Innovation: essential to productivity and economic growth

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Australia has not made any gains in innovative capacity over the past decade. While innovation is the key to lifting productivity, living standards and competitiveness, it is poorly understood in Australia, and too closely coupled with research.

Instead, innovation should be seen more broadly as involving all aspects of the workplace or individual practices to enable creative collaboration leading to implementation outcomes.

AEEMA believes that Australia's competitive advantage is not its prowess in research, but rather its innovative engineering skills which can integrate and adapt technologies sourced locally/globally with field knowledge to quickly meet niche market opportunities - initially locally and then overseas.

While its linkages with productivity, economic growth, cost savings and supply chain effectiveness are well known, the details about how they are linked is not so well understood in Australia. We have rich data about the good outcomes delivered by innovation but we remain weak in the policy settings needed to deliver those outcomes.

Innovation is multi-dimensional, encompassing a vast array of activities in the whole supply chain identification of an opportunity, designing and implementing a solution and marketing its uptake. Innovation is not invention - the most effective innovation involves a process of the application system integration of existing knowledge in new and inventive ways.

Australia undertakes sufficient pure and strategic research – what is needed now is the design and management skills to get that knowledge into the international markets.

As the federal election draws near, AEEMA would like to see a newly elected government:

  • commit to a broader appreciation of the whole innovation process in policy development;

  • establish a national innovation framework supported by a central body, ‘Innovation Australia’;

  • educate the community that innovation is a cumulative, step-by-step process, not research or a ‘big bang’ invention;

  • facilitate better linkages between business, university and research sectors; and

  • support the 10 year strategic vision of the National ICT Industry Alliance for the Australian information and communications technology (ICT) sector – ‘Energising Innovation’.


In recent years, policy settings have treated innovation too closely as just research; the latter phases of innovation (design, manufacture and marketing) are arguably more vital to national economic and productivity outcomes. There is now a strident call from industry and business for the need to elevate the whole innovation process to the national priority agenda, with a national framework to coordinate the efforts of government, business and research institutions.
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