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Address to the Malaysia Australia Business Council, Kuala Lumpa.

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Senator the Hon Kim Carr

Minister for Innovation, Industry, Science and Research  


Senator the Hon Kim Carr

07 Jun 2010


Kuala Lumpur Malaysia

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I have great faith in people - in their intelligence, in their creativity, in their basic decency.

These are the qualities we need to draw on if we are to answer the huge challenges facing the world today.

You don’t need me to tell you what those challenges are.

We know that climate change is real.

We know that our natural resources are finite.

We know that we are still a long way from eradicating disease and want.

We know that inequality is growing.

And we have been reminded by the global financial crisis just how fragile the global economy can be.

This is a daunting list, but I remain totally optimistic about our capacity to solve today’s problems and generate new opportunities for tomorrow.

I am quite convinced that the future can and will be better than the past.

But it won’t happen by magic.

It will take a lot of thought, a lot of imagination, and no small amount of courage.

We must be prepared to harness the talents of our people.

We must be prepared to renew our institutions and industries.

In short, we must be prepared to innovate.

Powering Ideas

While Australia seems to have weathered the global recession better than many countries, this is not the time for complacency or self-congratulation.

Some European countries are still deep in trouble, and the recovery in many other places has been tentative.

Australia’s response to the crisis was:

• to stabilise the financial system • to stimulate short-term demand • and to start making the long-term investments needed to modernise the economy and prepare it for future growth.

Much of that investment has been in innovation, science and research.

In May 2009 the Australian Government released Powering Ideas: An Innovation Agenda for the 21st Century - and backed it with $3.1 billion in new spending over four years.

This additional support for researchers and entrepreneurs has played a critical part in keeping people in work over the past twelve months, and it will play an even bigger part in generating jobs for the future.

There is more to Powering Ideas than just new spending, however.

It is first and foremost an agenda for modernisation.

The nature of innovation has changed dramatically over the past decade:

• due to globalisation • due to the emergence of new players like China and India • due to the widespread diffusion of information and communication technologies

• and due to competitive pressures to engage in more open innovation methods.

Australia’s innovation system must adapt to these changes.

Entrepreneurs, researchers, workers, consumers and policy-makers are all part of that system.

To make the system stronger, we need to focus not just on the constituent parts, but also on the connections between them.

That is why the Australian Government has brought innovation, industry, science and research together in one portfolio.

The objectives of Powering Ideas are:

• to increase the number of Australian research groups performing at world-class levels • to boost international research collaboration by Australian universities • and to significantly increase the number of students completing

higher degrees by research over the next decade.

They are:

• to double collaboration between Australian businesses, universities and publicly-funded research agencies • to achieve a 25 per cent increase in the proportion of businesses engaging in innovation • and to continually improve the number of businesses investing in


In order to achieve these objectives, the Australian Government has dramatically increased support for public sector research, with:

• new programs to foster collaboration between institutions and between the higher education sector and industry • additional funding for indirect research costs • and improved indexation to maintain the value of funding over time.

At the same time, we have established Commercialisation Australia, which opened for business earlier this year.

It helps researchers and innovators translate their ideas into marketable products and services by providing support for:

• improving skills and knowledge • proving concepts • and undertaking early-stage commercialisation activities.

The $1.1 billion Super Science Initiative is building state-of-the-art infrastructure to support research in priority areas including:

• marine and climate science • space science and astronomy • and the platforms that will underpin the industries of the future, including biotechnology and nanotechnology.

Perhaps our most far-reaching reform of all is the new R&D Tax Credit currently before the Parliament.

There will be a 45 per cent refundable credit for firms turning over less than $20 million a year, and a 40 per cent non-refundable credit for all other firms.

This doubles the base rate of support for smaller firms - restoring it to pre-1996 levels.

It increases the base rate for larger firms by a third.

The new scheme is more generous, simpler and more predictable.

It decouples R&D tax incentives from the corporate tax rate.

The new model is consistent with world’s-best practice, and will be familiar to overseas investors - remembering that international firms will be able to claim the new credit, regardless of where the intellectual property is owned.

This really is a landmark reform, and the Government is determined to see it introduced as soon as possible.

Enterprise Connect

These new initiatives emerging out of Powering Ideas build on the achievements of the Government’s first year.

Foremost among these is the hugely successful Enterprise Connect.

This is a national network of centres, business advisors and research partners that offers free expert advice and business improvement grants to small and medium-sized firms.

Its aim is to lift productivity and build innovation capacity by giving these firms access to new ideas, know-how and technology.

OECD strategy

It is pleasing to see that the recently released OECD Innovation Strategy supports the approach we have taken in Powering Ideas.

The OECD argues that we should be:

• empowering people to innovate through education and training • encouraging entrepreneurship and innovation in firms

• strengthening the public research sector’s capacity to create and apply knowledge • and improving the way we regulate innovation, govern the innovation system, and measure innovation outcomes.

These are precisely the Australian Government’s priorities.

Through Powering Ideas, we have set clear goals, improved coordination, expanded capacity, and increased incentives for innovation.


We have also actively set out to internationalise our research and innovation efforts.

We are proud of Australia’s achievements, but we also recognise that global problems require global solutions.

Australia produces about 3 per cent of the world’s knowledge.

This is pretty good considering we have only 0.3 per cent of the world’s population, but it still means 97 per cent is produced elsewhere.

If Australia wants to share in that knowledge, it must play a bigger part in international networks and collaborations - including with Malaysia and our other neighbours in the region.

The foundations are already there.

For example, in 2008 we had 1,278 Malaysian students undertaking higher degrees by research in Australia.

Thirty-nine of them were supported by International Postgraduate Research Scholarships, which offer outstanding international students the chance to undertake a higher degree by research in Australia and gain experience with leading Australian researchers.

This is a great thing for both Australia and Malaysia.

The Australian Government is exploring how it can improve incentives to get more international postgraduates studying in Australia.

Of course, there is more to international collaboration than research exchanges.

We also need stronger industry partnerships.

Firms in both of our countries must constantly improve if they are to stay competitive.

This is how we maintain high-skill, high-wage jobs.

Australia and Malaysia have much to learn from each other in this regard - including in the automotive sector.

Square Kilometre Array

I would like to conclude by mentioning what I am doing when I leave Malaysia.

The next leg of my mission will take me to Italy, France, Germany and the Netherlands, where I will be involved in talks about the Square Kilometre Array radio-telescope - or SKA for short.

The SKA is one of the great international science projects of our time - truly global in its scale and ambition.

It will cost an estimated €9 billion to construct, maintain and operate over its fifty-year life.

It will be the largest and most sensitive telescope ever built.

As well as helping us unlock the secrets of the universe, the SKA will generate huge spin-offs in supercomputing, fibre-optics, non-grid and renewable energy, construction and manufacturing.

It will increase the global circulation of smart people and new technologies.

It will get young people interested in the study of science, technology, engineering and mathematics.

It will strengthen ties between countries that share a belief in science and a commitment to innovation.

Australia is one of two places short-listed to host the telescope.

The other is Southern Africa.

Australia is already investing more than $250 million in the SKA dream.

The money is being used to build:

• a pathfinder telescope to test and demonstrate technologies that may be used in the SKA

• high-performance computing capacity • and high-speed fibre-optic data transmission infrastructure to link our core site at Murchison in Western Australia with the rest of the world.

I began by affirming my faith in the intelligence, creativity, and decency of human beings.

The SKA fully justifies that faith.

It is proof that people still possess a sense of adventure, a sense of shared purpose, and a sense of wonder.

As long as we have those, I believe we are equal to any challenge.