A new report from the Productivity Commission has revealed that Australian businesses are falling behind their global counterparts when it comes to innovation.
The 5 Year Productivity Inquiry: Innovation for the 98% report showed Australian businesses and government becoming stagnant with inventing new products and ideas, with just one or two per cent of local businesses inventing anything new.
It was also found that Australian firms were falling behind global leaders.
“There are worrying signs that the principal vehicles for acquiring and transferring knowledge – what we refer to as diffusion – have slowed or stalled,” Productivity Commission Deputy Chair Dr Alex Robson said today while launching the third interim report.
“While previously we could have relied on labour mobility and investment in machinery, equipment and intangible capital to spread ideas, these have all been either stagnating or declining.”
The bulk of innovations an Australian business introduces to the public is usually new to the business itself, with a smaller percentage new to the industry or new to the world entirely.
The third interim report in the five-year productivity inquiry found several well-known but rarely exploited solutions to boost productivity, such as collaboration and skilled migration.
“Policy has traditionally been focused on cutting edge invention, but there are likely to be bigger gains in encouraging everyday, incremental innovation across the vast majority of Australian businesses,” Dr Robson said.
Meanwhile, Treasurer Jim Chalmers said the previous government delivered the worst decade for productivity growth in half a century.
“The report shows that while the ball got dropped in the past, there are significant opportunities to boost productivity, including through greater collaboration,” Dr Chalmers said.
With only between one and two per cent of Australian businesses producing new-to-the-world innovation, the report recommends consideration on how to help the other 98 per cent adopt and adapt existing technologies and practices to improve performance and productivity.
“Innovation in government services is often slow, piecemeal, disorganised, and inconsistent across jurisdictions. Yet it is critical for the quality and value for money of services,” Dr Robson said.
“Many of the ways we could achieve diffusion of new processes and approaches in government services are well‑known but underexploited. Even small gains from diffusion and adoption in the public sector will improve outcomes or realise billions of dollars in better services or cost savings.”
With AAP