Unleashing Australia's Economic Potential: The Imperative for Synergistic Innovation Ecosystems

The billions of transactions, decisions and manoeuvres that occur in our economy every day shape its character. The natural sequence of events has the potential to steer our economy in the right direction, however if Australia’s goal is to remain globally relevant and competitive, a guiding hand is needed. Nowhere is this more evident than in our innovation sector.?

The latest economic theory suggests that industry clusters, where companies across the economy together build a global competitive advantage, are most likely to generate economic success. We are quite a way off this level of synchronicity and need to act quickly if we are to secure a place in the new industries that are evolving globally. Let's take a look at a few examples that highlight how much room we have for improvement.

In the last 12 months, deep tech startup founder Sasha has grown her team by 15 employees, thanks in part to a life-giving Commercialisation Australia grant. Notched up as one of the many success stories of the program, this is also a story of missed opportunity. Part hardware, part software with inbuilt AI, Sasha struggled to find local producers that could help her get her product to market. With no visibility of the ex-automotive engineering fabrication company in Melbourne, or the specialist AI team working on a similar challenge in Adelaide, Sasha looked overseas and spent large portions of her grant funding with providers in China and India. The tech she built was advanced, stretching the capability of the teams in these countries. They now sell this expertise to other clients around the world. It has helped them to grow their businesses and added value to their economies. Sasha’s company thrives. The Australian economy sighs.

After decades in the lab, another deep technology has reached the product development stage. A number of Australian scientists are world leaders in the field and hold paradigm-shifting IP. The race for research outcomes continues, but for others around the world, the focus has shifted to the race for a share of the global market. Alex spun her company out of the university 6 months ago thanks to some government-backed pre-seed funding and a prestigious research grant. Despite their exceptional technical knowledge, Alex and her team feel lost. Primed to develop the most groundbreaking products to take to market, and win the race for the global market too, they are yet to find a local customer they can get down in the trenches and co-create with. When they manage to secure meetings with potential partners, the feedback they get is that the commercial benefits of the tech are unproven, and it’s too expensive and risky to be involved. Their counterparts overseas have signed deals with some of the biggest companies in the world, and their path to product-market-fit seems assured. Alex and her team are losing momentum. Our big companies are falling behind. The Australian economy is losing the race.

Startup founders Aria and Nicole have never met. They also haven’t met Sienna. If they had, they would realise how interrelated their paths and ambitions are. But Aria is a member of a climate-tech community, Nicole is heavily involved in her university startup ecosystem, and Sienna is working on a CRC-based innovation project for a big company. Together, their work and the technologies they are developing could move Australia’s position in the evolving global industry forward. However, there is no industry body or centralising force uniting them towards their common goal. Each endeavour on its own shows promise, and they are able to continue to raise funds through investors and grants. But the destiny of the Australian economy has been faulted, and eventually, their technologies join the supply chains of other nations.

Fixing the fragmentation has become an economic necessity. We need to foster the building of industry ecosystems. We need to support players across the economy to connect and unite, and in doing so discover the winning formula for global competitive advantage in their industry segments. There are many examples of strategies that can help us achieve this, including processes that take an evidence based approach to ongoing support. We just need to get started.