At the CRC, we define innovation as the creation, development, protection, and commercialisation of new products and/or processes that pre-empt the market by the application of creativity and technical skills. Deloittes recently released their global manufacturing competitiveness index and they surveyed 400 chief executive officers and senior manufacturing executives around the world. They rated talent driven innovation as 9.22 out of 10 as the key factor in competiveness, more than the traditional factors such as cost of labour, materials and energy. Innovation is the most important factor in terms of competiveness.
Given that we have generally rated poorly in OECD measures in investment in research and development, it shows if we are going to improve our economic performance as a nation, this is an area we have to focus on. The structure of our industry is mainly made up of SMEs and Australian SMEs are generally risk averse. But the fastest growth in international trade has been in manufactured products over the last 20 years so that is where the opportunity is. We’re going to be introducing an innovation management training program to train SMEs in how to systematically approach R&D expenditure to minimise the risk. We will start to roll it out early in the new year.
Companies will have the opportunity to make application to us for support in their research and development. The Government, prior to the election, had proposed to change the R&D tax legislation but it didn’t get through the Houses before they adjourned for the election. The beneficiaries of R&D tax relief in the past have mainly been large companies, 100 of them getting the overwhelming bulk of the money organised through half a dozen accountancy firms.
This government was committed to distributing more to SMEs. We have to wait and see what the outcome of the election is and what the government does but the thrust of that was headed the right way. The largest aggregate employer is the SME sector. We have to encourage it into greater risk taking and R&D expenditure. There is plenty of support out there to help.
