This speech was delivered by BCA President Catherine Livingstone at the Science Meets Parliament Gala Dinner on 24 March 2015

Check against delivery

Introduction

Thank you Adam.

Minister For Industry, the Hon Ian Macfarlane

The leader of the opposition, the Hon Bill Shorten

Other members of the federal parliament

Members of our scientific community

Ladies and gentlemen.

The knowledge infrastructure imperative

Tonight I would like to talk about infrastructure: not roads and bridges, but knowledge infrastructure.

Knowledge infrastructure is an increasingly critical component of the innovation system on which the next decade of economic growth in Australia is predicated.

The returns to labour and fixed capital will not be enough to generate the level of wealth required for reinvestment in our societal well-being. The recent Intergenerational Report reinforced what the stakes are here.

We must now focus on the returns to knowledge.

While the link between knowledge and economic prosperity may not be unequivocal, the counterfactual certainly is.

So what is knowledge infrastructure – it’s the research facilities, the institutions, the museums,  the people, and the actual stocks of knowledge Australia holds through those institutions and those people.

As with roads and bridges, if we don’t continually reinvest in all aspects of knowledge infrastructure - its capability erodes.

In fact, knowledge infrastructure is more sensitive to reinvestment because the rate of change and emergence of new knowledge is so rapid and so fundamental to the maintenance of competitiveness.

2G technology is still technically feasible, but if you're not working with 4G technology you are at a disadvantage.

Forces of change

We all recognise that Australia is facing a confluence of major forces of change, including:

•    Global competition.
- 70 per cent of global trade is now in intermediate products and capital goods rather than final products. To compete, Australia has to find its niche in those global supply chains. 

•    Then there is demographic change and the impact on jobs
- We need to recognise that the market for labour is global and jobs are becoming as internationally tradeable as products themselves. A startling 40% of all jobs in the US are considered to be freelance.

•    A third force is digital technology and its displacement, not just of lower skilled jobs, but increasingly middle skilled jobs.
- Jason Clare last week quoted the economist Tyler Cowen, who said that, in the future, the workforce will be made up of two types of people – those who can work with intelligent machines and those who will be replaced by them.

It’s true that there has always been change: the difference today is its pace and scale.

At the WEF in Davos this year, one of the persistent themes was whether the pace of change has now reached the point where it exceeds our ability to adapt.

The serious question was being asked, will machines be better decision makers than humans.

There were many examples quoted where they already are: machines can learn, and ironically they learn better when in groups.

This is called ensemble learning, made possible by pervasive cloud computing capability.

In this context, the quality of our knowledge infrastructure will determine the rate at which we can adapt. In fact, it will determine whether we can adapt at all.

Of course, the research community, including universities, also needs to hear the message from the Intergenerational Report and accept that public funding constraints are inevitable.

We will need to do more with less.

This is where the world of science meets this world – the world of our elected representatives.

The role of government

The structure of Australia’s economy, and its reliance on publicly funded R&D, means that the role of government is central to the quality of our knowledge infrastructure.

While time does not allow a full discussion of this role, I do want to make specific comment on two elements: funding policies, and education policies.

Research funding policies

First to funding policies.

Let me say at the outset that improving knowledge infrastructure does not, in the first instance, necessarily require an increased rate of spend.

There is a view that the incentive structure for publically funded research in Australia has resulted in too great a weighting to investigator led research, resulting in disparate knowledge creation, not necessarily aligned with adequately maintaining the critical mass of Australia’s strategic stocks of knowledge.

The Research Priorities Initiative currently being led by the Chief Scientist will facilitate this imbalance being addressed.

The cautionary note here, which the Chief scientist has highlighted, is that we went through a similar exercise just over 10 years ago – but the resultant fragmentation and dilution of impact means that we are having to revisit the initiative, with not dissimilar priorities being identified. In business this is called the cost of churn.

In terms of institutional knowledge infrastructure, the BCA also welcomes the government’s decision to follow through with the 12 month extension of funding to NCRIS. However, this doesn’t provide the long term funding certainty required. NICTA finds itself in a similar situation.

Both the accountability for, and the quality of, research outcomes are compromised by stop-start and short term funding policies. This includes the cessation, restarting and rebadging of programs every time there is a change of government: the last 20 years has seen far too much of this. More cost of churn.

Improving the alignment between funding arrangements and research time frames would increase the likelihood that we can attract and retain those bright and talented people who are such a vital part of our knowledge infrastructure.

At the risk of over characterising the issue here, there  is a disconnect between the research sector, which assumes that policy makers, and the community, accept the fundamental proposition that research and knowledge creation are virtuous activities; and the funding arms who see R&D as a discretionary cost which can be varied on an annual basis.

If I am being unfair, it is to both sides of the argument. There is a middle ground.

The research sector, and the business community, must find a way of reframing our  advocacy arguments to focus more specifically on the benefit of the outcomes from having a vibrant knowledge infrastructure; and policy makers have a responsibility to be, if not fully informed, at least better informed, and not rely on ideology and anecdote. Rather, rely on the best evidence.

Education and skills

Turning to education policy – and the issue of digital disruption and the implications for the building of knowledge infrastructure: just as you can’t build physical infrastructure without civil and structural engineers, you cannot build knowledge infrastructure without software engineers and data scientists.

And this now applies to every field of research. As they say in Silicon Valley, software is eating the world.

So why do we continue to have the same conversation on the importance of STEM in primary schools, on which we all agree, but still not enough progress is made.

Will Australia ever have the required number and quality of IT graduates when the pattern needs to be set in years 1-3 at school?

This is the stage at which we should be introducing digital technology skills such as computational thinking, problem solving, design thinking, and computer coding.

But our recent review of the primary curriculum concluded that this digital technology stream does not warrant separate recognition in the curriculum.

Meanwhile, other countries are gaining the advantage: in Europe, the UK, Estonia and Greece have already integrated computer coding in the primary curriculum, with Poland, Lithuania, Finland, the Netherlands, Flemish Belgium and Spain planning to do the same. In the US, 20,000 school teachers are being trained in computer coding instruction.

If the market for labour is global, then we are effectively dealing generations of children out of their individual ability to participate in the digital economy, never mind the consequences for our national ability to maintain and build our knowledge infrastructure.

This situation is so serious that individual schools and businesses are trying to do what they can, albeit in a limited way. One such initiative is Code Club Australia, which is actually running a session at lunchtime tomorrow here in Parliament House, as part of Science meets Parliament. I encourage as many parliamentarians as possible to join in that session.

I understand numbers at this event are limited, given that it is a hands on training opportunity, but there are just a few more spots if you’re keen (Tim Watts MP is host).

Recalling the adage, I Hear and I Forget, I See and I Remember, I Do and I Understand.

You may forget most, if not all, of what I have said this evening, but if you engage with Code Club in action, tomorrow you will understand the importance of giving these skills to our young generations – and I promise you’ll have some fun at the same time.

Thank you.