The ACT Chief Minister, Andrew Barr, MLA, recently took a trade mission of some twenty two Canberra based business people to the United States, visiting in particular San Francisco and Austin. A champion of innovation, a priority of the ACT Government, Mr Barr is acting to ensure Canberra is recognized as a globally competitive, clever city, one which achieves long lasting economic growth. The Canberra Entrepreneur interviewed Mr Barr about his thoughts on innovation, innovative practices in the ACT and the future of innovation in the ACT, prior to his departure to the United States.
Who are the key players in Canberra’s innovation ecosystem?
Well, clearly the CBR Innovation Network takes the leading role, but they’re an umbrella organisation with a number of foundation partners; they link into a network that to varying degrees was either incredibly well established, but also presented the opportunity to bring together some more fledging organisations under that umbrella. So the list is extensive, in terms of foundation partners, the universities, the CSIRO, and NICTA. But then with the Network I think you could also include Capital Angels, Australian Capital Ventures, ANU Connect Ventures, the Business Chamber, Entry 29, CollabIT, the Academy of Interactive Entertainment, Lighthouse Innovation, and I guess, a number of key individuals who themselves have either contributed through those organisations, or of their own accord. That’s a very long list, some of whom will be familiar to your readers, but to give you the greatest hits, Murray Rankin, Jessica May, Craig Davis, Marcus Dawe, Glenn Keys, Nick McNaughton and David Gall, would be all worthy of being named in that list.
Do you believe it is possible to tactfully cultivate innovation, rather than to deliberately plan for it? As in, do you believe in an organic method of growing innovation, or something as planned and sanctioned as the Multi-Function Polis Point project?
Both. I think there’s clearly value in some government engagement and coordination of activities, and then in some instances that can just be establishing the framework, or providing some initial resources in order to enable a number of key players to come together, and then pursue their own path. Equally if there’s too much of a heavy hand from government, then I think that has the potential to stifle innovation and creativity. So we have wanted to put some boundaries around where we would provide support, but then equally want to ensure that the investments we made could either leverage other financial investments, or simply provide in some instances a very practical support around physical infrastructure. The building that the CBR Innovation Network is housed in, that floor that is currently provided, it’s an ACT Government building, but we’ve made that space available, so that’s at the very practical end.
In terms of policy frameworks, that again can vary depending on the level of market failure, or perceived market failure, and the extent to which their might be a need for the government to avoid free riding. So Canberra’s innovation community is more collaborative, I think, than others, but let’s also be realistic here. You’ve got people who are potentially competitors, who aren’t necessarily likely to want to collaborate unless there is some facilitation. Another very practical example of this, next month I’ll take about twenty two Canberra businesses with me on a trade mission into the US, San Francisco and Austin. Now, there’ll be some team Canberra collaborative efforts there, but equally there will be people needing to pursue their own business interests. So there’s a role for government to create some structure around formalising a trade mission, and we can make certain connections and provide certain opportunities, but at that point it then is up to people to decide what they’ll make of that.
We provide a small level of subsidy, I think it’s about three thousand dollars per company, associated with that trade mission, but it will be one of the largest ones that we’ve ever taken to the US. We had a slightly larger one to Singapore last year, but given the extra distance associated with getting over to the West Coast of the US, that’s still a pretty large group.
Could you explain the consultation process with Canberra’s business community that informed the creation of the KILN Incubator?
Well, in a large part that was a CBR Innovation Network driven priority. I mean, it fitted within the broad policy framework of the business development strategy, and the innovation elements there, as well as the desire stated within the broad policy document around supporting incubation and start-ups. But look, the bulk of the initiative, the efforts to bring it to bear came organically, and then there was really just an approach to government, I guess for an endorsement that it was within the purview of the funding arrangements that we had, we’d put in place, and that I was invited to speak at the launch, I guess, to give a level of government endorsement to the initiative.
I mean, broadly speaking in this space, as long as there’s financial liability behind innovations, collaborative innovations like that, a sense of alignment and direction, that the direction aligns with where we’re taking the broader policy framework, then go for your life, really, has been my approach to those sorts of requests and ideas that emerge out of the Network. That’s sort of the point of it, really. The government is certainly not going to be the font of all good ideas in this area, and really we’ve got an enabling and facilitating role, and then from there, these things will be successful if there’s passion and commitment behind them, outside of what the government can bring to the table.
Using whichever timeframe you feel is applicable, could you please give a brief outline of the intended, planned trajectory of Canberra’s innovation ecosystem?
I was talking with Dr Sarah Pearson about this following her recent US trip. There’s, I think, a pretty clear view, a consensus emerging that the building blocks are in place now, that many, many, but not all, of the key ingredients that have led to success in other parts of the world are now in place in Canberra. We’re a bit short on venture capital, we are a little bit short on entrepreneurship in a couple of sectors, but that’s not to say we can’t get there. The university partnerships are very strong, the links into government are perhaps exceptionally strong actually, but we sort of expect that in this economic reality for a city like Canberra.
Where there are some gaps it’s clear that we need to work on those, and that’s I guess one of the reasons for national and international engagement in terms of the model that we’re trying to build. The interesting dilemma from here on in is the extent of that collaboration and whether, to put it bluntly, how many good ideas are shared, and how many are retained within our own network. And you want to err on the side of being inclusive and working with other areas that are pursuing similar outcomes in Australia. But just as our own issues are around balancing collaboration versus outcomes for individual businesses, we’ll have that same challenge in the national environment, and then I guess ultimately also at international level.
Where this can go over the next five to ten years is really a case of when it’s appropriate for the government to inject resources into the sector. Now, that can be through a continuation of the sort of model we have with the CBR Innovation Network, or it can be us filing in a bit of that market failure around venture capital, which we have done in the past. There are some risks with that obviously in terms of public money, but we have made some resources available previously, and not every venture that we have invested in through various vehicles has been successful, but the ones that have have actually paid a reasonable return and allowed us really to reinvest back into an available pool of funds.
We will need to look at further foundation partners, engagement with multinationals, if we are to significantly grow the size of the CBR Innovation Network in particular, but ultimately, those are decisions for the Board. The government has a voice there, but we’re not the only voice in that context, but it would seem fairly important to continue to expand the number of partners in the project more broadly.
Do you believe the policies, initiatives and projects in place in Canberra to encourage innovation could be transposed to other major cities around Australia?
Major cities, maybe not, but smaller cities, so I mean we’re interested in collaboration with Adelaide for example, in terms of what’s happening there. Sydney and Melbourne are just different, and on a much larger scale, and Brisbane is heading that way too, but if you were to then look at, I don’t know, the fourth through eighth largest cities in Australia, yes, I think the model would have some applicability. We are a pretty unique, in a pretty unique set of circumstances; not many other cities of our size would have access to government, the number of higher education institutions and public research institutions on the positive side of the ledger, but some other cities that had I guess a longer history or more private enterprise as the basis of their economy would probably have advantages that we don’t have. So with some tweaking, yeah, you could see this model work elsewhere.
Could you speak as to how the Invest Canberra initiative is progressing?
Yes. It’s multifaceted. So there’s an external investment facilitation element that really is around taking investment opportunities in Canberra and selling them into international markets or national markets. So that element has been recently successful in attracting major international players into bidding for projects in Canberra. So 59 minutes ago the bids for the light rail project closed, the two consortia who bid for those projects are some of the biggest names in world infrastructure. Invest Canberra was engaged in a number of outreach activities to present that infrastructure opportunity in Southeast Asia, around Australia and into Europe and the US. So we were successful in getting a number of major companies to bid.
Then there’s the trade focus, which manifests itself in trade mission and opportunities that I’ve talked about previously.Then I guess our other opportunity through Invest Canberra is facilitating an environment for unsolicited proposals to government, now, that’s more challenging. Not so much that we don’t get unsolicited proposals from time to time, but putting in place a framework to assess them, meeting all of the requirements around protecting IP, but at the same time providing transparency in government procurement.
It will, I think, always be the case in Canberra that a large number of unsolicited proposals will relate to land use, or access to land as a key factor in the support, would underpin the economics of an unsolicited proposal. So that can vary from, hypothetically speaking here, someone saying “I’d like to build a theme park in Canberra. All I need is a block of land. Will the government lease me that land?”. Our response to that can be everything from wanting to negotiate a direct arrangement with the person or entity that’s come up with the idea, or we can say “That’s an interesting idea, we will contemplate having a public auction for land for the purpose of a theme park, and you are more than welcome to bid for that land”. That I guess meets the openness around the procurement, so that whoever, everyone has the opportunity to bid for the theme park land But that might be a little unfair to the theme park guys if their idea, the theme park, is so innovative that only they had thought of it, and they were bringing something unique to the table. A theme park’s probably a good example in the sense that they’re not unique, but someone may have a very innovative proposal that were we to just go to a public auction, we would have to open up all of their IP to everyone else.
So we have a policy framework, Invest Canberra certainly has a role in certain instances, say using my theme park analogy again, if we did decide “Yep, we’re going to go with that idea, but open it up to as many possible players or potential investors”, then Invest Canberra would clearly have a role in marketing that opportunity to the widest possible field, so that we could get the most number of potential of investors or partners in such an innovation. Other times it might be such a unique proposition that we would just negotiate directly with the business or entity that had put the idea forward.
You’ve spoken about the ACT government’s commitment to accommodating local businesses and the innovation ecosystem. Do you believe the ACT Government will be able to make timely decisions in identifing emerging innovations and removing the barriers that might impede them?
We certainly, that’s our intention. In some areas I think that process is working quite well, in others it would be fair to observe that we have a way to go, in terms of our own, particularly within our own procurement for opportunities within ACT government service delivery. I have made the observation publicly and privately, to the general public and to senior ACT bureaucrats, that often on the trade missions I’ll lead I’ll be taking 20 companies with me who have products or services that we’re trying to sell to other governments, and the question is asked “Does the ACT government use company X’s services?”, and the answer is often no. The question needs to be asked why. In some instances it’s because another company won a competitive tendering process. Other times it’s because our procurement processes are quite conservative, so we might for example use a Commonwealth Government pre-approved panel of businesses that are allowed to, or prequalified to tender for a particular project, and it can be very hard for smaller local enterprises to get onto Commonwealth Government tender panels. So we need to think a little about how we approach our own procurement.
The aspiration is certainly there. It’s now really a question of those elements of the second phase of the business development strategy that seek to facilitate those sorts of opportunities being embedded within our procurement process, and then there’s a cultural issue around risk, to what extent we are prepared to take risks with our own procurement. Because you can see in certain sectors, in certain areas of government, that it’s easier to go with a known product that might be working in another State or Territory, rather than necessarily than backing an innovative new player with something locally. But we have put in place some changes, both to the weighting within our procurement assessment, to give a leg up to local SMEs.
Do you believe in promoting innovation and entrepreneurship to Canberra’s population, that those who are unsuccessful, due to the statistical chances of success, will become cynical about innovation and entrepreneurship?
Well, look, there’s always that risk, I’d hope that the processes that are underway, the changes that are occurring are recognised and actually resolved in practical outcomes. That’s not to say though that every SME, every local SME is going to be successful with every tender that they put forward to government. Then it’s not just necessarily about government as a procurer, business to business sales will be an increasingly important part of the innovation and entrepreneurial framework within the city too. So the question will be asked of other Canberra businesses to what extent are they going to be supporting smaller business opportunities, or indeed peer to peer opportunities, businesses of a similar size.
When the Public Service Innovation Month was launched on the 6th of July this year, Glenys Beauchamp PSM, Secretary, Department of Industry and Science, spoke of the public sector’s need to be ahead of the curve in terms of innovation, do you believe this is possible? Do you believe that both levels of the public services could potentially incorporate the innovations being developed and implemented in Canberra in real time?
I’ve got more faith in the capacity of a smaller public service to be more responsive, and one that in large part is involved in service delivery. Commonwealth, which is not to say is to let the Commonwealth off the hook here, they certainly do have a role to play, but within a large part the Commonwealth Government, outside of defence, trade and foreign affairs and the like, is largely involved in transferring money around, that’s all they do, they don’t actually deliver anything, they just shuffle money around the economy. Now, sometimes that money shuffling is for very important and worthy reasons, social security and taxation and the like, so you’d like them to be innovative and responsive in terms of the systems that support that sort of activity. But a large part of the Commonwealth budget also involves transfers to State and Territory governments to actually run hospitals, schools, build roads, do things.
So I think there’s more opportunity for nimble and innovative public sector responses at the State and Territory level, and at the local Government level too, given that that’s part of our gig. You are just closer to the people you’re delivering services for, you’re more likely to have more frequent smaller procurements as well. So look, I’d say that yes, the Commonwealth have a role to play, but you’re going to see more from State and Territory Governments.
Have you looked to any other cities around the world for inspiration in your plans and efforts to generate innovation in Canberra?
Yes. And the list includes San Francisco, Portland, and Washington, and I’ll soon add, I hope, Austin to that list, that’s where we’ll be next month in terms of US cities. In Southeast Asia, Singapore, Shenzhen in Southern China, in terms of other cities in our region, Wellington in New Zealand is another reasonably good inspiration. They’re all cities I’ve visited with the exception of Austin, where we’re going next month, so they would be my starting point, but I’m sure there are more. I look forward to the opportunity to visit other places that might provide further inspiration for us.
Do you believe that running innovative projects and initiatives such as the CBR Innovation Network, in collaboration or partnership with Canberra’s tertiary education providers and research institutions, leads to greater connectivity between the respective organisations?
Look, I think the evidence is there to support that, and again, from very practical ends of the social events where they just bring together people, so what the Innovation Network’s got, what, First Wednesday Connect, they’ve got Collaborative Innovation Labs, they’ve got the Youth and Stir program, and a series of other workshops, there’s four very practical examples. I guess the whole point of the network is to support that sort of innovation and partnership, and it reflects a reality about the makeup on Canberra’s economy. So on one level it’s sort of a no brainer, that yes, these are institutions you want to have in as part of this Network, but then just on the sheer scale of either people employed and working in these sectors, or students, I think it’s one in nine Canberrans either work or study at one of our higher education institutions, so it’s not a bad way to connect up a significant part of the population.
Do you believe that major infrastructure projects, such as the planned light rail network, provide an opportunity for Canberra’s innovation ecosystem to contribute its innovative solutions to any impediments and issues encountered?
Well, there’s no doubt that accessibility, liveability and the social and cultural environment of a city helps attract and retain people. So dysfunctional cities in terms of their day to day operations tend to be economically more chaotic and a little less able to respond to growth demands. Getting ahead of that in terms of your infrastructure program is a lesson that a number of Australian cities could learn from a number of other cities elsewhere in the world. I think there’s been a chronic underinvestment in infrastructure in this country in recent times, particularly driven out of a fear of public debt. So we’ve gone through an era where the idea of the government having any debt was seen as a bad thing, yet for a period, anyway, prior to the GFC, what that resulted in was a massive shift of debt from public debt into private hands. Again, nothing wrong with private sector debt as well, but I guess the simplest way to put this is the approach to infrastructure investment in Australia, if you were to apply it in a household context, would effectively require every household to save up the full cost of their house before they bought it, rather than putting a deposit down and then having a mortgage and paying your housing off over a period of time. So this sort of false view of intergenerational equity that is the current generation must be able to fully pay for all infrastructure for the next generation in the current time period is in fact going to leave the next generation with a shortfall in necessary infrastructure.
It’s hard to envisage in the current political environment that any of the major iconic infrastructure projects that were built in Australia in the last century are able to be delivered in this environment. So there would be no Sydney Harbour Bridge, no Opera House, no Snowy Mountains scheme, none of those major public infrastructure projects would have occurred in the current environment.
Now, that’s not to say that governments today don’t need to be prudent about infrastructure projects that they might support longer term. There’s not an endless stream of money, but I’m pretty firmly of the view that having a functioning city with appropriate infrastructure, where the costs of that infrastructure delivery are paid for over an extended period is not an unreasonable approach. A practical, local example of this is the recently completed dam, it’s a one in a 100 year project, provides water security for this city for the next century, and so it is reasonable that the costs of that project are spread over the four or five generations who will benefit from it. But if our approach had been “Right, we can’t build it until we’ve saved up five generations of capital”, would mean that we would have placed at risk our city’s water security, so there’s your very practical local example.
So it’s a long winded answer to say yes, we need to continue to invest in infrastructure to support the liveability of the city, because with that you have a capacity to attract and retain people who will make choices about where they live and work based on factors beyond just how much money they might make in a certain position. There’s more to life than that, just making money.
Could you describe how Access Canberra is providing regulatory reform to the business community?
Look, the whole point of it is a consumer business focused one stop shop. So the previous arrangements were that if you needed to get something done, get a permit, undertaken an activity, you would spend the time running around somewhere between five and ten different areas of ACT government seeking approvals. Sometimes what you might want to do would pit two different regulatory agencies against each other, and they would in their own siloed view, just doing their job, to say well, yes or no on a certain activity, and there wasn’t coordination across government. Sometimes you would have public servants at the same level, notionally, one says yes, the other says no, and they’re really being a circuit breaker for actually getting an outcome.
So what we have in place now, a one stop shop, a system where someone is ultimately in charge of making a decision and balancing various risks associated with approvals, simultaneous to improving the actual structures within government. Our ability to be outwardly focused, rather than inwardly focused, has been sort of a critical analysis of each piece of regulation that we enforce or don’t enforce, and fairly common sense testers apply to it that if we are not enforcing something, or we are not able to enforce something, then you have to question the value of that regulation in the first place, and then see whether it does actually pass a reasonableness test.
In some instances there are regulations there that no, you can’t enforce every possible circumstance, but you want to send the message around appropriate behaviour, and so you would have that in place. But there are other times when for the life of me I couldn’t justify why it is that we required things to happen in a certain way. Sometimes it was simply because “Oh, that’s the way we’ve always done it”, and that isn’t necessarily the correct answer to a regulatory environment. So the focus has been on simplification, coordination, and preparing material really from the perspective of the client and the user, rather than necessarily the needs of the regulatory body. So that’s meant rewriting a lot of stuff into plain English, reducing the size of forms, and the frequency with which licences and various permits are issued or required. Then there’s a big leap into digital, so that forms, information approvals can happen 24/7, rather than someone having to print out a form, hand write it, hand it in at the government shop front, and then wake weeks and weeks and weeks for a letter to be posted back to them. We are now delivering a much more streamlined service there.
It’s not even twelve months old, Access Canberra, but in its short period it has made a significant difference in a number of areas. There’s still a way to go, it’s by no means a complete journey, and we’ve got a couple of great examples of where we want to be in terms of we know our government shopfront, public interface, the new facility in Gungahlin is a good example of that. But there’s still a way to go elsewhere.
We’re working with the Commonwealth Government and the Digital Transformation Office on a range of initiatives to effectively support a seamless one government platform for government service delivery. So an example of this would be business X or consumer Y would go through a necessarily secure identification process, and then select which government agencies or services they are happy to have their data and information shared with, to then create a more seamless experience. So think of a major life event or a major business event, you move house, you open a new business, you get married, you have a baby, anything like that that triggers sort of multiple information points and interfaces with different levels of government, imagine only having to do that once. You would simultaneously inform Medicare, the Tax Office, the ACT Revenue Office, the ACT Public Education System, the library, you name it, and it would be up to you who you linked your information to. From a business perspective you’re applying, you can see that overlay with tax, payroll tax, company tax, et cetera, et cetera, where one interaction online then streams a whole bunch of information to a number of different areas.
So that’s where we’re headed with this, still a bit of a journey to go, but also I’d say an exciting economic development opportunity for SMEs in Canberra in particular to partner with the ACT and federal governments to deliver this new environment.
More details and information about ACT Chief Minister, Andrew Barr, MLA, his initiatives, activities and his recent trade mission to the United States can be found over his website and those of the ACT Government.