I would like to begin by acknowledging the traditional owners of this land on which stand. I pay my respects to their Elders, past and present.

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1 CEDA State of the Nation Address Jane den Hollander 25 June 2013 Each year in June CEDA hosts an annual State of the Nation conference in Canberra. State of the Nation is an intensive day-and-a-half of briefings with government and shadow ministers, public servants, commentators and industry analysts, offering an insider's view of the federal government's policies. Participants discuss issues directly with speakers and other attendees, and take part in networking opportunities. The 2013 conference was aligned with CEDA's major research project for Australia Adjusting - and focussed on key public policy areas which impact our economic growth. I would like to begin by acknowledging the traditional owners of this land on which stand. I pay my respects to their Elders, past and present. It s a great privilege to be here to talk about a question close to my heart: Innovation: the key to productivity and growth? This question and the stark irony of the recent funding cuts for our great sector of higher education I am sure is lost on no-one but it s done for now and we look forward, not back. For those of you who don t know Deakin, the University was established as a green field site in It is: Victoria's fourth university the first in regional Victoria and last week moved 12 places, up to 66 in the world ranking of universities aged under 50. Forty years on, we have 44,000 students across campuses in Melbourne, Geelong and Warrnambool and, of course, increasing numbers, over 10,000, in the Cloud. Today, Ladies and Gentlemen, we live in a flat, global, connected world. The digital economy is influencing every aspect of our lives and universities are not immune to those changes. CEDA State of the Nation June 2013 Page 1

2 We can t and won t bury our heads and hope for the best. We owe it to our students Australia s future workforce and our communities to do two things: Be aware of the challenges ahead and make our contribution in meeting them And actively find better, smarter ways of doing things. We have just heard from Dr Megan Clarke and David Miles: experts who have put the case cogently. We know innovation helps to drives productivity and growth. But is that all? What drives innovation? To be competitive in a flat world, in a connected world, we must improve our productivity and I firmly believe it is people and partnerships that are central to the holy trinity of Innovation, Productivity and Nation wealth and wellbeing. Just listen to Andrew Liveris, CEO of Dow Chemical, on his recent visit from the US. He says to improve productivity, to have a future, Australia needs to innovate and also invest in innovation. And we must do it quickly he says Australia has hit rigor mortis I agree. Today, I want to talk about the role universities can play in nurturing those people and partnerships. It goes to the importance of education looking beyond our laboratories and asking: how can we, universities, contribute to Australia adjusting to what appear to be quite frightening changes ahead of us. For me, this is not a theoretical argument. It s acutely real. In downtown Geelong, we know about these things. In the 1850s, innovation drove the wealth of the nation off the sheep s back. Today in Geelong, I only have to look out of my office window to see the reality of our shifting global economy: Ford is closing its doors Alcoa faces an uncertain future And Target has cut 260 jobs from its Geelong headquarters. It s a tough reality to witness. People s lives are being harmed. Let s take Ford as a real-time example. Three generations of Ford workers in Geelong are facing the end of an era. Many people never thought they d see the doors shut in their lifetime. There s shock and anger in Geelong 500 direct jobs to go. But that number will be around 1,600 once you add the down-stream enterprises that feed off Ford the tyre producer, the interior upholsterer, the coffee shop. CEDA State of the Nation June 2013 Page 2

3 So what does Geelong do? A region of almost 400,000 people with an expectation of a stable, secure lifestyle? The Federal Government has paid Ford an estimated total subsidy of $1 billion since 2000 including $34 million in January last year. That industry assistance did not guarantee industry survival and it certainly did not generate innovation. Jobs of the future don t just happen. And as I said in Geelong this month factories generate the coffee culture but a coffee culture has never spawned a factory. The community is relying on us for new ideas... new ways of making and working, new products. The brutal message is Ford made cars no one wanted to buy. They didn t evolve, they didn t innovate. So what s the key? Back to Andrew Liveris, who when asked last week about Ford, said: I would look at the next generation of vehicle needed because it s intellectual property rich it's IQ rich. IQ-rich. Knowledge ideas know-how. That s what Geelong has to offer and Geelong has a University that can help with this. Other regional cities are similarly blessed. Education can drive productivity and economic growth, higher wages and better living conditions. But it s also about giving people hope, because the jobs of the future are about hope. But what are those jobs? Where are those jobs? I recently saw IBIS Capital s 2013 Global e-learning Investment Review. And it contained this fact: 65% of grade-school children in America will end up in jobs that haven t been invented yet. Ten years ago, who knew what an App was? Or Twitter? Or i-phones? Or the even more sublime Instagram, which just sold for an obscene amount of money? This is the Connected Age. The breadth, depth, pace and opportunities of digital change cannot be overestimated. There are now 2.7 billion internet users world-wide 39% of the world s population. And over 24 million of them are in Australia remarkable when you consider our population of 23 million. The e-learning Investment Review could not predict the next wave of inventions. But it did say this: CEDA State of the Nation June 2013 Page 3

4 90% of the fastest growing jobs in the US require some mastery of critical knowledge, skills and technology abilities 65% of Chief Academic Officers believe online teaching is critical to long-term strategy. Digital literacy is an essential language in which we must all strive to be fluent. And most of all, it emphasised that the ease with which a university or business can incorporate innovation into its organisational DNA will be a key driver of future competitive advantage we all need to innovate ourselves first, or we risk being part of the problem. Deakin must innovate to be productive so that we can educate for the jobs of the future. Universities overseas are also navigating this challenge? Last month, I visited Imperial College, part of the University of London. They are one of the best universities in the world. They have always had good people. BUT, they also remorselessly innovative, internally and externally. What they ve done with their Digital City Exchange in the middle of London is astonishing. As you walk into their zone you are recognised and can log on not scary, very helpful. Imperial is a place with one question on its mind: What are the problems of the world at the moment? It s a flat world, we are all connected and we can all talk and share ideas effortlessly, in this case to talk to the best about what we are doing to innovate and create a new future in Geelong in the materials arena. The ideas were great, but it s what we do with ideas that matters. That s the challenge. And unsurprisingly, some of the best ideas are right here in Australia I could talk about a number of universities but I will restrict myself to the one I know best to demonstrate this point. At Deakin, we are changing the way we educate by setting a target to be Australia s premier University in driving the digital frontier. It s a bold target, but we need to aim high we need to innovate. We can t just point the finger and tell everyone else that they must change. We must change as well, and fast. That s why we are embracing cloud learning highly visual, media-rich, interactive learning wherever our students are located, whether it s on campus, online or within industry. If we don t go to the Cloud and provide education where the people are, and solve problems that are important to our communities now, we will be out of business in ten years and there will be no jobs for the future from a University such as us. And how does Australian higher education stand internationally? CEDA State of the Nation June 2013 Page 4

5 We are ranked 8th globally with 7 of our universities in the Top 100 (QS World University Rankings). We have 12 Australian Nobel Prize Laureates And we re on track to meet the post- Bradley Review of Higher Education goals at least 40% of year olds with at least a Bachelors qualification by 2025, up from 3% in But today I am asking: what MORE can we do at the grassroots level? At the community level? For example: Let s put our 12 Nobels into context London s Imperial College has 14 Laureates associated with their university; and Columbia in New York has 82. But today I am asking: what MORE can we do at the grassroots level? At the community level? For example: Let s put our 12 Nobels into context London s Imperial College has 14 Laureates associated with their university; and Columbia in New York has 82. Australia does modestly well we can and must do more. In the words of Australia s 2011 Nobel Laureate, ANU astronomer Brian Schmidt Having the world s best educated workforce will be the engine of future prosperity. That s where Australian universities come in. In his Report titled Universities, Innovation and the Competitiveness of Local Economies Professor Lester of MIT said that as local communities worry about their economic survival in our rapidly changing world; their attention was turning to universities. Why? Because universities have two of the most valuable assets in our changing economy: 1) Educated, skilled people 2) And new ideas Broadly, the MIT Report found that the contribution of local universities to local economies went far beyond the patenting and licensing of new ideas. Professor Lester said Universities have so much more to offer: We re committed to our regions for the very long term We provide opportunities for young people to study locally We re big employers and major consumers of local goods and services All true. But in my view, his most important idea was this: CEDA State of the Nation June 2013 Page 5

6 Universities can provide space for open-ended conversations about industry development pathways and new technological and market opportunities. This notion of providing space for new ideas is very important. Last year, the Deakin Campus on Geelong s waterfront hosted a forum with Universities Australia to explore how universities can help their communities address major social change. I spoke about Geelong s history as a city of innovation. The community also discussed: What was the next innovation? What was the next big idea? And how do you get the backing from industry, the community, government? The Mayor of Geelong Cr Keith Fagg put it like this on the night: Universities are places where there is a huge brains trust of expertise and knowledge... The opportunity there is for people to develop ideas that can be both creative and potentially lucrative If you get these people together, we can develop good new things. I couldn t agree more. The answer lies in getting people together creating new collaborations and new partnerships. Of course the term ivory tower was coined for good reason. We used to be only about teaching and research. But we have evolved. Universities are no longer inwardly-focused. We have learnt that it s what happens in the community that matters. To succeed, we have to be engaged. That is why Deakin is developing placed-based strategies to proactively work with our communities: At our Waurn Ponds Campus, for example, we established Victoria s first regional medical school so we had the beginnings of a smart health work force. More significantly perhaps in today s context the Geelong Technology Precinct which started small has been driving innovative research and development opportunities for University-industry partnerships since opening in 2004; From this early work we won funds for the Australian Future Fibre Research and Innovation Centre at Waurn Ponds. This is a collaboration with CSIRO and the Victorian Centre for Advanced Materials Manufacturing. Stage One was opened last year. Its aim is to focus on research into all aspects of fibre manufacturing, including carbon fibre development. This will help companies like Carbon Revolution a Victorian firm with Deakin graduates who, in partnership with us, produced the world s first one piece carbon fibre wheel. They sell wheels into the US against a strong dollar and are winning. CEDA State of the Nation June 2013 Page 6

7 We re the bait for a new carbon fibre industry, and we re doing it brilliantly. But who is the big industry who will settle in Geelong and take the innovation forward? And back to health and that medical school: We have just established a research centre for emerging infectious diseases. This is a truly collaborative project. It s a partnership with Barwon Health and the CSIRO Animal Health Laboratory on a project that will have local, state and national significance. And what lies at the heart of all of this? Research and innovation. People and partnerships. We all say we have community-industry links, but in my experience when you actually do work with an industry, it s hard because you have totally different outcomes. For universities, it s about education, writing essays, passing exams. For industry, it s about getting the job done, making a profit. Getting a partnership to work involves stamina to ensure we re all doing things in the same way. Australia needs blue-sky research, it needs problem-based discovery and above all it needs investment to enable it to happen. Australian universities are producing that research. But they could do more. To accelerate innovation in our economy, universities must and will deliver the teaching and research and the people and partnerships that will address the needs of our evolving economy and nation. In conclusion, let me leave you with this thought. I wonder what if Ford had come to Deakin ten years ago: What would Deakin have done with Ford in Geelong with a world-class engineering school if we had looked at the problem from an Australian perspective? A large country with limited scale but huge distances and high energy costs? How could we have helped nurture the people and the jobs to build small, energyefficient safe cars? That today may have dominated the markets of Europe and Asia? It s too late for Ford, but it s not too late for the Geelong community that helped make Ford great in the first place. Let s not miss that opportunity. Let s invest in people and ideas. Let s invest in innovation. Thank you. CEDA State of the Nation June 2013 Page 7

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