States need role in Turnbull's innovation agenda

By David Donaldson

December 8, 2015

The working relationship between the federal government and the states will play an important part in either hindering or facilitating innovation, while public servants still need to manage risk, say observers.

There has scarcely been anything but praise and welcome for the Turnbull government’s Innovation Statement on Monday.

Michael Hiller, KPMG’s national leader on infrastructure and government, echoed many in pointing out that too often ideas created in Australia were taken and commercialised elsewhere.

Competition between jurisdictions is healthy, but there also needs to be considerable cooperation to ensure governments play a constructive role in spurring innovation. Questions like how will entrepreneurs know which level of government to go to and whether they get consistent services across their dealings with government are important, he says.

“How is that conversation going to happen between the states?” he remarked to The Mandarin.

The creation of a new body, Innovation and Science Australia, to act as a coordination and advisory point will help, he thinks. Importantly, it will play a facilitation role, rather than controlling the agenda.

There are signs the states will be receptive to cooperation. Queensland Premier Annastacia Palaszczuk announced yesterday Leeanne Enoch would be the state’s first Minister for Innovation, Science and the Digital Economy. This shows it’s not just the federal government that’s serious about digital and innovation, thinks Hiller.

Victoria launched a public sector innovation fund to address policy and service delivery challenges last week.

Getting engagement with the private sector right will be another key aspect in driving progress, he says. The private sector often complains that it doesn’t have enough say in shaping public procurement parameters. When tendering specifications are too narrow to allow for new ideas, companies are not given the chance to show how they could improve outcomes and lower costs for government.

Local and state governments have been invited to stakeholder briefings this month and another round for regional areas in 2016.

Evaluate, but don’t ditch too early

Government also needs to think about how it will measure and evaluate some of its ideas. The Prime Minister has said policies will be thrown out if they’re not working, but success or failure for some initiatives will take years to become apparent.

The STEM — science, technology, engineering and maths — education push will bear fruit in around 10-15 years, says Hiller.

“We need different mechanisms and metrics to work out if things are working. There needs to be some level of accountability. It needs to be reviewed to check progress. But how do you get that right?”

And while the innovation statement announcement makes a good start, getting the settings right and putting frameworks in place, the other big part of implementing it is showing that it works. Quick wins will help demonstrate success and build momentum, he thinks. “Make it real otherwise it seems like more words.”

Notwithstanding the challenges ahead in putting the innovation agenda to work on the ground, those in the consulting world and their clients are glad to see innovation enjoying its moment in the sun, Hiller explains.

“The good thing is that there is generally bipartisan agreement that this is an important issue. It’s good to have some stuff about the future, some vision, some new ideas. Plus the fact that Turnbull is personally committed to it and really believes it is going to give it an important focus in government,” he says.

Drop the risk aversion, but do it intelligently

Hiller agrees with Tom Burton’s argument that the public sector’s culture of risk aversion is the “elephant in the room” on innovation. The question that needs to be considered is how you maintain probity and manage risk, but at the same time allow the right kind of dialogue to reach the best solution. “It will only work if there is genuine engagement on both sides,” he argues.

Government needs to tolerate more risk in the public sector to help make things such as service delivery challenges worthwhile. “That doesn’t mean taking will nilly risks, it’s about taking educated risks. There is not a great history and culture of taking risk in government, but there needs to be to make a difference,” he says.

Former chief of staff to prime minister John Howard and veteran political strategist Grahame Morris agrees it’s time for the public sector to embrace progress, but also urges bureaucrats to think carefully about managing risk effectively.

“This is a good time for departmental heads and senior people in the public service to really listen to clever people within departments who have interesting ideas,” he told The Mandarin.

“There needs to be two different types of ideas: those which create innovative and clever ways to improve what the service does, but also ideas on how to manage the risk that naturally comes where money is following an unproved idea.

“In this new clever country regime, the public servants have two jobs: one to get on board the clever country train, the other to oversee risk so that the government’s exposure is minimised,” he said.

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