Tuesday, March 25, 2008

Report on the ACT Innovation System

The ACT Chief Minister, Jon Stanhope, launched a report on innovation in the ACT, on 19 March 2008. The study was done by Howard Partners, and the full 174 page report is available online ( 1.8 Mbytes of PDF). This should be useful for the Canberra 2020 Forum to be held on April 5 on the theme 'innovation'.

The report has a readable 5 page executive summary and set of recommendations. At about 24 Kbytes per page, the report is reasonably efficiently encoded. However, it would help if the summary and recommendations were provided separately, preferably in the form of a web page which would be easier to find and read. Appended are excerpts from the recommendations, summary and table of contents of the report.

One deficiency of the report is that it does not address new approaches to intellectual property, such as Open Source and Open Access. These provide the potential to unlock creativity, innovation and economic development currently lying unused in tertiary institutions and government agencies in Canberra.

Recommendations From the Report

1. An entity, tentatively termed Innovation Canberra, be formed to provide leadership and direction in the development and implementation of knowledge based innovation strategies for the ACT and surrounding region—with a particular focus on the ICT and the creative practices sectors.
2. Innovation Canberra consist of members drawn from business, creative, education, and government sectors.
3. Members of Innovation Canberra be required to contribute to overhead and operating costs, with the ACT Government providing seed funding for start-up costs.
4. Innovation Canberra be tasked to develop a strategic agenda of major projects and initiatives and advocate, promote, and seek funding support from industry, higher education and government—locally, nationally and internationally.

Creating and leveraging sector linkages

5. In view of the potential for the creative sector to make a stronger contribution to economic development, the ACT government give consideration to making further investments to build capability. In particular, initiatives to accelerate the bridging of the technology and creative sectors should be examined.

Stimulating and supporting innovation at the enterprise level

6 The ACT Government establish an ‘Ideas Fund’ to nurture innovative ideas and concepts to a stage of development where they become potentially marketable products and services and are of interest to customers and/or technology investors.
7. The Epicorp incubation and enterprise development model be extended, in partnership with universities, research organisations, and national collecting institutions, into a Canberra Innovation Development Centre directed towards product development and scale up for technology and
arts and creative businesses.
8. A program to support innovation strategy development in more developed and mature start-up firms be examined—for example, program support to cover the cost of advice and mentoring to assist firms develop innovation management strategies and the organisational infrastructure
pertinent to their business models.

Innovation, Creativity and Leadership

9. The ACT Government be a participant in a collaboration between Government and ACT universities in an ARC Linkage project application for innovation in government procurement. As one of the smaller jurisdictions a pilot study should be undertaken for the ACT public sector.

Branding and positioning of Canberra

10. There is need to develop a more progressive view and brand of Canberra, particularly in the domestic market. The ACT Government, together with industry through the Canberra Business Council, higher and further education institutions, the national collecting institutions, research
organisations, and the Australian Government develop a strategy to position Canberra as an international city of design.


11. The ACT Government support an annual Canberra Exhibition that showcases, celebrates and markets ACT innovation capability across the science, technology, and the cultural and creative sectors ...

From: Innovation, Creativity and Leadership, Report of a Study of the ACT Innovation System, Howard Partners for the Australian Capital Territory Government, March 2008, ISBN-978-0-642-60439-2,
ISBN-10: 0-642-60439-8
From the Executive Summary:
... Cities and regions provide the frameworks for innovation by being ‘hubs of capability’ and facilitating ‘linkages’ between businesses, research and teaching organisations and government organisations. The concept of ’hubs’ and ‘linkages’ provides the basis for the analysis of ‘innovation systems’. ...

This study complements the science system approach by documenting capability in what will be referred to as the ‘arts and creative practices system’ and drawing attention to the importance of creativity as a major source of innovation. Creativity is linked to innovation through design as well as research, teaching, and experimentation in art and creative practices. Cultural institutions, such as libraries, galleries and museums also have a role in the ‘arts and creative practices system’. ...

In 2004-05 a total of $698m was spent on research and development in Canberra—amounting to 10.2 percent of total research and development expenditure in Australia. Almost 90 percent of expenditure in Canberra was performed in the public sector. Business expenditure on research and development Innovation, Creativity and Leadership amounted to $99m (1.0 percent of the Australian total). Sixty two percent of this was incurred in the electronic equipment and computer services (ICT) sectors. This compares with 11 per cent for Australia as a whole.

Several research intensive and software development based businesses have grown in Canberra and become sustainable, often on a global basis, on a foundation of relationships developed with Australian Government departments and agencies and the Defence Materiel Organisation.

However, the study indicates that contracting with the Australian Government presents particular challenges, particularly in the absence of a demonstrated ‘track record’. Unlike the United Kingdom and European countries, the Australian Government does not use its procurement system to source or stimulate innovation. This constitutes lost opportunity. ...

The strengths of the ACT science system relate to its position as an international centre and global hub for research and teaching excellence across a number of disciplines, including natural and life sciences, information and communications sciences, economics, the policy sciences and humanities, and curatorial studies.

Research excellence attracts top students who in turn provide the human
resource base for businesses starting up or relocating in Canberra, for government advice, and for national institutions wishing to tap into world class expertise and capabilities.

The arts and creative practices system reflects the location and activities of the national collecting institutions based in Canberra—including the National Library, the National Gallery of Australia, the National Museum of Australia, the National Film and Sound Archive, the Australian War Memorial and the National Archives—and teaching and research undertaken in the schools of art, music, design and architecture located at the ANU, the University of Canberra and the Canberra Institute of Technology. ...

A private college, the Academy of Interactive Entertainment (AIE), is a leading educator for the computer game development and 3D digital industries. ScreenACT, the ACT Office of Film, Television and Digital Media, is responsible for implementing industry development initiatives. Canberra has a developing film and television production industry, with a particular strength in non-fiction and documentary film, and which displays potential to grow. ...

In June 2006 there were 3,000 creative businesses in the ACT, representing 10.7 percent of all businesses in the Territory—this data does not include businesses located in Queanbeyan. Creative businesses have a higher propensity to be micro-businesses—with 40 percent of GST registered creative businesses being sole traders compared to 36 percent across all industries. This is reflective of a
pattern in other capital cities—particularly London and Berlin.

There is scope for substantial further development of the creative industries through linkages and partnerships between universities and colleges, creative content providers, the substantial computing capacity available in the ACT (through the ANU and NICTA) and optical fibre communications capability. ...

The study outlines a number of key issues that need to be addressed in going ahead with an innovation based economic development strategy. These include creating critical mass among smaller businesses through collaborations and networking, the exercise of leadership and building business capacity and capability for expansion and growth. ...

The study has suggested that there are a number of initiatives that can be put in place to capture and develop innovation opportunities for the ACT. There was a strong view that government, industry and universities should work in partnership to capture the ICT and creative capabilities of Canberra through investment in an MIT style media laboratory. ...

From: Innovation, Creativity and Leadership, Report of a Study of the ACT Innovation System, Howard Partners, for the Australian Capital Territory Government, March 2008, ISBN-978-0-642-60439-2,
ISBN-10: 0-642-60439-8

From Table of contents of the report:
Executive Summary 1
Recommendations 6
  1. Introduction 9
    1. Background 9
    2. Innovation and innovation systems 10
    3. The competitive environment 21
  2. Approach to the study 22
  3. The innovation policy context: vision, plans, and frameworks 23
    1. Innovation policy objectives 23
    2. The Canberra plan and strategy 24
    3. The economic framework 26
    4. Australian Government purchasing and procurement 32
    5. Issues and implications 37
  4. Innovation system capability 39
    1. Research and development capability 39
    2. Creative capability 52
    3. Business and entrepreneurial capability 62
    4. Conclusions 64
  5. Innovation system institutional framework 65
    1. Institutions for teaching and research 66
    2. Cultural institutions 67
    3. Lead businesses 68
    4. Networks 73
    5. Conferences, awards and prizes 78
    6. Technology parks and seed funds 80
    7. Investors 81
    8. Support services 83
    9. Policy and strategic framework 84
  6. Innovation system dynamics 85
    1. Framework 85
    2. System attributes 87
    3. Interactions and connections 90
    4. Issues and implications 92
  7. Canberra’s distinctive capabilities 93
    1. A City with an international outlook and connections 93
    2. An international centre for research and teaching 94
    3. Centre for culture, arts, and creative practices 94
    4. A Centre for defence procurement 95
    5. An attractive place to live and work 95
    6. Implications 96
  8. Best practice 97
    1. Berlin 97
    2. Ottawa 98
    3. Washington, DC 98
    4. London 101
    5. Wellington 102
    6. Observations and implications 103
  9. Some emerging trends 105
    1. The ‘democratisation’ of information technology 105
    2. The convergence of information technology and creative practices 106
    3. Higher education engagement 107
    4. Biotechnology 108
    5. Demand for security solutions 109
    6. Government procurement practices 110
    7. Centralisation of government administration in Canberra 112
  10. Key issues to address 113
    1. Creating critical mass 113
    2. Leadership 114
    3. Building a culture of collaboration 114
    4. Building business capability in the creative industries sector 115
    5. Support for new business development 116
    6. Resources 117
    7. Out-migration of skilled people 117
    8. Policy issues 117
    9. Innovation, Creativity and Leadership
  11. New visions for Canberra 119
    1. A centre for a technology, arts and creative practices industry 119
    2. A ‘connected city’ 120
    3. An international city of design 122
    4. An international centre for conservation management and practice 123
    5. Australia’s ‘education’ capital 123
    6. Sustainable City 124
    7. Issues and implications 126
  12. Actions and initiatives 127
    1. Establish leadership and direction 127
    2. Build a framework for new business support 130
    3. Advocate for innovation in government procurement 133
    4. Position Canberra as an international city 134

Attachment A: Strategies and actions to establish Canberra as an international city of design and architecture 135
  • Achieve UNESCO ‘City of Design’ status 135
  • Branding through the Canberra Biennial 137
  • Establish a Graduate School of Design 138
  • Plan for a National Design Museum 138
  • Encourage Establishment of a Peak Body for Design 139
  • Overall framework 139
Attachment B: Australian Government Contracts Gazetted for Procurement of Goods and Services in the ACT and Region 2006-07 141
  • Classified by ANZSCC Code 141
  • Classified by Agency/Department 144
Attachment C: Profile of Research and Development Expenditure in the ACT. 147
  • Overview 147
  • Higher education 148
  • Government 153
Attachment D: A note on financing start-up businesses 155
Attachment E: The MIT Media Lab 159
References 163

Table 1: ACT Industry Percentage Contribution to Total Factor Income 27
Table 2 ACT Employment by Industry Sector (‘000) 31
Table 3: Australian Government—purchases of goods and services in the ACT and region exceeding $10m 33
Table 4: Australian Government purchases of goods and services in the
ACT region—ANZSCC code 34
Table 5: Innovation system capability investment framework 40
Table 6: Higher education expenditure on R&D by type of activity 2004 ($’000) 41
Table 7: Higher education expenditure on R&D by type of activity 2004 (proportion) 41
Table 8: Summary of higher education expenditure on R&D by research fields 2004 ($’000) 42
Table 9: Summary of higher education expenditure on R&D by socio-economic objective 2004 ($’000) 43
Table 10: Higher education research commercialisation indicators 44
Table 11: Government expenditure on research and development 45
Table 12: CSIRO research commercialisation indicators 46
Table 13: Major Australian research infrastructure located in the ACT 46
Table 14: Business expenditure on R&D, by industry - by location: 2005-06 47
Table 15: All ACT Students by Higher Education Provider and Broad Field of Education, Full Year 2005 48
Table 16: Students by Higher Education Provider and Broad Level of Course, Full Year 2005 49
Table 17: Australian Government Business Support Programs 51
Table 18: Employment in Creative Industry Segments, 2001 census 54
Table 19: Number of creative businesses in the ACT by segment—2006 55
Table 20: Innovation system institutional framework 65
Table 21: Expenditure on R&D, by industry - by location: 2004-05 147
Table 22: Higher education expenditure on R&D by source of funds 2004 ($’000) 148
Table 23: Higher education expenditure on R&D by source of funds 2004 (proportions) 148
Table 24: Higher education expenditure on R&D by type of activity 2004 ($’000) 149
Table 25: Higher education expenditure on R&D by type of activity 2004 (proportion) 149
Table 26: Higher education expenditure on R&D by research fields 2004 ($’000) 150
Table 27: Higher education expenditure on R&D by research fields 2004 (proportion) 151
Table 28: Higher education expenditure on R&D by socio-economic objective 2004 ($’000) 152
Table 29: Higher education expenditure on R&D by socio-economic objective 2004 (proportion) 153

From: Innovation, Creativity and Leadership, Report of a Study of the ACT Innovation System, Howard Partners, for the Australian Capital Territory Government, March 2008, ISBN-978-0-642-60439-2,
ISBN-10: 0-642-60439-8
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