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New Era, Next Chapter

On Strengthening The Ecosystem of Innovation Between Australia and Korea

· Korea Roundtable

A short discussion paper to explore a need to better define innovation policy in the relationship between Australia and Korea.

Introduction

Call for greater collaboration and increased commercialisation. This is the headline message from 5 October 2016 delivered by Bill Ferris AC, Chair of Innovation and Science Australia. While he was specifically addressing the need for greater collaboration between Australian businesses and our publicly funded research institutions, it is a sentiment that should be broadcast more widely in Australia’s global outlook.

The five Landing Pads which the Australian government is now rolling out are part of this equation, but can’t be delivered everywhere. The reality is that piloting a new idea with limited resources means that not everywhere can be included in the first iteration of this initiative. One place that is not included in the roll out of Landing Pads is Korea. Rather than being a reason for disappointment, it opens the question of why must the responsibility to achieve the global innovation strategy rest only with the government.

Government is a partner and not necessarily the driver for good innovation and entrepreneurial culture. Government provides an essential catalyst to give confidence to smaller initiatives, but it is often the hard work and brilliance of people outside of government who create the preconditions for a workable ecosystem of innovation to flourish.

We are at the opening of a New Era, Next Chapter in the relationship between Australia and Korea. It is a time full of hopeful promise, following the recent ratification of the KAFTA. Given the dynamic nature of the global economy, along with the competition that will be found from other countries, a window of opportunity is open and must be seized through hard work hard and greater collaboration.

The Turnbull Government was recently returned at the polls in Australia, adding a fresh impetus to the Ideas Boom policy. A new Korean Ambassador arrived recently in Canberra who has enjoyed an opportunity to get a better understanding of Australia. Soon, the new Australian Ambassador will arrive in Seoul.

Purpose

This white paper examines what might be necessary to strengthen the ecosystem of innovation between Australia and Korea. This paper is written from an Australian perspective, and reflects the opinions of the author.

Where Are We Now?

It is easy to stand back and criticise things that are not right with the relationship between Australia and Korea, but how useful is only focusing on weaknesses in helping to find a way forward? Similarly, it is inviting to focus on only the successes without taking into consideration the very real challenges faced in strengthening this ecosystem of innovation. To bring this conversation to a more meaningful outcome, it is necessary to recognise both the weaknesses and strengths with a vision of what opportunity might provide for the future.

In his memoir “Engagement” published in 2000 on foreign affairs and Australia’s place in the world, former Prime Minister Paul Keating wrote about how Australia’s relationship with Korea emerged with people taking it for granted and failing to appreciate how important it had become. Even today, it is arguably fair to say that Korea stands at a poor third in the mind of Australian’s when reflecting on what is defined by ‘Asia’. 

There is a long history of connection between Australia and Korea, which has been fortified through the sacrifice of many during the Korean War, but often the reality is that this narrative is incomplete and overlooked. We define broad brush strokes of what defines the seeds of friendship, but often neglect the detail and thus lose many rich lessons in what makes this relationship unique.

The public tribute given to the veterans of the Korean War is fitting and warranted, but often masks the reality of how Australia cares for our veterans. The government’s efforts are often regarded with equal measure of criticism and praise by veterans. There is more that could be done. The point being that if we are going to lean on this reputation for talking up a culture of innovation and economic diplomacy, then we should make sure we are doing so with due respect to those people involved. 

Current discussions about the KAFTA too often focus on today’s markets, but if the introduction of the iPhone not even 10 years ago has shown us anything, technology will disrupt and change markets more than we can imagine in the decade to follow. We must both continue to respond to the immediate needs of today while also being nimble so as to seize the opportunities which are yet to be realised.

Historically, there is an untold story of innovation in how the friendship between Australia and Korea was forged. An example of this is the care for the needs of disadvantaged women in one of the most conservative areas of Korea at the end of the 19th century - Busan. A women’s orphanage was established by Australians that would later become the first girl’s school in Busan, established in 1895. The legacy of this action continues to shine brightly today. It is worth noting that the establishment of this school in Korea by Australians was seven years before Australia would approve the right of women to vote. If we could be progressive in the past in how we engaged with Korea, then it stands we can do this again with technology and innovation. 

The present situation demands us to embrace an entrepreneurial imperative across all areas of business. We cannot afford to be complacent.

Human Capital

At the heart of innovation is a question of productivity grounded in the dynamic of human capital. Technology, education, infrastructure and institutional frameworks are all important enablers, but these only work because of the human capital which we can leverage. 

“The alchemy of innovation occurs closest to the customer” is a saying which the author holds to be true. The closer we can bring connections to enhance human capital between Australia and Korea, the likelihood is that we can strengthen a culture of innovation.

It is important that this culture of innovation be grown at the ecosystem level. This is taking a broader view than specific opportunities which might be developed by individuals or discrete initiatives. We need an approach to innovation that embraces both the strategic level of the ecosystem as well as the tactical response by individuals and initiatives.

Ecosystem

Often, discussion about business between Australia and Korea is framed around the role of large business because of the emphasis this has traditionally made on the market.

Considering that approximately more than 90% of the business exchange between Australia and Korea occurs across only four commodities, those being gas, coal, beef and iron, it would seem to be apparent that there is considerable opportunity which we are failing to address. This is of particular concern in light of the tendency by both Australia and Korea to champion our own respect capacity for innovation. The evidence does not match our own rhetoric.

While there are fresh stories of small business engaging with Korea particularly in areas of food production, there is an enormous opportunity being neglected in how this relationship can more readily encourage and embrace the participation from small business and the startup economy alike, while continuing to foster a strong trade relationship from large business.

It needs to be noted that small business are not just smaller version of large business, and the startup economy is not just a subset of small business. All of these contribute to a vibrant ecosystem. All have a role to play. All are important along with the support and leadership from government and educational facilities. Connecting these threads together is to some degree at the heart of developing a stronger ecosystem of innovation.

When examining the ecosystem, the question of funding needs to be addressed, but this shouldn’t be the driver to the ecosystem itself. Funding is critical, but it is of more importance to understand how funding is an enabler to support increased participation in the the ecosystem. The same is true for the participation and support from institutional support. Many educational facilities are developing excellent frameworks for supporting an ecosystem of innovation, but these remain part of the equation and not the driver on its own. The ecosystem is bigger than signature initiatives provided from any one specific leading institution.

A systems thinking or network approach to strengthening an ecosystem must embrace a granular perspective with a fine-grained approach to growth which is essential to making the right choices about where to compete. By doing so, this will help to make sense of so-called "growth industries".

A vision

Developing a vision for what this ecosystem ought to be is essential as a start point, and should draw upon existing policy and initiatives that might support a culture of excellence.

Some guiding principles

Without being specific as to what this ecosystem of innovation should look like, consider these principles as important to observe in setting the right direction. 

  • Place creativity at the heart of innovation.
  • Enable an extremely fast knowledge transfer.
  • Get the right people involved.
  • Get your hands dirty. 
  • Give ample support to valuable ideas. 
  • Cultivate the network. 
  • Educate others.

Observations

During the capstone event of the Australia Korea calendar help in Seoul recently, the Australia Korea Business Council Forum, there was an attempt to come to terms with the changing nature of business, and the influence of innovation.

Kwon spoke to illuminate this issue, but by and large the conference fell short of painting what was required. It is entrenched in the status quo, and lacks an ability to grasp the future.

While topics of FinTech, Smart Cities and Renewable Energy were being discussed with barely scratching the surface on current trends, Charles Schwab was in Seoul discussing wide ranging ideas of the Fourth Industrial Estate.

Current organisation of the Australia Korea business ecosystem is sound for the support and promotion of the majors of large business, but fails to address emerging trends in any way that is satisfactory. Australia is lagging behind, and things must change.

Discussion

This paper is a start point for ongoing discussion. This is by far the first commentary written about this subject, and hopefully stimulates further conversation that leads towards action with impact.

Consider this the framing of a playbook for innovation, rather than a blueprint for replication.

Everyone has some level of experience and an opinion. It is important everyone participates. We need to find those areas which there is heated agreement as much as at times uncomfortable disagreement. In all things, consider the importance of a stronger ecosystem of innovation between Australia and Korea as key.

Please add your thoughts below, or contact the author Matt Jones at matt.jones@socialalchemy.com.au.

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