Dave Sharma (Wentworth, Liberal Party) Share this | Hansard source

It's a pleasure to speak to this motion about something that's incredibly important to the economic future and prosperity of Australia. This is really about innovation and making sure Australia remains competitive in a world that is increasingly driven by ideas rather than physical goods. This is because the nature of value creation in a modern economy is changing.

Increasingly value resides in data produced rather than in physical goods, increasingly services rather than products dominate economic and commercial activity in our countries and increasingly spaces, often virtual spaces rather than physical places, are the marketplace for a huge amount of economic activity in this country and, indeed, around the world. If you look at the biggest companies by market capitalisation in the world these days, they're all companies that basically deal in information and data. They're quite light on physical infrastructure but very heavy on the use of data.

In 1967 in the United States, the largest companies by market capitalisation were General Motors, Standard Oil, Kodak, AT&T and IBM. If you look at the United States today, a little over 50 years later, none of those companies would feature in the top 20 companies by market capitalisation in the United States. Instead it's companies like Apple; companies like Alphabet, which owns Google; companies like Microsoft; companies like Facebook; and companies like Amazon. In our own region, we've got companies like Tencent in China and also technology related companies in Japan and Korea. I think that tells us something: if we in Australia want to remain a high-skill, high-wage economy that's able to provide a generous social safety net, we need to make sure that we're at the edge of that value creation too. You'd have to say that, at this point, we're not. If you look at the ASX 20, the only genuine technology company that I think you could highlight is CSL, which is a genuinely competitive, world-class Australian company. But most of the rest of the ASX 20 is still dominated by quite traditional industries—banking, telecommunications and insurance as well as natural resources.

Australia have a lot of the ingredients, I think, to be a very competitive, knowledge-intensive economy. We have a highly skilled workforce, we have great research institutions and universities, and we have deep and sophisticated capital markets. But up until this point—and it's true—we haven't been great succeeders at commercialising some of these ideas and turning what is an incredible raw product into a marketable product that can drive economic activity.

If you look at our universities, for instance—and I think this is really one of the missing pieces in Australia's commercialisation challenge—we've got some of the greatest minds in our country in our large research institutes. We've got 80,000 research staff employed altogether in Australia. Twelve years ago our universities spent $2.8 billion on research and we produced 23,000 publications. Today, 12 years later, the corresponding figures are $12.2 billion being spent on research, almost a fourfold increase, and over 100,000 publications, so the output, if you like, of research in our universities has grown fourfold in the last 12 years. But has that had an impact on our universities? Have we seen more commercialisable ideas come out of our universities? Have we seen new businesses, new companies, new enterprises come out of our universities in the last 12 years? I wouldn't say that there's been a quantum leap anywhere commensurate with the research activity inputs that have gone into producing our research. I think in part—and I know the minister has touched upon this—it's because the focus of the universities has been on international rankings, which has led to a drive for international students to fund the larger research volumes and publications that allow universities to drive up the rankings, and neglecting a bit the production of ideas, which can not only improve society and better our economy but lead to commercial outcomes as well.

I believe we've taken important first steps in the budget to begin to address this. We already spend significantly on the R & D tax incentive in Australia, and that is one of the largest single items we do to support R & D. We've also announced, of course, the patent box in this budget, which will initially focus on biomedical and biotech industries and over time, I hope, will grow to other areas. We've also assembled a task force of some of the best minds in our country to provide advice. The task force's consultation paper, which is about raising our level of research commercialisation, has now been released. This is an important challenge for Australia, and it's important we get it right for our economic future and the prosperity of our children and their children.

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