Let's do some future gazing into 2020 or thereabouts and see what it feels like to be making your living in the Northern Rivers region of NSW, Australia.

Well, we might find that the region has made a stunning reality of its partly tongue in cheek name of Cellulose Valley.

Cellulose Valley would be a household word, from Ballina to Baltimore, from Casino to Cairo.

The region has led the way by marrying cutting edge plant and bioscience with skilled business acumen and the best of digital electronic intelligence gathering, marketing and distribution.

As a result, it has met the burgeoning world demand for new medicines, healthy lifestyle products and services, and environmental solutions and has grown a plethora of agile, knowledge-driven businesses with global reach from their home in the Northern Rivers region.

This region has in fact become a high performance hub, a global cluster of excellence based on the science, the know how and innovation that is now synonymous with Australia's Cellulose Valley.

The typical business here in 2020 is small, clever, nimble, global and wired up to capitalise on opportunities and markets worldwide. Opportunities are open and visible to all, courtesy of the internet and the information revolution.

Customers around the world are part of business production decisions in real time. Customers use the web to design and order their own personalised products and services.

Winning businesses surf the information waves – they manage and harness knowledge affecting their business no matter where it comes from - customers, suppliers, employees, government regulators, competitors or past failures.

And, of course, the Northern Rivers region succeeded in putting environmental excellence and sustainability on centre stage. Environmentalism, in fact, defines the business of Cellulose Valley; it is a core characteristic.

This region has succeeded because it has fashioned mainstream business opportunities from world class skills and advances in scientific applications and technologies in life sciences, environmental management and natural products.

And, in doing so, the region has tackled head-on community concerns with genetic modification and biotechnology and found a way forward.

Or maybe not. In 2020, maybe the only reason we come and visit the Northern Rivers region is to take a break from the hard grind of trying to do business in a world of chauvinistic nationalism and revived trade barriers.

It's a lonely time for business people. The promise of Cellulose Valley decayed because international markets could not be cracked when barriers to global free trade went up. It is an age of borders, protectionism and isolation.

Survival becomes the main game in both the developed and developing worlds, so there is little attention paid to the products and services that Cellulose Valley sought to create. Except for a few rich folk who are the source of a high priced, elitist, black market.

But there is not the widespread, high volume demand needed to commercialise the science, clinical trials and regulatory processes to develop sustainable businesses from the natural endowments of the Northern Rivers region.

The only companies doing really well are those in the defence industries to support the geopolitical crises, skirmishes and wars that we are either involved in or protecting against.

Or those lucky enough to be able to exploit personal business relationships, cultural and heritage ties to Asia and hard won political bilateral trade deals.

These latter people won't be visiting the Northern Rivers region because they have their noses to the grindstone, no time for recreation or for learning and reflection at seminars exploring the future and more innovative ways to do business.

For the rest of us, well we might visit the region to enjoy the beaches and the natural bushland and to socialise with the laid-back locals in a safe, unstressed environment, even if it is a bit of a backwater when it comes to the growth and productivity enhancing sectors of the knowledge economy.

These different pictures of the future of the Northern Rivers region in 2020 are drawn from an ambitious project conducted by the Australian Business Foundation over the last 12 months, which developed four alternative scenarios for the future of business in Australia to the year 2015.

In addressing you today, I wear dual hats as Chief Executive of the independent, private sector think tank, the Australian Business Foundation and as Acting Chair of the NSW Innovation Council, a statutory body which advises the NSW Government.

Happily, in addressing the topic of Future Gazing 2020, the messages I wish to convey wearing my two hats harmonise well.

The key conclusion from exploring possible visions of the future is that innovation is crucial for Australia to make the grade.

Innovation meaning:

• doing novel things or scoring breakthroughs;
• doing old things more intelligently;
• turning new ideas into businesses; and
• adapting and gradually improving the way we work and how we organise.

In short, securing the future is about competing on the basis of cleverness and know-how in a world where free and fast information flows reduce the shelf-life of ideas, the duration of first mover advantage, and the product cycles of businesses. Thus, making continuous innovation a survival strategy.

The drivers that led me to this conclusion emerged from the Alternative Business Futures project by the Australian Business Foundation, documented in the publication entitled "Alternative Futures: Scenarios for Business in Australia to the Year 2015".

The main driving forces that we discerned affected all scenarios, although they played out differently in each.

Among these were themes about:

• increasing globalisation and its effects on national boundaries, cultural identity and political decisions;
• the transformations being wrought on business and commerce by online, open, networking technologies;
• the power of new consumerism, with production decisions shifting from producers and owners of capital to consumers;
• the rise of the knowledge economy and the ascendancy of intangibles;
• the far-reaching effects of new technology advances and the convergence and recombination of old technologies;
• new skills and competencies required to compete in an increasingly wired, informed and connected world; and
• the social fabric impacts of the way the world is moving, whether it's the gap between the information rich and the information poor, or the increasing mainstream concern with environmental issues and the social record of businesses.

From these types of issues, we defined four different, but plausible scenarios for how the future could pan out for business in Australia to 2015.

In summary, our four alternative futures were as follows (with a little help from Richard Neville's colourful prose):

First Global Nation – characterised by the globalisation of business and the wired, interconnected, online economy, where Australia successfully finds itself a place.

Australia shows leadership in this "silicon valley" world of knowledge industries, global peace, open markets and economic growth. A vital young country reinvents itself to capitalise on the massive transformations of business and society. Our cyber-savvy firms sparkle on Wall Street, wealth is shared, and the arts flourish.

Sound the Retreat – the story of the backlash and consequent decay of globalisation, forcing Australia to revalue its bilateral business relationships as multilateral ones become impossible in the face trade barriers, capital and immigration controls and nationalist and protectionist policies of all sorts.

There is economic downturn, a widespread capital retreat and loss of investor confidence. We forge commercial partnerships with key nations and drawing on our melting-pot past, create a cultural and business gateway. Australia as the Switzerland of Asia.

Brave Old World – where Australia rests on its laurels and does not see the need or the urgency to pursue the emerging opportunities of the globalised knowledge economy in any systematic fashion.

Over-reliant on tourism and glamorous yet scant biotech breakthroughs, we miss the global tide. Introspective and smug, the lopping of tall poppies continues, fed by a "she'll be right" complacency. The economy falters and major brands are lost offshore.

Green is Gold – eco catastrophes, feasible clean technologies, and more environmental information and activism brings environmental sustainability to the fore. Skyscrapers sprout trees, goods are produced from renewable resources with zero emissions. Profits and lifestyles are enhanced by a "whole systems" economy designed to restore the balance of nature.

Environment issues become mainstream, bottom line business issues and Australia gets caught up in the strengthening of international environmental regulations and agreements, with varying consequences for business. Some businesses capitalise on their global environmental management acumen and open up opportunities for Australia.

How plausible these scenarios are is a matter of judgement, but some recent developments suggest that the Australian Business Foundation's work is on the right track:

• The meltdown of World Trade Organisation negotiations in Seattle is straight from the pages of Sound the Retreat.
• Growing public concern about genetically modified foods suggests a mindset that points to the Green is Gold scenario.
• Australia's internet uptake rate and new Australian companies riding the technology, internet and e-commerce boom positions us well for First Global Nation.
• And, sources as authoritative as the IMF, the OECD and the Brookings Institute talk about the current "Australia economic miracle", a necessary pre-condition for Brave Old World complacency.

What does this really mean for business in Australia and for those keen to ensure we make the transformation from the old to the new economy.

The Australian Business Foundation has drawn out the following key lessons for business strategy from its scenarios:

• the need for action to create and access new markets;
• explicitly defining and reinventing new business opportunities;
• technology upgrading and continuous innovation as a basic survival strategy;
• priority to investment in human capital and skills; and
• systematic consciousness of and attention to the community and social impacts of business operations.

The power of ideas and knowledge and how you unleash and use these seems to me to be a recurring theme for robust business behaviour in the light of the different versions of the future we have imagined. That's the lesson for the Northern Rivers too.

This is sometimes spoken about as innovation. But innovation which lies as much in cleverly adapting old knowledge as in creating new ideas.

It is easy to fall victim to the imagery of innovation – the talented idiosyncratic boffin, the Generation X techno whizz kid.

But not all radical change is catachlysmic and individualistic. Seismic shifts can occur slowly, incrementally and systemically.

Innovation can also be the province of traditional and mature industries. It can be associated with gradual improvements and adaptations driven by the competitive demands and pressures of the marketplace, or indeed, by the forces of change detailed in our scenarios – social, technological, political and environmental.

Capturing and responding to the latest scientific knowledge, consumer trends and market intelligence and applying new design or enabling technologies can drive productivity improvements across all industrial sectors.

Harnessing such knowledge can itself be highly innovative and can yield rapid growth.

To reflect this, the business mindset should not focus only on the breakthrough ideas of the gifted intellectual, but on creating clever companies with clear strategies, an outward focus, a nose for news and highly resourceful people.

To chart a path through the alternative futures for business in Australia or indeed, here in the Northern Rivers region, will require vision, a sense of urgency and deft partnerships between the public and private sectors to make it happen.

If we succeed, then I can envisage Australia being the "brand" of the 21st century – youthful, energetic, clever, adaptable, inventive and reflecting our cultural values of openness, ingenuity and giving everyone a fair go.

Not a bad outcome from future gazing into 2020.