Parliament House
Canberra, ACT
People have been talking about globalisation for a couple of decades now, but it didn’t mean much when China, India, Russia and Brazil – two-fifths of the world’s population – were outside the tent.
They aren’t outside the tent any more.
The integration of these countries and others like them into the international system of production and exchange has made the global competition for markets and resources more inescapable, more cut-throat, and potentially more rewarding than at any time in human history.
Countries around the world have realised that their best chance of gaining an edge in this environment is through innovation.
And I don’t just mean western industrialised countries like Australia.
You might think a place like India – ranked 160th in the world for gross national income per capita – would be content to compete on its cost advantage. (World Bank)
It isn’t.
India offers more lavish incentives for industrial research and development than Australia.
The same is true of China, and of Brazil. (OECD)
There is no way Australia can match the cost structures in these countries.
We can’t compete with them purely on price, but we can compete on quality, design, technology, originality, timeliness, customisation, service, marketing and product safety.
That doesn’t mean we raise the white flag on efficiency and productivity.
It means we focus on the one thing that is guaranteed to lift productivity in the long term – and that’s innovation.
As long as we are willing and able to embrace new ideas and new ways of doing things, we can create the competitive advantage we need to hold our own internationally.
Every country has an innovation system – at least of sorts – and every innovation system has its strengths and weaknesses.
Perhaps the biggest weakness of Australia’s innovation system is the gulf that separates the research sector from the business sector.
My portfolio was created to help bridge that gulf.
It brings industry – where just over half our R&D is performed – together with the universities and public research agencies like CSIRO.
I cover one or two other things besides these – including building regulation.
That makes me the Commonwealth minister responsible – through the Australian Building Codes Board – for the Building Code of Australia.
It might look like a portfolio that unites quite different worlds – and sometimes as I move from factory meeting to faculty meeting it can feel that way, too.
But despite their outward differences, factory and faculty are both part of the same world.
They are both part of our national innovation system.
During our first nine months in office I have taken steps to double the number of Australian Postgraduate Awards, and created 1,000 new Future Fellowships for mid-career researchers.
At the same time, I have established the Enterprise Connect network of manufacturing and innovation centres that will offer a range of services to small and medium-sized businesses, link them to new ideas and technologies, and act as gateways to other innovation infrastructure.
Again, training researchers at a university in Townsville and conducting a business review for a small manufacturer in Burnie may seem like very different activities, but both are about boosting Australia’s innovation skills and capacity.
The last of my four major reviews – of the automotive industry, the Cooperative Research Centres Program, the textiles, clothing and footwear industries, and the national innovation system – reported last week.
These will be the basis for new policies and programs which I expect to bind the different elements of the innovation system more closely together.
My aim is to increase collaboration, improve connections and concentrate resources and activity so that we can harness creativity wherever we find it.
The more we can get individuals, firms, institutions and sectors working together, the more successful we will be.
Building the innovation capacity of the private sector is a priority, but we also need to practice what we preach.
That means building the innovation capacity of government agencies and the communities we serve.
It means innovating in the public interest, not just in the interests of commerce.
And we can’t afford to confine our ambitions to Australia.
We have to integrate ourselves into the international system I talked about at the beginning – making ourselves indispensable not only to global markets and supply chains, but also to global knowledge networks.
Greenhouse
So what of innovation in the built environment?
In this sector – as in every other – arguably the greatest innovation challenge is climate change.
The associations represented here are clearly very mindful of that, and they’ve come up with several ideas for addressing the challenge.
This is exactly the kind of creative response we need.
This is why I’m a greenhouse optimist.
I accept the reality of climate change, but I do not accept that it must necessarily destroy our standard of living or way of life.
I believe there is a high-tech, high-growth, high-employment path to a low-carbon future.
We just need the innovation capacity to find it.
A study released last year by the Centre for International Economics found that the building sector is responsible for 23 per cent of Australia’s greenhouse gas emissions, and that energy use in buildings is growing rapidly.
But it also found that the building sector could cut its greenhouse gas emissions by 30 per cent or more using today’s technologies.
It found we could halve electricity demand in residential and commercial buildings over the next two decades by taking steps to increase energy efficiency.
We can make a difference if we want to – but will it happen?
How do we bring about the innovation needed to achieve these outcomes?
Green Building Fund
This goes back to my point about improving links between institutions and sectors.
There is plenty of work being done in our universities that the industry can use.
The Cooperative Research Centre for Construction Innovation is an obvious starting point.
It has done valuable work on eco-profiling and retro-greening buildings, sustainable subdivision and more.
CSIRO’s Sustainable Ecosystems and Materials Science and Engineering divisions are working on ways to make buildings and infrastructure more durable, more environmentally-friendly, and more attuned to the needs of users.
The Low Energy High Rise project run by the Warren Centre for Advanced Engineering at the University of Sydney is another example, and there are many others.
The capability is there – the challenge is to make effective use of it.
Governments must also be a partner in this process.
The Australian Government is doing its bit through the $90 million Green Building Fund, which is part of its $240 million Clean Business Australia initiative.
The Green Building Fund will provide dollar-for-dollar support for:
• retro-fitting energy-efficiency measures in existing commercial buildings
• and training to improve the skills of building operators.
The maximum amount available from the fund is $500,000 per building, and priority will be given to buildings of more than 5,000 square metres.
The details of how the Green Building Fund will work are being finetuned in consultation with stakeholders, and the program is expected to be launched in October.
The other elements of Clean Business Australia are:
• Climate Ready, which supports the development and commercialisation of new climate change solutions
• and Re-tooling for Climate Change, which supports the efforts of manufacturers to make their operations more water-wise and energy-efficient.
This is important, because our success in reducing the greenhouse impact of the built environment depends very much on the manufacturing sector – especially the manufacturers of building materials and supplies.
Many architects and engineers already work closely with manufacturers to solve specific design problems.
We need to make this kind of collaboration the norm.
COAG and building regulatory reform
It is no good governments going around urging everyone to collaborate if they don’t do it themselves.
That’s why cooperation is the watchword in the Commonwealth’s relations with the states and territories.
COAG has set an ambitious agenda for regulatory reform, which it is pursuing through various working groups, particularly the
Business Regulation and Competition Working Group.
Foremost among these reforms is the development of a National Construction Code.
The code will eventually consolidate all technical provisions – whether for building, plumbing, electrical fit-out or telecommunications – into a single document.
COAG will consider an implementation strategy for the code in December 2008.
Given the potential effects of the National Construction Code on the governance and funding of the Australian Building Codes
Board, the state and territory ministers and I recently agreed to bring forward a review of the inter-governmental agreement that underpins the board’s activities.
The findings of the review and the development of the new code will lead to more cohesive and integrated regulation for the built environment.
Industry Innovation Council
The government promised before the last election to establish a series of Industry Innovation Councils.
More recently, we have been consulting with stakeholders to ascertain what people expect of the councils and how they might work.
A clear message from the consultations is that councils should be flexible and focused on delivering real outcomes.
Councils covering strategic sectors and issues will be established over the next few weeks.
Their members will be high-level decision-makers who will advise me on innovation issues, champion innovation, and foster collaboration.
It is my pleasure this afternoon to announce that I will be establishing a Built Environment Industry Innovation Council.
This is our first innovation council, and I’m sure it will be an example for those that follow.
My department has consulted with the associations, industry, state governments, researchers and unions. All expressed strong support for such a council.
Innovation is about solving problems and finding new and better ways of doing things.
It is about diffusing new ideas and technologies.
It is about making the most of our existing strengths and building new ones.
The Built Environment Industry Innovation Council will do all of these things and more.
It will include representatives from business, unions, academe, research agencies and government.
The success of the Built Environment Industry Innovation Council will depend very much on the quality of its membership and leadership, so I’m extremely pleased to announce that Sue Holliday has agreed serve as chair.
Ms Holliday brings plenty of expertise to the job.
She is a qualified urban planner, with experience in planning and development, research, and government.
She has taken a special interest in questions of sustainability and affordability.
Sueis a both a doer and a thinker, and that’s exactly the combination we need.
The future
At the beginning I talked about the apparently disparate elements of the innovation system.
The professionals who help create our built environment are one of these elements.
Your work isn’t just important to the economy and the planet.
It has a profound bearing on the way people live, their level of social engagement, and the quality of life they enjoy.
For me, the big question in innovation isn’t how do we build a better mousetrap?
It’s how do we harness people’s creativity to meet human needs and fulfil human aspirations?
That’s a question I hope you will help us answer.