Australia is under-performing in the new and highly profitable knowledge economy, according to a University of Queensland public policy researcher.
Dr Rachel Parker from UQ’s School of Political Science and International Studies has warned that Australia’s economic competitiveness, industrial transformation and high-quality employment generation could be hampered by the failure of government to create the structures for learning, innovation and industrial change.
The knowledge economy is a term used to group high technology industries such as information technology, telecommunications and biotechnology.
Dr Parker’s findings are based on research into the knowledge economies of six leading OECD countries: Australia, Sweden, Ireland, France, the US and Taiwan. She receives $45,000 in the 2005 UQ Foundation Research Excellence Awards announced on September 22 as a highlight of UQ Research Week 2005.
Dr Parker said part of the problem was that Australia did not have a history of success in medium/high technology industries.
“As a consequence of this we don’t have the accumulated competence that can be used in these new industry sectors. So we don’t have an industrial training ground for our graduates to develop that industrial competence,” she said.
“Another reason is that although the government in Australia is good at funding research, it is not very good at coordinating business activity.”
Dr Parker said her research, which is also funded by an $88,000 Australian Research Council Discovery Grant, would take another two years to complete, but had already revealed some interesting findings.
“Nations and regions that develop encompassing networks that bring together a range of actors, including governments, universities and businesses, that make decisions about how to direct resources and build competence in the region, are better able to transform themselves so they can compete in knowledge-intensive activities,” she said.
Dr Parker said Australia’s failure to build these networks meant that in the long-term the country would become relatively uncompetitive in industries that were of high value.
“This means that the quality of employment and economic activity in Australia will be lower than it could be,” she said.
“It also means that Australia’s trade performance will be quite poor because we will have to import goods that are very expensive and we tend to export goods that are of relatively low value in international markets.”
Dr parker is examining the way in which national and local spaces are governed in different countries and the role institutions such as universities, governments and small enterprises play.
The aim of the research is to explain why some nations and local regions are more successful in the knowledge economy.
Her research has already shown that the way in which societies and economies are governed and the ways in which investment is directed and coordinated affects performance in knowledge intensive activities.
“Dense and encompassing networks of actors in the public and private sector that coordinate activities are able to build competence and create a national or regional identity around particular knowledge intensive activities,” she said.
“These governance networks have the effect of stimulating entrepreneurial activity and attracting resources to a nation or region.”
Dr Parker said she was trying to find out what sort of structures and processes of governance were best suited to the knowledge economy.
“Why is it that some nations and local regions perform well in the knowledge economy -has it got something to do with the way in which they are governed – the way in which businesses, universities and governments come together and coordinate their activities?”
Dr Parker, who completed her PhD at UQ in 1997, said Australia needed to think about what mechanisms it could use to increase its level of participation in the knowledge economy.
She said it was important that governments played a more proactive role in economic development.
“Governments need to be prepared to invest resources to build competence and also to create the structures within which both government and business can coordinate decisions,” she said.
“This requires not just extra money, but visionary people in government at the national and local level who are able to mobilise support for industrial transformation.
“We need to have policy entrepreneurs who have a vision of how to transform the nation and region.”
Dr Parker, who has also been working with the Australian Institute of Commercialisation on a project examining technology transfer to small and medium sized enterprises, said Australia could have a lot to learn form the outcomes of the research and she hoped governments would use the information when designing innovation policies.
Media: For more information, contact Dr Rachel Parker (telephone 07 3365 2655 or 0416 281 071, email rachel.parker@uq.edu.au) or Chris Saxby at UQ Communications (telephone 07 3365 2479, email c.saxby@uq.edu.au).
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