There is a lot of talk about innovation these days, but are we really innovating in the areas where we could generate the most benefit for Australia and the world?

What is clear is that the decline in mining revenue, the elimination of manufacturing jobs and climate-dependent uncertainties in agricultural productivity mean Australia’s future prosperity cannot depend on endlessly repeating the past.

The decline of coal and, indeed, all fossil fuel exports is inevitable if nation states are to comply with the Paris agreement. That won’t happen overnight, but the pace of change will inevitably accelerate as a more concerned and aware younger generation seizes political control.

Future prospects for our greatest single tourism asset, the Great Barrier Reef seem increasingly dim. The bleaching that’s killing the corals is a direct consequence of ocean warming.

With 0.3% of the world’s population, we produce around 1.4% of the world’s greenhouse gas emissions (and that’s excluding the emissions from our coal exports). But the fact remains that there’s relatively little Australia can do to protect the long-term health of the reef.

We could act to limit agricultural runoff. And, thinking innovatively, we might research if it’s possible to engineer or transplant more heat resistant corals. But apart from the technical challenges, any long-term success will depend on how hot the seas eventually become.

If we’re thinking about places where a country like ours with a small population can hope to innovate in ways that generate new technologies and more jobs, the area with the greatest potential is renewable energy.

Playing to our strengths

We live on the world’s largest solar collector. How do we exploit that to serve our own energy needs and, beyond that to develop a clean energy export industry? One possibility is to produce an Asia-Pacific solar “super grid”, with Australia exporting solar energy to our neighbours.

Given that we have massive solar resources, and assuming a realistic global price for carbon (say A$100/ton levied on everything from energy generation to transport), Australia would become a highly desirable place to site activities that require a lot of energy. An obvious, immediate application is to host global data centres.

We also have a strong record of innovation in the medical area, with the new Medical Research Future Fund being tangible evidence that this is recognised at the political level.

Vaccines, such as Gardasil, and devices such as the ResMed sleep mask and the bionic ear have been major dollar earners, although each hasn’t necessarily created many domestic jobs.

Given our increasing ethnic diversity and our centrally organised national health system, Australia is a great place to do clinical trials that will be acceptable to the emerging powerhouses, such as China, in drug discovery and development.

And we have established great models for networking university and research institute talent across the nation.

Sometimes, I fear our politicians take too narrow a view of medical research. They fail to grasp that the Australian Research Council and CSIRO-funded chemists, physicists, mathematicians and so forth are centrally important to this enterprise, although that is understood by those who administer the funding agencies. And cutting research support funds to universities is a major regressive step.

Research prosperity

That said, a great deal of innovation has nothing to do with the formal research sector. Innovation in areas such as design, visual imagery, fashion, surfboards, bicycles and so forth is based on the insight and energy of inventors and entrepreneurs.

That’s also true, to some extent, for innovation in engineering and architecture, although developing novel solutions is likely to benefit from regulations and/or investment strategies that mandate, for instance, energy efficiency and “greening”.

Government definitely has a part to play here. If we look at Silicon Valley, for example, an enormous amount of support has been supplied by US Department of Defence and Department of Energy grants.

CSIRO chief Larry Marshall’s strategy to take the institution down a more entrepreneurial road is understandable. What is regrettable, though, is that there has been no real political commitment to continuing the “public good” (and long-term economic good) science that has been a major focus for CSIRO and should, perhaps, find another home.

One option would be to establish a new National Institute for Earth Systems Science that incorporates some of the CSIRO activities that are slated for cuts.

If we don’t understand what is happening with the climate, tides, soils, water, biodiversity and so forth, we limit our capacity to innovate in response to environmental stress. We also risk making very bad political decisions about where to invest for future development and to mitigate the effects of climate change.

Surely Australia should be the great laboratory for water conservation and dry land agriculture. That won’t happen if we compromise the necessary science.

Finding the advantage

As a research scientist, the principle I’ve always adopted is to align with selective advantage. That means collaborating with talented people (especially those at close range with different expertise) and tackling issues where there is real need.

The big questions are: what are our selective advantages as a nation? And how do we exploit them?

Although there are signs of erosion, one great advantage we still have is that we live in a socially progressive and generally tolerant society with a strong record in science, education and the arts.

So, although governments can help get the settings right and provide some resources, genuine innovation depends on the actions of smart, courageous and determined entrepreneurs.

Where the US prospers, it’s because it has outstanding tertiary educational institutions that produce such people, it invests in science and technology and it recruits talent from across the world.

That’s one place where we can take a lesson from their book. Although, when it comes to social policy, other centres of innovation such as Scandinavia and Germany seem to be more relevant to us.

Innovators want to live in places that are safe, decent, have affordable education, and value personal freedom, bold ideas and creativity. What we are as a culture is a major component of our selective advantage, and we need to preserve that distinctiveness.