- BRW Lists
Published 27 August 2013 11:27, Updated 28 August 2013 07:40
Sir James Dyson says innovation is “expensive, and risky – but essential”. Photo: Rob Homer
With just 12 days until the September 7 federal election one of the world’s leading entrepreneurs, Sir James Dyson, says there’s still time for both political parties to get serious about innovation.
Three years ago, British Prime Minister David Cameron asked Dyson to advise him on how Britain came once again become one of Europe’s leading high-tech exporters.
Dyson, the design engineer best known for inventing the bagless vacuum, is one of Britain’s biggest success stories. His report, Ingenious Britain, challenged the UK government to raise R&D tax credits to 225 per cent, provide greater funding for high-tech start-ups, and introduce changes at the industry and university level that help build the next generation of scientists and engineers.
As Cameron noted at the time: “In it are the ideas that will help us create new, high-paying jobs right across our country.”
Dyson. who according to the Sunday Times Rich List 2013, has a net worth of £3 billion ($5.2 billion), says that since the UK government implemented some of those recommendations, particularly in relation to the R&D tax credits, in 2011 patent applications in Britain rose 29 per cent.
He now thinks Australian politicians, who are bereft of comprehensive policies on innovation, could benefit from a similar approach.
“Investment in research and development is the only way to develop patentable high technology for export,” Dyson told BRW. “Australia has a history of inventiveness but to continue competing globally it is important that businesses are encouraged to keep investing in their ideas. It is expensive and risky – but essential.”
Dyson’s comments come as a new report launched today by Deloitte Private called, Startups. Playing it safe is the biggest risk, found that Aussie entrepreneurs are being held back by cultural fear of failure, a lack of corporate and government support and capital.
Call for R&D tax breaks and greater funding for start-upsAustralian manufacturers are finding it hard to compete against their Asian rivals, where the cost of doing business (especially wages) is far lower. UK faced exactly the same problem, and called on Dyson for advice on how to change that.
He says as a starting point Labor needs to stop robbing big companies from R&D funding. Labor announced a policy under former Prime Minister Julia Gillard to raise $1 billion over the next four years by preventing firms with an annual turnover of more than $20 million from accessing R&D tax breaks.
He says that policy needs to be scrapped. “A tax system that incentives investment in research and development is key,” he says.
Dyson also recommends greater funding and mentoring for Australian startups.
“High-tech start-ups, with great ideas, burn cash,” he says. “A mix of grants, advice and incubator support can provide the leg-up that they need to become healthy businesses with a fighting chance of export success.”
The incubator space in the Dyson Building at the Royal College of Art in London, is allowing graduates to spin their ideas out of university. “They have access to business advice, funding and the resources needed to get their idea off the ground,” Dyson says. “They are having a 95 per cent success rate as a result, compared to a 66 per cent national average. It is a model that seems to work.”
Australia’s engineering “identity crisis”Just like in the UK, engineering has had an “identity crisis” in Australia, resulting in a skills shortage. “There’s a shortfall of some 20,000 engineers, which will hold back some of the most research intensive industries,” Dyson says.
If Australian politicians are serious about re-balancing the economy toward high-tech industry, they must invest in science and engineering. “The right incentives need to be available to support firms to develop Australian ideas, rather than seeing them sold abroad,” he says.
Support for universities is key. Australia needs to go ahead with creating a “robust national curriculum” that supports students to study, and teachers to teach subjects related to science and engineering.
“From an early age children must be encouraged to have inquiring minds and develop their own ideas: designing, building and testing,” he says. “It is a policy for the long term – there are no quick fixes.”
He says Australia already has excellent universities and some of the world’s best engineering graduates, a few of which they employ at Dyson’s headquarters in Malmesbury. Dyson’s bladeless hand-dryer was developed by one of them.
“In the past three years the James Dyson Award has been won twice by young Australian engineers,” he says. “They are now seeking to commercialise those projects.”
He says Dyson has a team of 1200 engineer. The company employs new ones constantly to help create new technology for Dyson now and for the next 30 years. Keeping them in Britain means that the high-value intellectual property also stays in the country.
What Rudd and Abbott have promised on innovation: not muchBoth major parties have limited policies on innovation. Labor has said it will create a $10 million small business NBN innovation fund giving grants to developers of NBN applications. Once developed, the new applications would be made available free to all small businesses.
In early August Labor also announced a “Medical Technologies Innovation Partnership”, which will be headquartered in Macquarie Park. The policy builds on its earlier innovation precincts in food and manufacturing.
Opposition Leader Tony Abbott meanwhile has announced that as part of his manufacturing policy the Coalition will look at the effectiveness of existing R&D tax breaks. But as yet, there’s no firm promise to increase the R&D tax break or any indication of what impact this will have on revenue.
Deloitte Private: startup sector could boost economy by $109 billion
Deloitte Private today released research based on a panel of thought leaders from the Australian startup ecosystem including BlueChilli founder Sebastien Eckersley-Maslin, Southern Cross Venture Partners founder Bill Bartee, the man behind Australia’s largest tech start-up event SydStart, Pete Cooper, and Commonwealth Bank executive general manager Kelly Bayer Rosmarin.
The leader of Deloitte’s Technology Fast 50program, Joshua Tanchel, who hosts the interactive panel, says that by 2033 the Australian start-up sector could employ a million people and contribute $109 billion, or 4 per cent of gross domestic product, to the economy, if Australian politicians and industry got serious about supporting start-ups.
“Large companies and government ignore technology at their peril,” Bill Bartee says. “They begin to adopt technology only when it begins to disrupt their particular business.”
Eckersley-Maslin says there’s a lack of risk capital: “We have a great flow of ideas coming from the research and development centres, where there is a lot of support and government incentives,” he says. “Where we are lacking is in the commercialisation of those ideas, and getting them to the venture capital and private equity markets.”