E&OE
Innovation is the key to productivity, it is the key to success in the modern world. The times we are living in are unprecedented in terms of the change that we face, the pace of change is unprecedented in both its scale and its pace. What that means is that if you want to succeed, as a nation, as a company or as an individual, you have to be prepared to embrace those times, and you have to be prepared to make volatility your friend. You can fight against it if you wish, but you'll lose. You have to recognise the times we live in and seize the opportunities they deliver.
So that's what the National Innovation and Science Agenda was about. That was my first major economic policy announcement in 2015. And you know, when I announced it with Christopher Pyne and Wyatt Roy, the Minister and the Assistant Minister, I said that I could not guarantee that everything would work because you know, journalists always say, will you guarantee this will work. Well, I said, no, I can't. I said some of these measures will not work and we'll dump them. Some of them will be reasonably effective and we'll seek to improve them. And if we see anybody doing something that achieves the same goals better than us, we will shamelessly plagiarise them - you can do that in government, I wouldn't encourage you to do that in software.
The bottom line was - it was innovation, it was agile, and it recognised the nature of the times.
Now, the Innovation and Science agenda had many elements, literally two dozen elements, ranging from new funds - the Biomedical Translation Fund; the CSIRO Innovation Fund, which Main Sequence Ventures manages; tax concessions for early stage investment, changes to our corporate insolvency rules so that we had a greater emphasis on business continuity. It's always been an agenda item of mine, because I admired the way chapter 11 and the United States encouraged businesses to keep going, rather than allowing secured lenders to pull the shutters down and wipe everybody else out just so they could get their money back. But it had a whole range of initiatives, and some have had greater impact than others, there's no doubt about that.
What we do know is that we have today a much stronger innovation ecosystem, a much stronger venture capital ecosystem than we had five or six years ago. In fact, five years ago, there was about $155 million raised for venture capital in Australia. In the last two years it's over 10 times that amount. And you all know that Australia is now seen as a center for innovation. We are seeing so many unicorns, many of them represented here today, and many centurions that will go on to become unicorns and startups that will become centurions. We are seeing that ecosystem develop and it is in large part due to the encouragement that the National Innovation and Science agenda gave.
I think in a way, even more important than the particular measures, was the fact that we started talking at a government level about the importance of innovation. Now there are plenty of people that encouraged me not to do that, I might say. There are plenty of people in the political environment who believe that the way to win is to trade off, or prey on people's fear of change. I said if you talk about innovation, people will think that means there's going to be a change and someone with a computer is going to take their job. Well, that is a political reality, and there are people that exploit fear of change in every environment and this rise of populism, rise of protectionism around the world, is a feature of that.
But believe me, denying change, in denying the importance of innovation, is like denying climate change, it's denying reality. You know, the world is changing. So if you want to live in the past as a country or as a company, in other words, if you want to deny the changes that are around you, then you will get taken over and you've only got to look at so many examples of businesses, great businesses, that denied the changes around them, and then got wiped out by newcomers.
So if you are not prepared to disrupt your own business, to be prepared to in effect disrupt the way you're conducting your business, your government, the way you govern, the way you administer the government, if you're not prepared to do that somebody else will do it for you.
One of the most important things about innovation is providing the ecosystem, the environment, that support it. I've talked a little bit about the NISA and I know Matt and I will talk about it later. These measures, whether it's legislation or schemes or funds, they've got to be renewed all the time. You know you can't just set and forget in an area like this. You've got to be constantly examining, as you do in your businesses, constantly examining the changing environment and saying, well is this still working? Okay, it's not still working well we'll do something else.
You've got to treat everything as something from which you learn, this is one of the biggest problems, the fundamental biggest problems in government. I sought to change that culture, you get this blame-based culture, this culture where people are afraid to make a mistake, afraid to undertake something new for fear that it may not be as successful or perform in accordance with expectations. So what? Not everything does, not everything will, that's why I set the expectations very clearly. You have to be able to say, politicians have to have the courage to say this - these measures are the best ideas I have to solve the problem at the moment, done a lot of work this is the best idea we've got. We believe it will work, but if it doesn't, we'll do something else and we'll certainly learn a lot from the process".
You've got to set those expectations, right? This is second nature to people in business, particularly in startups and in technology and innovation-based businesses, but it is still a huge change that we have to confront in politics.
Can I talk about ecosystems in another way? One of the biggest undertakings during my time in government was the well-over $200 billion investment in the Australian Defence Force's capabilities: new submarines, new frigates, offshore patrol vessels - whole range of capabilities across the three Armed Forces. Those capabilities are overwhelmingly being built in Australia. Now that was not because I wanted to pork barrel jobs in one part of Australia or the other. It was because I recognised, and my Ministers recognised, and I give a lot of credit to Christopher Pyne in this regard, because he really understood innovation - it was a pity he wasn't Innovation Minister for longer but he had other jobs to do - the reality is we recognised that if you have a continuous defence industry in Australia, which is right at the cutting point of technology, obviously, that creates an ecosystem from which will spin off so many other businesses, opportunities, whether it is in advanced manufacturing per se, or whether, for example, it is in cybersecurity. Look at the way the cybersecurity sector has boomed in Australia in recent years. That is a direct consequence of our cybersecurity strategy we published in 2016, supported by funding, supported by AustCyber and other institutions, all of which were designed to create that ecosystem.
Another big part of our ecosystem is Livable Cities. Again, the reality is capital is mobile and fairly objective about where it goes, humans are less so. If you have livable cities that is a real economic benefit. When we talk about the environment, when we talk about mass transit, when we talk about the amenity of the cities in which we live - and we have great cities in Australia - all of that is a massive economic asset as well. But you know what, the biggest asset, the most important asset is all of you.
government policies are critically important but ultimately, our best assets are not under the ground, they're walking around on top of it. Your courage, your commitment, your preparedness to have a goal and if it doesn't work out, have another go. That commitment is what is driving our innovation economy and what is driving our economic future what is ensuring it. Because productivity is the key, and innovation is what enables productivity. So without you, Australia will not have the bright future that it does and what a thank you for your efforts.
Thank you for your innovation and I wish you all the best for the StartCon conference. Thank you.
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