libraries,
galleries and museums also have a role in the ‘arts and creative practices system’.
The science and the arts and creative practices systems are, of course, linked—through the enabling
characteristics of information and communications technologies, covering software, micro processing,
digital and wireless communication, and web based tools and techniques. Very little innovation in the
science system occurs without an ICT component and innovation in the arts and creative practices
system is also enabled by ICT.
Science, art, and information technologies come together in what are referred to as the ‘creative
industries’—a sector in which Canberra has a particular strength. They include: advertising and
marketing; architecture, design and the visual arts; film, television and radio; music and the performing
arts; software development and interactive content; writing, publishing and print media.
In 2004-05 a total of $698m was spent on research and development in Canberra—amounting to 10.2
percent of total research and development expenditure in Australia. Almost 90 percent of expenditure
in Canberra was performed in the public sector. Business expenditure on research and development
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Innovation, Creativity and Leadership
R e p o r t o f a S t u d y o f t h e A C T I n n o v a t i o n S y s t e m M a r c h 0 8
amounted to $99m (1.0 percent of the Australian total). Sixty two percent of this was incurred in
the electronic equipment and computer services (ICT) sectors. This compares with 11 per cent for
Australia as a whole.
Several research intensive and software development based businesses have grown in Canberra
and become sustainable, often on a global basis, on a foundation of relationships developed
with Australian Government departments and agencies and the Defence Materiel Organisation.
However, the study indicates that contracting with the Australian Government presents particular
challenges, particularly in the absence of a demonstrated ‘track record’. Unlike the United Kingdom
and European countries, the Australian Government does not use its procurement system to source
or stimulate innovation. This constitutes lost opportunity.
Within the higher education sector 45.7 percent of research expenditure undertaken is for pure basic
research (compared with an Australian average of 28.7 percent) and 27.9 percent was for strategic
basic research (22.9 percent). However, income from the commercialisation of research amounted
to just $589,000 in 2004—representing 0.18 percent of research expenditure. Whilst research
commercialisation is important, and offers much potential, the strengths of the ACT science system
are not in this area.
The strengths of the ACT science system relate to its position as an international centre and global
hub for research and teaching excellence across a number of disciplines, including natural and life
sciences, information and communications sciences, economics, the policy sciences and humanities,
and curatorial studies. Research excellence attracts top students who in turn provide the human
resource base for businesses starting up or relocating in Canberra, for government advice, and for
national institutions wishing to tap into world class expertise and capabilities.
Although the science system does not impact through the commercialisation of research, it has a
major impact through employment and in direct expenditure on goods and services—universities
in the ACT have budgets totalling $700m—and in the flow of educated graduates (‘knowledge
workers’) who establish, or are available to work in, a growing ‘knowledge intensive business services’
industry and a burgeoning ‘creative industries’ sector.
The arts and creative practices system reflects the location and activities of the national collecting
institutions based in Canberra—including the National Library, the National Gallery of Australia, the
National Museum of Australia, the National Film and Sound Archive, the Australian War Memorial and
the National Archives—and teaching and research undertaken in the schools of art, music, design and
architecture located at the ANU, the University of Canberra and the Canberra Institute of Technology.
A private college, the Academy of Interactive Entertainment (AIE), is a leading educator for the
computer game development and 3D digital industries. ScreenACT, the ACT Office of Film, Television
and Digital Media, is responsible for implementing industry development initiatives. Canberra has
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executive summary
a developing film and television production industry, with a particular strength in non-fiction and
documentary film, and which displays potential to grow. The computer games industry has national
and international recognition and is generating significant export earnings.
The emergence and growth of the creative industries reflects the increasing demand for creative
products and services by end consumers as well as the use and application of creative output across a
wide range of industries—including government and cultural organisations. It also reflects a capacity
to capture the opportunities provided by information and communications technologies in relation to
digital content and presentation.
In June 2006 there were 3,000 creative businesses in the ACT, representing 10.7 percent of all
businesses in the Territory—this data does not include businesses located in Queanbeyan. Creative
businesses have a higher propensity to be micro-businesses—with 40 percent of GST registered
creative businesses being sole traders compared to 36 percent across all industries. This is reflective of a
pattern in other capital cities—particularly London and Berlin.
There is scope for substantial further development of the creative industries through linkages and
partnerships between universities and colleges, creative content providers, the substantial computing
capacity available in the ACT (through the ANU and NICTA) and optical fibre communications capability.
Business development services currently available or planned for technology based businesses should
also be available for businesses based on art and creative practices.
The study draws attention to the importance of business and social networks in the innovation system.
It also draws attention to the role of conferences, festivals, awards, and prizes in directing attention
to innovative capability. Networks are important in all industry sectors and professions and people
use them in different ways. Some of the most effective networks are privately created—for example,
through schools and sports clubs, or interest groups. Formal business networks work when they have a
clear purpose and are focused on delivering outcomes for members.
The important role of technology investors, business support services, business development centres
and technology parks is also described and assessed. There is substantial capability in all of these areas
in the innovation system, but there is scope for improvement to lift innovation performance.
The study includes an analysis of ‘innovation systems dynamics’ which sets out the relationships and
interactions between the main business players in the system. These include the large government
agencies, the vertically integrated or ‘concentrated’ businesses (for example, computer hardware and
software), and the smaller, more agile, start-up and new ‘ideas based’ businesses.
The study includes an analysis of Canberra’s ‘distinctive capabilities’. These are seen to lie in the areas
of: the City’s international outlook and connections through government, diplomacy, and national
institutions; an international centre for research and education; a centre for the arts, culture and creative
practices; a centre for government and defence procurement; and, combining the previous capabilities,
an attractive place to live and work.
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