We’ve recently been seeing community driving innovation in Australia forward. But if we want to know what the future holds, we need to understand how innovation in Australia has been shaped previously, and how our recent innovation policies could be gamechangers. So, we’re unpacking why Australia has been knocking it out of the park on ideas, but passing the baton overseas when it comes to commercialisation. We’re also looking at what’s driving a new push to close the commercialisation gap and put sovereign capability at the heart of Australia’s innovation agenda.
Understanding innovation
What is innovation? It’s a simple question that can be tricky to answer. Fortunately, we have a handy description to help you; innovation is the process of developing or introducing a new product, service, process or method.
Commercialisation and beyond
Innovation is an absolute superpower because it lifts our knowledge to a new baseline, and it can deliver phenomenal benefits. Innovation can increase life expectancy, improve health, create economic growth, increase wages and boost productivity. And the more a country nurtures the innovation process from idea to impact and starts building disruptive new industry verticals, the more it benefits. Research by the CSIRO shows that every dollar Australia invests in R&D delivers a return of at least $3.50 to the economy.[1] In large, developed, diverse economies such as the US, the long-term return is far higher. The reason is that the entire innovation cycle (idea, impact, commercialisation and beyond) is homegrown. It creates a virtuous circle of collaboration between public and private sector investment and between basic, applied and experimental research. This not only spurs economic disruption and growth, but also fuels domestic wealth creation and investment.[2]
Innovation in Australia has an enviable track record
Innovation in Australia is consistently at the leading edge, and that’s more than just patriotic talk. Australia is the birthplace of some of the world’s most impactful innovations — Wi-Fi, Google Maps and the Cochlear implant, to name a few. We’re also home to headline-grabbing unicorns like Canva and Atlassian that have changed the way people all over the world work.
Success at every age and stage
These recent achievements are nothing new. We’ve been leaders in innovation for centuries. Take the boomerang. That invention is more than 10,000 years old and is still going strong. Indeed, every innovation era is littered with game-changing Australian innovations. The world’s first pre-paid postage stamp, the refrigerator, the electronic pacemaker, the black box flight recorder and ultrasound started in Australia.[3] [4] From ancient tools to life-saving medical devices, Australian ingenuity has thrived across every technological era — and now, as we stand at the edge of another major shift, the pace of change is accelerating.
Moore’s Law is the principle that the speed and capability of computers can be expected to double every two years, due to increases in the number of transistors a microchip can contain. It has held true since the mid-1960s and is predicted to come to an end around 2025. Now, with Moore’s Law running out of steam, artificial intelligence progressing rapidly, we’re on the cusp of a new era: the Quantum Age. And once again, Australian quantum businesses such as Quantum Brilliance, PsiQuantum and Diraq are leading the way. All this innovation should put our economy in the box seat when the quantum era arrives. Yet, history tells us otherwise.
Barriers to commercialisation
Despite our success, we also have an unenviable track record of handing over the job of commercialising innovations and building new industries to other nations. Ultimately, Australia has been missing out on the most lucrative and enduring stages of the innovation process, sidestepping the chance to diversify and modernise our economy. Time and time again, we’ve looked abroad to commercialise our ground-breaking technologies. And that’s one of the reasons why Silicon Valley isn’t in Bunbury.
Take digital diagnostics company Ellume, for example. The Queensland-based business developed a rapid home-testing kit for COVID-19 in 2020. Seeing its potential, the US Food and Drug Administration authorised Ellume’s test as the first non-prescription over-the-counter self-test in the US. Ellume went on to ink a $231.8 million agreement with the US Government to build a manufacturing facility in Maryland and deliver 8.5 million COVID-19 home tests to support the US Government’s pandemic response. However, back in Australia, Ellume’s technology remained unapproved by the Therapeutic Goods Authority and did not attract federal or state government support to expand into the US. The Australian division of the business went into voluntary administration in 2022.[5]
The big picture
The latest Global Innovation Index report reveals the structural constraints holding our nation back. On the face of it, Australia is a strong performer. We rank 23rd out of the 133 countries included in the index and place 6th out of the 17 economies in Southeast Asia, East Asia, and Oceania. But dig a little deeper, and the problems begin to emerge. There’s a mismatch between our innovation inputs and outputs. Although we score well on inputs, this is largely due to our university rankings and engineering and science graduates. But on innovation outputs, we consistently struggle to lift our game on the number of patents and unicorns, as well as our high-tech manufacturing capabilities and production and export complexity.[6]
Our article, From idea to impact: translating research into results explores these and other factors, including people and skills shortages. It also unpacks how our “lucky country” status and lack of economic diversity have encouraged Australia to rest on its laurels when it comes to economic policy settings. If you want to explore this topic in more detail, it’s a great starting point.
The way forward
Since the beginning of the decade, three interconnected pillars: funding, community and government policy have been working together increasingly to address these issues. This year, the Strategic Examination of R&D (SERD) panel has been tasked to deliver policy recommendations to shift the needle on translational research for Australia. In July, the panel unveiled some of the key findings from the consultation process for its February 2025 discussion paper. The report identified the long-term structural constraints hampering innovation in Australia and provided potential solutions, such as the need to boost private capital flows to support R&D and innovation activities.[7]
Unlocking Australia’s R&D Potential by Mandala Partners found improved R&D policies could unlock upwards of $7 billion annually in additional gross domestic product and boost productivity growth by 0.1% annually.[8] Once again, we have no shortage of views about how to fix our problems. But we need more than ideas. Let’s look at how Australia is beginning to turn potential solutions into real-world actions to close the commercialisation gap.
Shifting to sovereign capability
Australia’s barriers to commercialisation are nothing new, but recently there has been a concerted effort to address them. The COVID-19 pandemic highlighted Australia’s lack of sovereign capability and fragile supply chains, prompting a swathe of new initiatives to try to address these issues.
Policy
In October 2020, the Morrison Government announced its $1.3 billion Modern Manufacturing Initiative and National Manufacturing Priorities and plans for a patent box scheme. Following the 2022 Federal Election, the Albanese Government cemented the bi-partisan support for building Australia’s sovereign capability with a flagship policy of its own. It superseded the Modern Manufacturing Initiative with the Future Made in Australia, which features $22.7 billion over the next decade, and the $15 billion National Reconstruction Fund. Earlier this year, legislation for the $14 billion Future Made in Australia (Production Tax Credit and Other Measures) Bill for green hydrogen production and critical minerals processing passed the Senate. And the SERD panel’s wholesale review of Australia’s R&D systems will deliver recommendations that the government has committed to action at the end of this year.
Funding
More funding options than ever before are available for start-ups and scale-ups, including peer-to-peer lending, Australian venture capital and the $2 billion boost to the R&D Tax Incentive refund announced in 2020. R&D financing, such as the Radium Advance, enables innovation businesses to access their R&D refunds early and maintain momentum for their R&D. And this is helping Australian ventures avoid the delays baked into capital raises, grant awards and tax rebates and get to market faster.
Community
Beyond policy and funding, Australia’s public and private sectors are starting to remove the structural barriers preventing its innovation from reaching its potential. Innovation ecosystems and communities have also been growing in size and strength, including our own sector-agnostic, nationwide community. And this is helping more homegrown start-ups and scale-ups succeed than ever before.
From idea to impact and beyond
Despite the current economic uncertainty, in many ways, the future has never looked brighter for Australian innovation. Over the next 10 years, Australia is likely to make serious inroads into the structural limitations hampering our innovation and begin to build our sovereign capability. And if your business wants to get more than money to move from idea to impact and beyond, Radium Capital is here for you.
[1] CSIRO (2021). Every dollar invested in research and development creates $3.50 in benefits for Australia, says new CSIRO analysis. [online] www.csiro.au. Available at: https://www.csiro.au/en/news/all/articles/2021/november/value-innovation-investment.
[2] Association of American Universities (AAU). (2025). New Research Suggests Returns on Federal Investments in R&D Are Much Higher Than Current Estimates | Association of American Universities (AAU). [online] Available at: https://www.aau.edu/newsroom/leading-research-universities-report/new-research-suggests-returns-federal-investments-rd
[3] www.whitehat.com.au. (n.d.). Australian Inventions. [online] Available at: https://whitehat.com.au/australia/inventions/australian-inventions.aspx.
[4] Parsons, V. (1967). Raymond, James (1786–1851). [online] Anu.edu.au. Available at: https://adb.anu.edu.au/biography/raymond-james-2575
[5] Staff, 9News (2020). Rapid COVID-19 test developed in Brisbane approved for use in the US. [online] @9News. Available at: https://www.9news.com.au/national/queensland-coronavirus-news-rapid-covid19-home-test-developed-in-brisbane-australia-approved-for-emergency-use-in-us/02367aad-aacd-495b-bdfa-af525ace73e6
[6] WIPO (2024). Australia ranking in the Global Innovation Index 2024. [online] GII Innovation Ecosystems & Data Explorer. Available at: https://www.wipo.int/gii-ranking/en/australia..
[7] Industry.gov.au. (2022). Converlens – Engagement data insight platform for surveys, consultations and text. [online] Available at: https://consult.industry.gov.au/strategic-examination-rd-discussion-paper.
[8] Business Council of Australia. (2025). Unlocking Australia’s R&D potential. [online] Available at: https://www.bca.com.au/unlocking_australia_s_r_d_potential