Vegemite is now owned by the Americans. So are SAO biscuits.

Chesty Bond looks like he may be heading off-shore too, along with some of Australia's best loved brands of sun and surfwear. And there are even some rumblings about the Flying Kangaroo!

These are just some of the Australian icons and brand names that have defined the Australian identity in the past, but are no longer made or owned here.

Should we be worried about this? Some people say it's just the natural course of events. As standards of living and costs rise in developed economies, then labour-intensive manufacturing will naturally gravitate to low cost countries or to places with large domestic markets that have the scale to compete globally.

They say we all should specialise in what we do best, and Australia is good at planting things in the ground and digging things out of the ground. And we should be satisfied with that.

Well, I'm not and neither is Australian Business Limited, my parent body, an organisation which for over 100 years has been informing, advising, improving and representing business in Australia.

Unfortunately, Australia's traditional strength is in commodity industries which are declining in both volume and value of global trade. So if we are over-reliant on them, we will not be able to pay our way in the world and support a standard of living expected by our citizens.

So, what can we do about this? We can't hide behind barriers in fortress Australia. We can't turn back the tide of inevitable globalisation, where capital, investment and jobs are increasingly mobile across national borders.

But, we can create a better future for ourselves and play our part in the highest return, fastest growing areas of economic activity and international trade – by using our brains and capitalising on our well-recognised Australian inventiveness and ingenuity.

We must boost Australia's performance in the clever industries, the new technologies and the emerging opportunities that arise from the blending of manufacturing and services to create whole new industries in the future.

This is where the most prosperity, growth, profit, productivity and jobs will come from in the 21st century.

This can be summed up in a single word, innovation. It is only through innovation that we will create the new Aussie icons and brand names that can replace the ones we have lost.

What does innovation really mean?

It simply means doing clever and smarter things.

It is not restricted only to high tech, breakthrough inventions and technological advances. Yes – it can mean that. But, it also covers all those ways of improving on old ideas, or inventing new ways of doing things, or better ways of organising work, or managing people, or logistics, distribution, supply chain management, or listening to your customer or supplier for an improvement or a problem which you can solve and so enhance your product or service, or even create a whole new generation of products and services that are attractive to more and more customers worldwide.

And you must do this systematically and continually. Not just once. The critical factor seems to be an ability to innovate and to do so on a continuing basis.

This means creating, sharing and transferring knowledge, keeping ahead of the pack, developing novel ideas and capitalising on them early (before they can be imitated) and to keep on doing this again and again.

Someone called it capturing the value from newness.

In a world like this, what is in the heads of your people, brainpower, know-how is more important that traditional "hard" assets like buildings, equipment, land and the like.

And size doesn't count. Innovation is equally open to small firms as it is to big multinationals.

But, don't be in doubt that Australia has an urgent problem. We are a small commodities-dependent economy with an industrial base more suited to the 1890's than the 1990's.

Business is highly concentrated, with an over-reliance on a small number of large transnational corporations. We are essentially a branch-plant economy.

We have heaps of smaller firms, but few that have achieved the scale to compete on global markets.

There are many gaps in local production and supply chains, so we suck in imports and we fail to add value to our own natural resources and raw materials, and this weakens our trade balance even further.

But, we do have a few things going for us. A sound and widespread education system; skilled and inventive people that come from many parts of the world which gives us an asset in language skills and cultural understanding; a technology-adept population; world-class scientific, engineering and research capabilities; long-standing investments in sophisticated social and physical infrastructure; and an Australian openness, lack of pretension and track record of producing much with few resources.

How do we capitalise on these strengths and overcome our weaknesses. Well, first we have to confront a choice.

There is a real choice facing Australia which was captured in the title of a landmark study undertaken for the Australian Business Foundation by a team led by Professor Jane Marceau of the University of Western Sydney Macarthur. This study was called The High Road or the Low Road.

This referred the choice of taking the high skill, high wage, knowledge-intensive road, where we complete on innovation and the quality of our technical know-how and skill. This road leads to more jobs and higher living standards.

Or we can choose a low technology, low skill path, where we compete by cutting costs, particularly wages, and by specialising in standardised commodities and products for fragmented markets. This will doom us to going head to head with low wage countries for a decreasing share of world trade and fewer job opportunities.

This is not really a choice. It is a race to the bottom – with severe social as well as economic consequences.

So, innovation is really crucial for Australia. It is at the heart of taking us up the value-added curve.

As a nation, we have to work out how we can be better represented and performing well in the high growth, highly productive, globally competitive, high return sectors of economic activity.

These are the innovative industries that do not compete so much on price and cost, as on quality, know-how, and cleverness. Higher wages and profits are generated by such enterprises. These are not just the technology, science-based new industries, but means even the most mature industries can reinvent themselves with innovation, new ideas and ways of working.

We need to have a good number and balance of such firms and industries in Australia, because they play about their weight in delivering the living standards we want for our entire community.

So that is why Australian Business decided to sponsor the Innovation category in the Western Sydney Industry Awards, and why we are here today to celebrate your success, not only as innovators but as role models of business excellence.

We need to recognise business achievements and to make more heroes from our business people for others to follow.

Australian Business is out to foster more prosperous, innovative, competitive, nimble business enterprises capable of serving the world from their home base in Western Sydney.

Let's hope we can look back in five or ten years time and see Australia growing more highly skilled, highly paid and productive jobs, than low skilled, low wage ones.

Let's hope we can reverse our trade balance and be importing a lot less of the high value added products and services we consume, because more and more of them are being produced in Australia.

Let's hope we can point to global centres of excellence anchored here in Australia for one or more of the high-growth, clever industries of the future, maybe in sectors as yet unimagined.

And, let's hope we have heard the last lament for lost Aussie icons, because the new ones we have created have become household words from Bahrain to Blacktown.

Thank you.