Australia must urgently review the way innovation works if it is to stay competitive, according to a Microsoft Australia discussion paper.
The paper spruiks up Microsoft's vision for "Joined-Up Innovation", which it describes as a new approach for improving connections within the "innovation ecosystem".
There's no mention of the new recognition of Australia as a regional leader in cyber warfare (CDN, yesterday). But Pip Marlow, Microsoft Australia MD, says she is concerned about regional Internet access and wants the Abbott Government to show more leadership in preparing for Australia's digital future.
"If we want to maintain - and preferably improve - our competitive position, we need to reinvent our innovation ecosystem for the information age, rather than sticking with models developed in the industrial age," Marlow says.
"Australia has amazing strengths. These range from our wealth of natural resources to our location in the fast-growing Asian region, our economic and political stability, cultural diversity and smart population."
She said the Joined-Up Innovation plan comes from a conviction that innovation and productivity are co-dependent. It features a particular focus on the potential for gains in the small and medium-enterprise (SME) sector.
"SMEs are often overlooked as a source of innovation in this country," Marlow said. "However, they develop more than one third of Australia's gross domestic product and account for more than half of private sector employment. Previous research has shown these businesses are less risk-averse than large companies, giving them a greater willingness and cultural capacity to innovate."
New research by the Price Waterhouse group, launched along with the discussion paper, shows transforming SMEs from tech laggards to leaders could increase GDP by nearly $6 billion in 2012-2013, increasing real wages by 0.5 per cent and raising revenue in the economy by $11 billion.