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Imagine

Australia


PRIME MINISTER’S SCIENCE ENGINEERING AND INNOVATION COUNCIL


2 December 2005


THE ROLE OF CREATIVITY IN THE INNOVATION ECONOMY



The Role of Creativity in the Innovation Economy


T H E CREATIVE IMAGINATION KNOWS NO DIVIDE BETWEEN SCIENCE A N D ART. IT SEEKS THE UNKNOWN AND IT INVENTS THE FUTURE. AUSTRALIA HAS DEE P WELLS OF IMAGINATION, AND THEY’RE DISTRIBUTED RIGHT ACROSS ITS POPULATION.


THIS IMAGINATION IS A HUMAN RESOURCE WHOSE CREATIVE POTENTIAL HAS YET TO BE FULLY TAPPED AND TRANSFORMED INTO ECONOMIC AND SOCIAL VALUE FOR AUSTRALIA. THE TIMING HAS NEVER BEEN BETTER FOR A MA JOR GOVERNMENT INITIATIVE TO HELP MAKE US A CREATIVE AND INNOVATIVE NATION.


PMSEIC Working Group on ‘the role of creativity in the innovation economy,’ 2005


A paper prepared by an independent Working Group for the Prime Minister’s Science, Engineering and Innovation Council (PMSEIC). Its views are those of the Group, not necessarily those of the Australian Government.


Contents

EXECUTIVE SUMMARY .................................................................................................................4


I. INTRODUCTION – A CULTURE OF CREATIVITY .........................................................................5


II. PMSEIC WORKING GROUP ON ‘THE ROLE OF CREATIVITY IN THE INNOVATION ECONOMY’ ................6


III. CREATIVE INDUSTRIES DEFINITION ............................................................................................7


IV. ECONOMIC DEVELOPMENT, HUMAN CAPITAL AND INNOVATION ......................................................8

Global competition ...................................................................................................8

Australia’s innovation policies need to evolve .........................................................9

Creativity and innovation in services .......................................................................9

Creativity is a broad stimulant to innovation ..........................................................10

A competitive system needs a good mix of human capital ....................................10

Commercialisation .................................................................................................10


V. SCIENCE, CREATIVITY AND GLOBAL INNOVATION POLICY TRENDS ............................................11

Why should Australia change its innovation policy? ..............................................11

Creativity is not confined to a narrow sector of Australian society .........................11

Creativity can produce innovative outcomes .........................................................12

Creativity is vital to economic growth .....................................................................12

The importance of a comprehensive Australian strategy for creative innovation ...14


VI. GLOBAL TRENDS IN R&D AND EDUCATION ...............................................................................14

Design as a method for R&D and commercialisation .............................................15

Case study: Diversionary Therapy for Burns Pain Management in Children …......16

VI. GLOBAL TRENDS IN R&D AND EDUCATION CONT.

Creativity across the education spectrum .............................................................18

Skill shortages ......................................................................................................18 Venture capital, risk and commercialisation ..........................................................19


VII. OVERCOMING IMPEDIMENTS TO THE COMMERCIALISATION OF CREATIVITY .........................................20

Impediments to investment ...................................................................................20 Impediments to design innovation .........................................................................20 Impediments to collaboration .................................................................................21

What other countries are doing ..............................................................................22

How other countries are funding creativity initiatives .............................................23


VIII. SOLUTIONS – WORKING GROUP RECOMMENDATIONS TO GOVERNMENT .......................................23

Whole-of-government creative innovation policies .................................................23 Promotion of cross-disciplinary and cross-sectoral education ................................24

An Australian Creative Innovation Fund ................................................................24 Investment and training incentives .........................................................................24 Imagine Net – closing gaps, building mass, and driving growth .............................25 National innovation labs ..........................................................................................26


SUMMARY OF RECOMMENDATIONS ..................................................................................................26


APPENDICES

Terms of reference .................................................................................................28 Working Group .......................................................................................................29

List of written submissions ......................................................................................31 Bibliography ............................................................................................................33


Executive Summary


The Imagine Australia report provides recommendations for leveraging the intellectual and creative wealth of our nation. We imagine Australia as a creative society, where pride in our ideas and ingenuity produce outcomes in science and technology as well as in design, creativity and innovation. Global trends show that designers and creative artists construct knowledge for innovation in ways that are different from the creative efforts in science and technology. These differences are becoming more vital to economic growth in their own right, but they also add value to existing science and technology innovation.


To be globally competitive, Australia needs to formulate a comprehensive approach to fostering creativity.


Essentially, this means that we need to implement the political, economic, social and technological infrastructure that facilitates relationships amongst creative industries sectors and between creative industries and other sectors.


Such implementation is vital because the methods and processes employed by designers and creative artists will get innovators closer to end-users in markets.

These methods must be positioned to augment the existing creative approaches employed by science and technology for research and innovation. This is equally vital because a critical mass of creative people working together as well as within other sectors will also produce more global business for Australia. To address these issues this report recommends that PMSEIC should consider how to:


  • Enhance innovation policy by the inclusion of design, creativity and creative industries;

  • Review existing government programs for research and innovation to ensure that design and creative processes are not excluded;

  • Facilitate a critical mass of activity through the Creative Innovation Fund; and

  • Facilitate greater cross-disciplinary and cross-sectoral research collaborations between SET and HASS sectors.



Introduction – A culture of Creativity


What the arts, social sciences and humanities call creativity, science and technology calls invention or discovery.


Creativity, like inventiveness, is a fundamental curiosity. It’s our imaginative capacity to generate new ideas, images and ways of thinking; new patterns of behaviour; new combinations of action. It is an innate and universal human trait. Every sphere of human thought and activity can be creative, though some people are by education, training or natural attribute more creative than others.


Like scientific invention and discovery, creativity only becomes economic innovation when it is applied systematically within business to generate new products, services or processes for the purpose of commercial benefit.


We are in a highly competitive environment with many countries endeavouring to enhance their economic performance by improving their innovation systems. Australia’s ability to sustain and improve economic performance and well-being will significantly depend on improving our innovation and creativity.


For decades we have worked to build new skills and technologies that would drive commercialisation, and we’ve made many gains in that direction. But already the goalposts have shifted and they will continue to do so.


These days, globalisation means that many of the skills and services at the heart of business competitiveness are being outsourced to regions with low costs and large pools of technical expertise. To be competitive we need to find smarter ways of conducting business and of building knowledge for business. We have to move from our current position of relying on ‘commodity’ knowledge production to a point where we are constantly innovating on the basis of creative ideas.


If we are to compete and excel in the global economy of the future we must move now to build a more innovative economy that recognises the key importance of creativity and design.


China has fast become the world’s manufacturing workshop (McKinsey 2005). Further, China recognises that it needs strategic design to future-proof its mammoth manufacturing sector.


The burgeoning manufacturing economies of our Asian neighbours such as China, Korea, and India could also open new markets for smart forms of innovation centred on creativity and design.


The OECD’s most energetic governments, including Australia, have begun to deploy a variety of strategic initiatives to foster innovation that incorporates culture, creativity and design. Most have introduced policies to harvest the innovative capacity of the arts, entertainment and creative sectors of their economies.


Some have also developed broader innovation funds to foster new programs and initiatives for innovation. With these funds, they have established cross-disciplinary research labs, rewarded cross-sector R&D collaborations and partnerships, built ICT infrastructures, introduced skills training programs and offered new incentives for commercialisation and investment.


Several countries have also undertaken far-reaching educational reviews and policy reforms – from primary to tertiary level – aimed at generating balanced curricula and removing impediments to the development of a creative and innovative society, culture and workforce.


Australia is poised to take policy action that is every bit as visionary as that of our counterparts in Britain, Canada, New Zealand, Korea, Hong Kong, Singapore and Taiwan. We believe that a systematic investment in creativity would enable us to:


• enhance our ability to commercialise and make social use of our scientific, technological and creative ideas;

  • contribute to our political, technological, environmental, health and social priorities;

  • build on the economic importance of creative industries and service sectors;

  • extend work patterns to account for an ageing society;

  • foster a greater public awareness of the importance of scientific and technological change;

  • invest in long term benefits of cross-disciplinary educational activity;

  • make more efficient use of our material resources and human capital; and

  • capitalise on forms of knowledge that meet modern consumer demands for functional and attractive goods and services.


We know that this is no easy task. While we’ve identified that Australia needs to enhance its creative economy and culture, we need to look closely at why and how creativity will help us to vitalise our innovation economy. In particular, we need to examine the gaps and impediments that must be overcome.


  • Given our distances, dispersal and small numbers, how can such vital moments of invention and creativity be fostered?

  • How can design be highly valued within the innovation process?

  • How can innovation and entrepreneurship be linked? How do we improve on our poor record of commercialising good ideas?

  • How do we awaken potential investors and the public at large to the substantial economic benefits that can accrue from investment in design and creativity?

  • How do we foster a national culture of creativity that defines innovation as a national priority?

  • How will we master distance to build effective social networks and collaboration technologies?

  • How will we support social networking for creative endeavours?


Both new challenges and new opportunities are at hand. As a people we need to meet this situation through a strategic intervention that builds a culture of innovation and creativity. We must translate our ingenuity and our imagination into an identity and policy that will help sustain and increase long-term economic benefit to Australia.


PMSEIC Working Group on – ‘The Role of Creativity in The Innovation Economy’


Our Working Group was aware of the complexity and challenge involved in trying to realise a successful innovation policy under current and future conditions of global change. Here we present suggestions based on our knowledge of the key areas that governments and thinkers are grappling with all over the world. We believe that our recommendations will give a sharp impetus to innovation and begin a process of policy-making that others with greater expertise and resources can elaborate.


Submissions to the Working Group as well as research undertaken by Working Group members confirmed the wealth of opportunities available to Australia if the right stimulus was given.


The Working Group decided to recommend a broad policy framework that supports creativity and harnesses it for innovation to achieve an important array of potential economic and social gains.


Support for these and related suggestions is contained through this report. However, this report is far from a final set of arguments and recommendations. Globally, governments and thinkers are grappling with the economics of creativity and creative industries.

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