The New South Wales Innovation and Productivity Scorecard identifies the role of research innovation in boosting productivity and economic growth. While the Scorecard ranks New South Wales highly in the area of innovation and productivity performance against both similar and world leading economies, it also identifies areas for improvement.
The New South Wales Innovation and Productivity Scorecard was released on 16 August 2018 by the New South Wales Innovation and Productivity Council (IPC), an independent entity established in 1996 to advise the New South Wales Government on priorities for innovation-led economic development and productivity.
A key aim for the IPC is to support innovation in business, government, and the education and research sectors in order to stimulate productivity for the broader New South Wales economy. The Scorecard is the first in a new Innovation Economy research series to guide policy direction and program development.
How do we fare?
New South Wales scores well on many fronts including by having strong research sector, an active startup sector, a highly qualified workforce and a thriving economy.
The State was a leader on economic growth in 2015-16, ranking second out of 10 locations on GDP growth, beating Victoria and Queensland and the national economies of the USA, UK, Canada, Singapore and Germany and the OECD average.
New South Wales ranks third for both business growth and labour productivity, above the Australian and OECD averages, and fourth for business investment in R&D.
New South Wales also has the highest number of startups in Australia and third highest internationally.
The Scorecard compares New South Wales’ performance in three areas: research and collaboration; skills and enterprise; and growth and productivity.
Research and Collaboration
- New South Wales has high business investment in R&D at $6.4 billion with three quarters spent by the manufacturing, science and technical, IT and finance sectors.
- The State outperforms the international average for higher education investment in R&D at $3.2 billion which has been growing at 7.7 per cent per annum between 2008 and 2014.
- 13 per cent of New South Wales researchers are among the world’s top 10 in their specialities as ranked by the League of Scholars.
- New South Wales has three of its 11 universities in the top 200 in the QS World University Rankings 2016. Its universities are global research leaders in over 50 topics including photovoltaics, water filtration, network security and cryptography.
- New South Wales universities lead the nation with 83.8 research collaborations per institute, compared to an average of 59.8 for Australia.
Skills and Enterprise
- New South Wales’ workforce is highly educated and we attract the highest rate of skilled work visas compared to other states.
- New South Wales is home to the largest proportion of Australian startup founders as well as startups that grew out of research institutions and universities.
- New South Wales business performance is above average (ranked fifth) on digital capability with 16,100 businesses using growth technologies, but there is still room to improve.
- New South Wales outperforms other Australian states on venture capital investment and number of firms but are behind international jurisdictions (ranked seventh).
- New South Wales businesses are becoming more successful in attracting venture capital from overseas with 50 in the past decade attracting investment from top technology venture capital funds.
Growth and Productivity
- New South Wales has the second highest GDP growth rates at 3.9 per cent in 2016.
- Singapore and the United States hold the top positions on labour productivity, but NSW ranks third and above the Australian and OECD average over the five years to 2017.
- New South Wales is ranked third internationally on number of firms growing employees by more than 10 per cent per annum in the past two years.
- Within Australia, New South Wales had the greatest increase in net business creation over three years, with more businesses starting up than exiting the market.
- Multi-factor business productivity (measuring labour and capital) grew 4.7 per cent in New South Wales between 2007-08 and 2015-16 while the Australian average contracted 2.1 per cent.
Where do we need to improve?
Areas for improvement identified in The Scorecard include efforts to grow and create highly skilled jobs and investments in the latest technology.
Industry collaboration with research organisations and universities is another area where New South Wales and Australia lag against international benchmarks.
So how can New South Wales improve this metric on industry-research collaboration and boost annual productivity growth? Inspiring Australia (NSW) posed this question during a Commercialising Research Forum held as part of the 2017 Spark Festival.
Researchers, startup companies and investors discussed opportunities and explored the challenges commercialisation poses to research scientists. Forum participants considered what it would take to improve the relationships between research institutes, universities and business and what needs to change. Issues of culture change, willingness to share and business know how were raised as barriers to progress.
Novel solutions for change included industry placements as mandatory elements of a PhD, commercialisation units of study offered at undergraduate level and more opportunities for researchers to meet business representatives throughout their time at university.
Programs designed to boost productivity
Recent policy measures designed to improve New South Wales’ innovation and productivity performance include the establishment of Jobs for NSW, the Sydney Startup Hub, the Sydney School of Entrepreneurship and the Boosting Business Innovation Program designed to facilitate increased research-industry collaboration.
Attend future research briefings
The next report in the IPC’s research series – NSW Innovation Precincts: Lessons from international experience will be launched at a breakfast event from 8.00am – 10.00am on Thursday 13 September.