A new narrative for Australia's future

Cutting back on R&D is a symptom of a larger problem

Every minute spent talking about only traditional issues in this election campaign is a minute less to spend on dealing with what really matters.

This year’s federal election has so far been positioned around an unfortunately predictable set of issues. These are the issues that seem to present themselves every time we go to the polls – immigration, taxation and the political players themselves etc., etc. We seem to be stuck in the same paradigm, wasting precious time on these same old politicised issues in a campaign that seems to me more and more presidential rather than policy driven.

But there is real urgency to do things differently - and not just because the electorate is tired of the same old ways. As the Grattan Orange book International Scorecard showed last week, Australia is falling behind when compared to its peers. This applies to school results, housing costs, homelessness, most aspects of electricity supply and greenhouse emissions. To add to this, I have previously highlighted our low internet speeds and lack of investment in innovation.

Currently we do not seem to have a coherent plan. Let me illustrate this on the example of our catastrophic expenditure drop on R&D, by 12 per cent, or about $2.2 billion, in the two years between 2013-14 and 2015-16. Australia now spends a woeful 1.9% of GDP on R&D. This is well below the OECD average of 2.3%. We were right on the OECD average in 2008 before deciding to cut back. There are ten countries in the OECD that spend well above the average – for example, Israel and Korea spend 4.5%; Germany, Denmark, Austria, Japan and Sweden are all well above 3% and three other countries are above 2.5%.

This multi-billion dollar drop in investment is placing us far behind other countries in positioning to be economically competitive in the next decade and beyond; in attracting top talent; in preparing our people for the jobs of the future and in investing in growth from new industries. It means that at a time where innovation and smart economies are the new drivers of growth, we are going backwards. Now it’s time to catch-up and move into the top ten countries. This will require above average spending – we need to at least double our investment.

The rest of the world is not standing still and many countries are creatively positioning their economies. Israel for example has just figured out how to 3D-print a heart. Estonia is promoting itself as a fully digitized economy. Singapore is reinventing itself every year with a clear plan and a technology-first mindset, to name just a few. Alarm bells anyone?

Doubling our R&D investment is one important way of tackling the future head-on. We have to stop thinking about R&D as a cost instead of an essential investment in our future economy. We need to couple this innovation drive with continued investment in our people through education and re-training. One of the biggest threats is not complete elimination of their roles, but task redundancy, where significant elements of individual’s roles are automated. If we do not up-skill our people to work with machines, and to use artificial intelligence as an enabler in their roles, they are at far greater risk of becoming redundant in the robotic economy.

This is where a short-term election focus collides with medium- to long-term implications. A drive for innovation needs to be the centerpiece of the 2019 federal election, not just a footnote. While the election will be quickly consigned to history, we will be dealing with the fall-out of our shrinking R&D spend for the next century.

That’s why our public conversation needs to change. Let’s focus on what really matters in a globally connected world that is changing quickly due to technology developments. Here are some topics we should be discussing: What is the narrative for the future that guides our investments and decision making? How do we intend to position Australia in a rapidly changing world and economy?  How will we stay competitive when our traditional economic drivers such as natural resources and overseas students are drying up? What are we doing to lead the world – instead of trailing it - in educating our children and adults and in addressing climate change?

We need a clear plan for the future of Australia in the technology age, outlining how we will position this country in a changing world and guiding investment (and de-investment) decisions accordingly.