Why Australia needs long-horizon innovation

Artificial Intelligence. mRNA vaccines. Advanced robotics. Many of these innovations are woven into our everyday lives today, but only a few decades ago they might have seemed the stuff of science fiction to all but those deeply involved in developing the technologies.

What began as curly questions grew into research projects and then gradually morphed into applications with commercial concepts and finally businesses, but the pathway to commercialisation and widespread adoption was rarely linear.

Without sustained investment and support, over years and sometimes decades, many would never have progressed beyond the laboratory. And the world-changing technologies, therapies, and capabilities they spawned would have remained a note in a research diary.

Our lives – and the health and wealth of our nation – would be poorer. This blog looks into why this kind of long-horizon innovation is so important, and the opportunities for Australia if it’s well supported.

What is long-horizon innovation?

Long-horizon innovation is research and development where the journey from discovery to real-world impact takes years or even decades. The term has its roots in the Three Horizons Model proposed by consulting firm McKinsey, which categorised innovation into three types:

• Horizon 1: generally short-term projects that generate results in 1–3 years
• Horizon 2: projects that usually take 2–5 years, that typically have been copied from adjacent markets then applied to a new context
• Horizon 3 (long-horizon innovation): long-term innovation projects that generally produce results in 5–12 years.

Long-horizon innovation is often associated with ideas that are disruptive, radical, or that completely overhaul the architecture of a system or process. It is often the research that can fundamentally change how we live and understand the world. ^[1] Long-horizon innovation is distinct from shorter-term innovation – Horizon 1 or 2 under the McKinsey definition – which is focused on making incremental improvements, enhancing products, or achieving commercial outcomes in the near- to mid-term.

Unlike shorter-term innovation projects, long-horizon innovation is often characterised by deep technical complexity, high levels of ambiguity, and significant risk. Development pathways are rarely linear, commercial outcomes may be uncertain, and returns on investment are often delayed for many years. Progress depends on sustained, patient investment and a willingness to pursue opportunities whose full potential may not yet be clear. When these projects succeed, however, they can generate outsized returns, establish entirely new industries, and create lasting economic and societal value.

Discoveries in biotech, medtech, quantum computing, advanced materials, clean energy, artificial intelligence (AI), and space technologies often fall into the category of long-horizon innovation. They were not overnight inventions and required sustained support to become commercially viable. Australia’s deep-tech incubator Cicada Innovations points out, “Critical technology development takes time. It takes years of relentless research and development, complex science and engineering, and the right funding and support before it comes to market.”  ^[2]

AusBiotech CEO Rebekah Cassidy notes that bringing new health technologies to market routinely takes well beyond a decade. She says companies must “bridge multiple commercial ‘valleys of death’ as they spin out of research into pre-clinical development, clinical trials, regulatory approval, and manufacturing scale-up before revenue generation through market access is even possible.” ^[3]

For example, research on what is now the Cochlear implant – an Australian invention – began in Melbourne in 1967. It took Professor Graeme Clark more than a decade of scientific collaboration before the first device was ready to be implanted in 1978 and another 4 years before the Cochlear implant was commercialised in 1982. Cochlear is now the world-leader in implantable hearing aids and holds 60% of the global implant market.

Long-horizon innovation is rarely straightforward

Long-horizon innovation rarely follows a straight path from discovery to impact.

Many of the technologies we now take for granted began as exploratory, long-horizon research programs long before their commercial potential was fully understood. Some started as discoveries in one field that were then applied to innovations in another.

For example, the CSIRO’s research into radioastronomy – reducing interference on the long-range radio telescopes used to study black holes – resulted in the invention of the wireless local area network (WLAN), which led to modern wi-fi. ^[4]  Nobel Prize winner Professor Brian Schmidt AO says long-horizon research in the field of astronomy has contributed to many technologies we now use every day, such as the internet, GPS, and touchscreen phones. ^[5]

Sometimes it’s even the ‘failures’ that turn into the greatest opportunities. While the original hypothesis may not be proven, or a technology might not work for its intended use, the researchers may still discover a new technology or process that has value elsewhere.

A good example is the molecular clamp technology developed at The University of Queensland (UQ). Originally conceived as a platform that could help scientists rapidly develop vaccines for pandemic viruses, the technology attracted global attention during the COVID-19 pandemic. Although it was used in a promising COVID vaccine candidate, UQ discontinued the trial after participants returned false-positive HIV test results. However, instead of that being the end of the story, UQ researchers continued to refine the underlying technology and explore its broader applications. In 2025, UQ spinout Vicebio secured a groundbreaking deal with global pharmaceutical company Sanofi worth up to AU$1.6 billion to develop next-generation respiratory virus vaccines based on the gene clamp platform.

This journey from university research project to global commercial partnership took years, involved setbacks, and at several points could easily have gone nowhere. Instead, the underlying technology found a different pathway to market. It’s a reminder that in long-horizon research, the value doesn’t always show up where, or when, you expect it to.

Why long-horizon research matters

Investing in research strengthens a nation’s economic security by building productive industries, creating high-value, well-paid jobs, and improving living standards. It also helps nations respond to challenges such as climate change, public health threats, and broader social and economic issues.

Long-horizon innovation is also crucial for building sovereign capabilities. As geopolitical tensions and supply chain disruptions have highlighted in recent years, access to critical technologies cannot be taken for granted. Investing in areas such as semiconductors, advanced manufacturing, quantum, biotechnology, space technologies, and clean energy helps Australia build the expertise, intellectual property, and industrial capacity needed to support economic resilience, national security, and future prosperity. Rather than relying on vulnerable international supply chains, long-horizon innovation gives Australia greater control over strategically important technologies.

It provides the fundamental basis from which new ideas and solutions can spring. For Professor Schmidt, “The exciting part of research is not incremental. It’s revolutionary. We need entrepreneurs to take new ideas and work on the good stuff. But we also need to have a sea of ideas that is continually replenished from which the innovators can fish for the next big thing.”

That’s why long-horizon innovation matters. It creates the ideas future industries are built on, helps solve problems that don’t have obvious answers, strengthens sovereign capability, and gives Australia a chance to shape the future rather than simply importing it.

Creating new industries

The challenges facing the world today – climate change, food insecurity, geopolitical uncertainty – are going to require blue sky solutions. Entirely new industries may need to be developed to address these challenges, requiring new supply chains, skillsets, and even new business models.

AI is a perfect example of this. Once the domain of sci-fi novels, AI is now embedded in almost every aspect of daily life, with the majority of new startup businesses in Australia either AI or AI-enabled. ^[6] Massive data centres are springing up to power AI, university courses are teaching the next generation how to master it, and advances in semiconductor technology are providing the computing power that makes modern AI possible.

Many of Australia’s most innovative businesses can be traced back to long-term investments in research and technology development, often beginning with fundamental research long before the idea was known to have a clear commercial application. For example, the semi-conductor manufacturer BluGlass began as a Macquarie University spinout focussed on inventing semiconductors for green technology such as LEDs and solar cells, and has now evolved into a major supplier of advanced laser technologies for sovereign defence and quantum applications.

Long-horizon innovation is fundamental to industries built around medical technologies, quantum computing, advanced manufacturing, climate tech, agricultural genetics, and AI.

Solving problems that matter

Long-horizon innovation plays an important role in helping Australia respond to challenges ranging from climate change and public health to broader social and economic issues. ^[7]

Cicada Innovations points out that the long-horizon innovation being done by deep-tech businesses is solving these problems of the future, tackling “fundamental scientific and technical challenges, with far-reaching implications for the world we live in”.

There are signs this work is accelerating. More than 80% of startups applying to the Cicada x Tech23 program in 2024 were founded in the last 5 years, suggesting a growing pipeline of deep-tech companies developing solutions to major scientific and technical challenges. ^[8]

Not every breakthrough creates a billion-dollar company. Some help farmers grow more food with fewer inputs. Others improve health outcomes or make critical infrastructure more resilient. The point is that the benefits often spill well beyond the balance sheet, improving health, securing food supply, increasing climate resilience, or boosting national defence systems.

Creating long-term economic advantage

Long-horizon innovation can also strengthen Australia’s long-term economic competitiveness.

Novel innovation, or “new to the world” innovation is an important driver of economic performance. ^[9] Economic data shows a clear link between higher innovation novelty and productivity: more innovative research results in about 1.6 times higher labour productivity when compared with businesses introducing incremental innovations, and 1.7 times higher than those not innovating. ^[10]

While not all novel innovations emerge from long-horizon research, many of the most transformative technologies do. Developing entirely new products, industries, and capabilities often requires sustained investment over many years before commercial benefits are realised. Many of these innovations do more than create commercial opportunities. They help build sovereign capabilities, strengthen supply chains, and develop expertise in strategically important industries. ^[11]

Long-horizon innovation also helps keep capability onshore. It attracts and retains talented people, creates specialist industries, and supports the growth of local supply chains. It gives Australia a chance to build technologies here, rather than simply buying them from somewhere else. That’s important economically, and it’s also important strategically in a world where access to critical technologies cannot always be taken for granted.

While the benefits may take years to materialise, countries that consistently invest in long-horizon innovation are often better placed to capture the economic opportunities created by future technological change.

Australia’s opportunity

Australian research accounts for 3.5% of the world’s publications and is cited 42.2% more frequently than the global average. Australian researchers perform particularly strongly in fields such as biomedical and clinical sciences, information and computing sciences, and the physical sciences. ^[12]

The nation also has a proven track record of turning long-horizon research into globally significant industries and companies. Businesses such as Cochlear, ResMed, and CSL have transformed millions of lives and become global leaders in their respective fields. Yet, these companies had very long innovation timelines that made them “thirty-year overnight successes”, built on decades of research, development, commercialisation, and persistence. ^[13]

However, these successes are too often the exception rather than the rule. Australia still struggles to translate world-class research into globally significant companies and industries. The SERD investigation’s final report, Ambitious Australia, warns Australia “risks losing its competitive edge in global discovery and eroding the foundation needed to transform innovation into enduring economic prosperity” and recommends a package of systematic changes to “make R&D a priority and enable success”.

Conclusion

It’s easy to celebrate an innovation once it’s successful. It’s much harder when it’s still sitting in a university lab, when the project is burning cash, missing milestones, and when the team is posing difficult questions that may never have clear answers.

Long-horizon innovation asks us to invest in possibilities rather than guarantees, and to recognise that today’s research may underpin industries, capabilities, and technologies that do not yet exist.

Australia has shown what is possible. But it’s impossible to predict the next Cochlear, Vicebio, or BluGlass and know how their story ends.

The important thing is to sustain the long-horizon research that underpins such success stories and enables Australia to develop world-class ideas that deliver societal and economic benefits.

 

 

In the second part of this series, we’ll look at one of the biggest challenges facing long-horizon innovation: how it is funded, and what role governments, investors, and alternative sources of capital can play in supporting the technologies and industries of the future.

 

 

[1] McKinsey (Dec 1, 2009). “Enduring Ideas: The three horizons of growth”. [online]. Available at: https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/enduring-ideas-the-three-horizons-of-growth

[2] Cicada Innovations (2025). Cicada x Tech23 2024 Insights Report – Deep Tech: Australia’s Critical Technologies. Cicada Innovations. [online] Available at: https://info.cicadainnovations.com/en-au/cicada-tech23-2024-report-0

[3] Ausbiotech (5 June, 2026). “Opposition to proposed RDTI change unites Australia’s biotech, medtech and health tech sector”. Ausbiotech. [online]. Available at: https://www.ausbiotech.org/ABT/ABT/News/Media-Releases/Opposition_to_proposed%20RDTI_change_unites_Australias_biotech_medtech_and_health_tech.aspx

[4] National Museum of Australia (accessed 1 June 2026). Wifi prototype. [webpage]. Available at: https://www.nma.gov.au/explore/collection/highlights/wi-fi-prototype

[5] National Press Club of Australia (2024). “In full: Professor Brian P. Schmidt AC & Professor Richard Holden’s Address” . National Press Club of Australia. [online]. Available at: https://www.youtube.com/watch?v=gAiuuESaH04

[6] Cut Through Venture (2026). Australian Startup Funding Report Q1, 2026. Cut Through Quarterly. [online]. Available at: https://www.cutthrough.com/insights/cut-through-quarterly-1q-2026

[7]  Australian Government, Department of Industry, Science and Resources (24 February, 2025). Strategic Examination of Research and Development: discussion Paper. Australian Government. [online]. Available at: https://consult.industry.gov.au/strategic-examination-rd-discussion-paper

[8] Cicada Innovations (2025). Cicada x Tech23 2024 Insights Report – Deep Tech: Australia’s Critical Technologies. Cicada Innovations. [online]. Available at https://info.cicadainnovations.com/en-au/cicada-tech23-2024-report-0

[9]  Australian Government, Productivity Commission (7 February, 2023). 5-year Productivity Inquiry:
Innovation for the 98%: Inquiry report – volume 5. Australian Government. [online]. Available at: https://assets.pc.gov.au/inquiries/completed/productivity/report/productivity-volume5-innovation-diffusion.pdf

[10] Majeed, O and Breunig, R (22 October, 2022). “Determinants of innovation novelty: evidence from Australian administrative data”. Economics of Information and New Technology, Volume 32. [online]. Available at: https://www.tandfonline.com/doi/abs/10.1080/10438599.2022.2132239

[11] Cicada Innovations (2025). Cicada x Tech23 2024 Insights Report – Deep Tech: Australia’s Critical Technologies. Cicada Innovations. [online]. Available at https://info.cicadainnovations.com/en-au/cicada-tech23-2024-report-0

[12] Australian Government, Department of Industry, Science and Resources (24 February, 2025). Strategic Examination of Research and Development: discussion Paper. Australian Government. [online]. Available at: https://consult.industry.gov.au/strategic-examination-rd-discussion-paper

[13] Cicada Innovations (August 2020). Report: Australia’s Deep Tech Opportunity: Insights from the Cicada Innovations Journey. Cicada Innovations. [online]. Available at: https://www.cicadainnovations.com/australias-deep-tech-opportunity