Financing Innovation: Markets and the Structure of Risk.

Abstract

Over the past two decades, Australia has failed to build significant positions in the technological revolution that has transformed the global economy. In high-tech industries such as software and electronics Australia has been left behind, and in emerging sectors such as biotechnology, it threatens to be. There is no intrinsic reason for Australia's poor innovation performance. Australia is not less entrepreneurial than other developed countries or less scientifically creative. We have the human and financial resources. The challenge is to ensure policy settings provide the right incentives to encourage and develop frontier technologies such as biotechnology and nanotechnology, as well as ensuring the diffusion and upgrading of new technologies within established industries. The CEDA report contains analysis of Australia's recent innovation performance by a group of leading innovation experts. The report argues that an effective national innovation system plays a central role in enhancing competitive capability. If current weaknesses in Australia's innovation track record are not addressed, our future economic development will be seriously impeded.