Welcome to the ideas boom

In December 2015, the Australian Government launched the National Innovation and Science Agenda report.  According to this report:

The National Innovation and Science Agenda will focus on four key pillars:

  1. Culture and capital
  2. Collaboration
  3. Talent and skills
  4. Government as an exemplar

Before Cats fall over laughing at the notion and suggestion of “Government as an exemplar”, this agenda was the basis for the Government’s innovation policy.  And to demonstrate commitment, this policy came with $1.1 billion over four years.  And by commitment, it commited $1.1 billion of other peoples money over four years.

According to this jobs’n’growth agenda, there is a role for Government:

Government supports innovation by investing in enablers such as education, science and research, and infrastructure; incentivising business investment; and removing regulatory obstacles such as restrictions around employee share ownership or access to crowd-sourced equity funding.

The Government is investing around $9.7 billion in research and development in 2015-16. Around $3.2 billion directly supports business sector R&D and much of the rest funds research in universities and research agencies such as CSIRO.

Government also enables innovation by investing in traditional infrastructure such as research laboratories, roads and rail and digital infrastructure such as the nbn, which currently passes 1.5 million premises, with construction to begin in areas covering almost 7.5 million premises over the next three years.

The National Innovation and Science Agenda will drive smart ideas that create business growth, local jobs and global success.

It’s like an episode of Yes Minister or Utopia.

NBN as an enabler of innovation.  Right.  Why not add the spend on the ABC to the bucket for innovation investments.  Its communication, education and content infrastructure.  Hey.  What about the $126 million Parliament House fence because it will create the conditions for Government Innovation Policy Ideation to Fertilize the Entrepreneurial Mindset.

And to suggest that some $5 billion odd spent on University Research is all investment.  Ha.  Not a lot of commercialization opportunities generally come from the University of Sydney Gender Studies faculty.

But anyway.  Jobs’n’Growth.  Jobs’n’Growth.

In 2010, 3 researchers from College London published a paper on entrepreneurship and government.  The conclusions?  Would it surprise that they found “entrepreneurial entry is inversely related to the size of the government”.  No!  It cannot be.  Government size adversely impacts entrepreneurship?  What about all the Commonwealth innovation, entrepreneurship and business promotion bureaucrats and programs?

So wrote Aidis, Estrin and Mickiewicz:

we find a robust negative relationship between the size of the government and entrepreneurial entry.  Consistent with earlier findings (Parker, 2004; Henrekson, 2005; Koellinger and Minniti, 2009), we argue that an extensive welfare state supported by high level of taxation reduce the incentives for nascent entrepreneurs. This in turn, has wider implications for economic development.

An extensive welfare state supported by high level of taxation reduce the incentives for nascent entrepreneurs.  Gee.  Who would have thunk it.

The media keep talk about dog whistle messaging.  The job’n’growth message must have really been meant for residents of Canberra.  Extra jobs and lotsa departmental budget growth for them.

Australia’s policy wonks have latched onto the expression evidenced based policy.  It is thrown around to give the halo of some sort of science or rigor going into policy development.  But it seems that evidence is never used to review policy outcomes; because the evidence is that much of the policy emanating from our governments are destructive.

See renewable energy, nbn, submarines.  But jobs’n’growth.

Follow I Am Spartacus on Twitter at @Ey_am_Spartacus

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16 Responses to Welcome to the ideas boom

  1. jupes

    What about the $126 million Parliament House fence …

    FMD how can a fence cost $126 mil? The contractor must have shown a lot of innovation and agility to win that contract.

    Oh well, another bill to pay for our immigration policies. Thanks Muslims.

  2. I am Spartacus

    When it comes to the security of Parliamentarians, money is no object. Sorry. Other people’s money is no object.

    Recall also, this fence was in part commissioned by then speaker, the Hon. Bronwyn Bishop. So part of the $126m may be a emergency escape helicopter for the speaker.

  3. Infidel Tiger

    $126,000,000!!!!

    Fuck me. And people thought the homo survey was a waste of coin.

    We are so cooked.

  4. Alex Davidson

    Wisdom from Richard Ebeling on this subject: The foundations of prosperity and freedom

  5. Art Vandelay

    And to suggest that some $5 billion odd spent on University Research is all investment. Ha. Not a lot of commercialization opportunities generally come from the University of Sydney Gender Studies faculty.

    Even if these funds were ‘invested’ in research, there would be no economic benefit:

    In 2003, the Organisation for Economic Cooperation and Development published a paper on the “sources of economic growth in OECD countries” between 1971 and 1998 and found, to its surprise, that whereas privately funded research and development stimulated economic growth, publicly funded research had no economic impact whatsoever. None.

    This earth-shaking result has never been challenged or debunked. It is so inconvenient to the argument that science needs public funding that it is ignored.

    The myth of basic science

    In the news lately, Turnbull and the SA government have been claiming that the establishment of an Australian Space Agency would somehow bring about an Australian space industry and ‘create jobs’. As Spartacus’ post argues quite nicely, the creation of yet more bureaucracy will in reality bring about the opposite result.

  6. John Constantine

    “That’s just brilliant, Julie Bishop.”

    They are finally getting the hang of this,Comrades.

  7. The National Innovation and Science Agenda will focus on four key pillars:

    Culture and capital
    Collaboration
    Talent and skills
    Government as an exemplar

    Those 4 mean nothing.

    How about;

    1: how to exploit a good idea
    2. Running a business
    3. Dealing with petty paper shufflers
    4. Negotiating an ATO Audit

  8. NuThink

    Note that number one in the innovation stakes is Switzerland which has a very tiny government.

    https://www.globalinnovationindex.org/analysis-indicator

    Australia at number 23, below New Zealand and China.

  9. RobK

    How it’s done elsewhere:
    During 2016, the National Museum of American History has adopted “America Participates” as its theme. Naturally, my own thoughts have turned to how Americans have participated in innovation, both yesterday and today. In this post, I’ll describe how the democratic features of the United States Patent System enticed a broad spectrum of the American population to become inventors in the 19th century.

    Let’s go back to the very founding of our nation, when the importance of invention was written right into the Constitution. Article I, Section 8 granted Congress the power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

    The ensuing Patent Act of 1790 duly granted inventors the exclusive rights to their inventions for 14 (later 17) years. In exchange for this temporary monopoly, the inventor was required to publish a full description of his invention (the patent), which became freely available for public use after the term expired. When the Patent Office examined new and useful ideas and granted its imprimatur, the resulting patent became a secure form of intellectual property—a tradable capital asset that inventors could sell, license, or exploit as the basis of new entrepreneurial ventures. Overall, the founders believed the temporary patent monopoly would economically incentivize inventors to create more new technologies, while the eventual free and widespread use of those technologies (after the patent’s expiration) would benefit the public.

    Long before 1790, many European nations and city-states had already established patent systems. For example, the Venetian Patent Statute of 1474 allowed inventors to register their devices with the local government and receive 10 years of protection against infringement. However, former Lemelson Center fellow Zorina Khan has argued that the American patent system differed considerably from its predecessors in her book, The Democratization of Invention: Patents and Copyrights in American Economic Development, 1790-1920 (New York: Cambridge University Press, 2005). In France and Britain, for example, patents were grants of monarchial privilege conferred only upon wealthy elites. High registration fees meant that inventors patented major, capital-intensive inventions but not incremental improvements, effectively discouraging continuous innovation. Plus, European patents were precarious and could be overturned by an unpredictable judiciary or revoked by the Crown. In contrast, the US patent system was an impersonal and transparent bureaucracy. After 1836, a merit-based examination system awarded patents to the “first and true inventor”—even women, former enslaved African Americans, and foreign citizens—who were otherwise disenfranchised. Unlike Britain, US registration fees were modest and patent specifications were publicly accessible, encouraging continuous improvements and technological diffusion. Furthermore, the early federal courts affirmed that patents were a secure form of intellectual property. The result of these policies, Khan argues, was the “democratization of invention.” In short, inventors-entrepreneurs could easily access and trust the protection of the America patent system, and this encouraged a broad cross-section of Americans to participate in innovation during the 19th century.

  10. NB

    ‘Government size adversely impacts entrepreneurship?’
    Goodness, no! You mean ‘Entrepreneurship adversely impacts Government size.’
    So thank goodness the Government has the solution to this awful cause and effect relationship.

  11. rickw

    Would it surprise that they found “entrepreneurial entry is inversely related to the size of the government”.

    Here’s how:

    I’ve spent almost 12 months on the permitting process for my workshop, instead of being in my workshop making and developing stuff.

  12. H B Bear

    Let’s ask the Minister Assisting about the National Innovation and Science Agenda. Wyatt … Wyatt … you here mate?

    Well it didn’t work out so well for him.

  13. OldOzzie

    From the Australian Financial Review today

    Article Australia’s descent into economic mediocrity

    According to the Forum, the competitiveness of the Australian economy is ranked 21 out of 137 countries. The countries with the most competitive economies are Switzerland, the US and Singapore. Countries we like to benchmark ourselves against such as Britain, New Zealand and Canada were ranked eight, 13 and 14. (If Winston Peters supports a Labour/Green coalition government in New Zealand that country’s ranking might change pretty dramatically.)

    Red tape burden

    In reply to the question “In your country, how burdensome is it for companies to comply with public administration’s requirements (e.g. permits, regulations, reporting)? [1 = extremely burdensome; 7 = not burdensome at all]” Australia is ranked 80. Yes, 80 out of 137 countries. It shouldn’t come as a surprise to anyone that at a cost to the Australian economy of $176 billion a year, red tape is our largest industry.

    The report revealed it’s possible for Australia to be ranked in something even lower than 80th in the world. On the question of “In your country, to what extent do regulations allow flexible hiring and firing of workers?” Australia ranked 110. New Zealand ranked 15. On the question “In your country, to what extent do taxes and social contributions reduce the incentive work?” Australia ranked 102. New Zealand ranked 19.

    An indisputable figure in the WEF report is how Australia’s gross government debt as a share of GDP compares against other countries. On this measure Australia is ranked 51. In 2005 only seven countries had a lower level of government debt than Australia. Now 50 countries do.

    If rankings like these are the result of Australia holding the record for the longest run of uninterrupted growth in the developed world, one can only speculate how much more mediocre we’d become in a recession.

  14. Pingback: And so it begins | Catallaxy Files

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