The innovation gap

Today SmartCompany has unveiled its election scorecard, and what’s most notable is that both parties get a “fail” mark. In an election short on any real vision, and any fresh ideas for the SME community, that’s probably not a surprise – we’ve seen no real tax reform (aside from some company tax cuts that don’t come in for at least two years), no new assistance programs and nothing substantial on jobs creation.

But one of the areas where Labor and the Liberals have been most disappointing is innovation. Yes, the Coalition released a 15-point innovation policy yesterday, but there is not much in it – basically promises to trim assistance to the textile and automotive sectors, promises to review and “refocus” some other projects (including Commercialisation Australia) and a promise to “streamline” and potentially reduce SME assistance programs and then charge SMEs to use them on a subsidised fee-for-service basis.

Labor hasn’t promised very much at all either, aside from a commitment to get its R&D credit scheme – first announced in May 2009 – through the Parliament… finally.

It’s had a big crack at the Coalition over its fee-for-service idea, but essentially its promise is more of the same, with no new ideas.

The Coalition was insistent this morning that it was committed to supporting innovation, and would look to expand programs once the budget is back in surplus.

But for now, both parties are essentially saying fast-growth companies looking to innovate will have to get by on their own. At the time support for innovation is most needed, there is simply nothing new.

The “we’ll do more in the future” promise is something we’ve heard before, from both sides. The reality is that governments of both sides tend to get in and then axe successful programs.

When the Howard Government got into power, they cut the National Industry Extension Service (NIES) program that assisted so many companies in the early to mid-1990s to develop their export plans.

When the Rudd Government took power, they sliced the highly successful Commercial Ready program.

One wonders what the Coalition might cut under its “streamlining” agenda this time around.

Innovation gets an awful lot of attention in political circles, and both the Howard and Rudd governments conducted extensive, detailed reviews into how the sector should be reformed and improved to help Australian businesses grow and become players on the world stage.

But the talk never seems to be matched with real commitment. Innovation is something that is good when we can afford it, and cut quickly when we can’t.

The danger here is that Australia will miss out. Right now, our economy is being propelled along by a mining boom that has boosted our income and will underwrite our economy growth.

But other than mining, which sectors are really growing strongly right now? Which companies will form part of the next generation of world-beaters? What are our next brilliant products?

No doubt the entrepreneurs to create these companies and products are out there, but we need to do more – much more – to help them grow, thrive and improve our economy.