Australian Innovation Policy Ignores Australian Evidence
Australian innovation policy has the ecosystem collapsing, coming off peak government enthusiasm, but starved of support
Rhetoric peaked a few years ago, with a Future Made in Australia, a National Reconstruction Fund, and critical minerals processing initiatives to support an energy transition. State governments and federal ministers spoke convincingly about turning Australian research excellence into industrial competitiveness and building “sovereign capability”.
Today, the programs announced with fanfare struggle to find appropriations. State innovation infrastructure investments wind down without renewal. The machinery created to support company-building like Industry Growth Program gets quietly defunded, while the press releases celebrating its creation remain on government websites. It’s not that local capability doesn’t exist, it just seems policymakers can’t recognise it and support it, even when it’s sitting right in front of them.
This issue cannot be blamed on any specific program or one side of politics. Sadly it is a systematic pattern that has defined Australian innovation policy for at least the past decade.
International benchmark addiction
Australian innovation policy has become a catalogue of international comparisons, looking overseas for answers. The recent closure of SXSW Sydney was a great example. Carolyn Breeze from Scalare Partners correctly identified the fundamental problem: wasteful importing of international spectacle over investing in sustainable local infrastructure.
Yet even then discussion still defaulted to other imported solutions. Founder-first infrastructure, progression pathways, ecosystem principles, all borrowed from international startup ecosystems without any consideration of the Australian context. International benchmarking has value, but what about the Australian evidence we ignore?
Australia does have precedent for industry-led success. You only need to go as far as the speeches from State and Federal Industry Ministers who use the same go-to list: WiFi technology, CPAP devices, polymer banknotes. Minister Ayres cited these in his November address to the National Innovation Policy Forum. So did NSW Minister for Industry and Trade Anoulack Chanthivong MP at the 2025 InnovationAus Awards.
The irony cuts deep when ministers celebrate these achievements in keynote after keynote, while the inventors sit in the same room unrecognised. Policymakers fail to understand who built what they are celebrating, and they certainly don’t understand how it happened.
The Australian context then and now
Those achievements didn’t happen by accident. Department secretaries like Neville Stevens (who later went on to chair the CRC Committee) recognised different industries need different support.
NICTA delivered research commercialisation outcomes (before ‘consolidation’ into CSIRO ended its industry focus). Technology Precincts, supported by industry associations like the Australian Electrical and Electronics Manufacturers Association, connected clusters with research capability. Senator Kim Carr’s advocacy for industry innovation precincts during the Rudd-Gillard government evolved into the Industry Growth Centres under the subsequent government, generating local company revenues, wages and employment growth from the $305M investment (ACIL Allen found results consistent with top OECD performers). The CRC Program delivered $5.61 GDP per dollar since 2005.
These were not theoretical exercises. They were programs where Australian industry leaders operated government initiatives in specific sectors to deliver measurable commercial outcomes. Each emerged from focused, industry-specific research partnerships, not consolidated cross-sector coordination.
Today’s approach, however, treats sectoral diversity as a problem requiring administrative correction.
The Strategic Examination of Research and Development frames reform through “mechanisms to improve coordination and impact of R&D funding and programs across Government.” Minister Ayres describes “160 research related programs delivered across 14 portfolios” as evidence of fragmentation. The Department calls for “simplification, alignment and system-wide coherence.”
Coherence has become the organising principle of innovation policy, even as effectiveness has quietly slipped from view.
WiFi, CPAP devices, and polymer banknotes came from programs that understood specific industry needs. None would survive today’s consolidation agenda.
The result of administrative tidiness? An innovation architecture easier to manage from Canberra but progressively less capable of generating the industry-led breakthroughs ministers celebrate in speeches.
Companies we ignore
This same issue extends to our home-grown companies. Imagine how different the ‘present made in Australia’ would look if 20 years ago we’d systematically supported Australian companies that were already commercialising technology globally.
Lycopodium built world-leading minerals processing capability serving mining operations across 80 countries. Started in Perth, grew through commercial discipline, now employs 3,000+ people with $500 million annual revenue. They translate mining technology into global markets every day.
Austal pioneered advanced manufacturing in shipbuilding, building high-speed ferries and defence vessels sold to the US Navy. Revenue exceeds $2 billion annually. They prove Australian manufacturing can compete globally when properly supported.
Nufarm developed agricultural chemistry solutions serving farmers across 100 countries, generating $3 billion in annual revenue. They translate agricultural research into commercial products that Australian farmers use and global farmers buy.
These companies represent exactly what Minister Ayres’ Future Made in Australia agenda targets: blue-collar jobs in advanced manufacturing. Lycopodium employs process engineers and manufacturing technicians. Austal employs welders, fabricators, and shipbuilders. Nufarm employs chemical engineers and production workers. If we’d systematically supported companies like these 20 years ago with vendor-centric programs, how many more of them would still exist in Australia today?
While these are fantastic Australian companies, sadly they are the exception, not the norm. We have lost many to overseas investment due to the lack of support back home. RPMGlobal (the last ASX-listed mining software company) acquired by Caterpillar for $1.12 billion in 2025. Mincom to ABB. Altium’s PCB design software to Renesas. Optus to Singtel. ADI to Thales.
A post-2010 pattern across mining software, electronics design, telecommunications, defence manufacturing. Australian companies moving offshore not because they failed commercially, but because local support for Australian companies didn’t exist when they needed it most.
Interestingly, the acquirers are still here. Caterpillar, ABB, Renesas, Singtel, Thales all have Australian presence, proving our market isn’t too small. They’re here filling the gap, commercialising Australian research and taking it to the world. They have taken the place of our home grown companies who were unable to gain support.
Imported founder worship
Instead of celebrating what we had, we embraced Silicon Valley’s founder culture with enthusiasm. Ping pong tables, Instagram-worthy office spaces, and capital raises celebrated like revenue milestones.
Taxpayer-funded facilities where aspiring founders could gather and look the part. The problem when success is measured by number of exits, it suggests founding companies is a career choice. Where more often than not, success is the consequence of discovering a problem worth solving, and being passionate enough about the solution to build a business around it.
Capital raises measure investor confidence. Customer revenue measures market validation. We’ve imported a culture that celebrates the former while ignoring the latter.
Lycopodium, Austal, and Nufarm weren’t founded to be cool. They were created by people who saw market gaps and built companies to fill them, and this difference matters.
What Future Made in Australia could have saved?
Imagine Future Made in Australia existed in 2010. Industry-led like the Growth Centres, sustained investment across market cycles like the CRCs. Supporting local companies, not innovation hubs or “crowding in funding.”
ADI would still be Australian-owned defence manufacturing, not absorbed into Thales. Mincom would be scaling from Brisbane, not dismantled by ABB. Optus would be an Australian telecommunications innovator. RPMGlobal commercialising mining automation from Perth, not sold to Caterpillar.
These companies were globally competitive with blue-collar manufacturing and high-tech engineering jobs. They moved offshore because grant funding with fixed project timelines doesn’t build companies. They needed sustained capital; we offered grant cycles and consultants.
The same choice exists today, but time is running out for what remains of Australian-owned industry.
We can’t stand by and let treasury thinking drive innovation policy through “program consolidation,” “rationalisation,” or “coordinated cross-sector approaches.”
We don’t have time to repeat what hasn’t worked: importing international models, providing only debt and equity through NRF, cutting the Industry Growth Centres, hollowing out CSIRO.
International comparisons should inform Australian innovation policy, but they are benchmarks not blueprints.
Germany has Fraunhofer because Germany has 83 million people, integrated European markets, and manufacturing-dominant economy. Israel funds startups because Israel has military technology transfer, global diaspora networks, and NASDAQ-ready exit pathways. Australia has geographic isolation requiring born-global thinking, and resource-sector dominance creating technology translation opportunities other countries simply don’t have.
Future Made in Australia should rebuild local industry through Australian companies with sustained capital to commercialise Australian research.
Local evidence proved Australian companies could translate local innovation, far more effectively than academic spin-outs or imported accelerator models.
Maybe it’s time we gave them some support.
Australian Innovation Exchange works with established Australian companies to translate local research into commercial success.