This paper was a submission to Financial System Inquiry.
Innovation plays an integral role in growing a nation’s economy, employment and standard of living through the development of new products, processes and fledgling industries. The importance of entrepreneurship is particularly pronounced in developed economies where the marginal returns to capital and labour continue to diminish and increases in standard of living are increasingly driven by advances in innovation. Therefore, a key challenge for the governments of developed countries globally is creating an environment that is conducive to innovation and ensures that capital is made available to commercialise viable innovations
This report assesses the current state of innovation financing in Australia against the most successful innovation ecosystems internationally and to provide recommendations on how policy may improve the performance of innovation ecosystems in Australia. The recent cessation of the operations of a number of long-standing brand names in Australia provides a timely backdrop to this report as a reminder of the importance of innovation and the need to constantly develop new industries and to commercialise innovative ideas.