National Innovation Systems: Finland, Sweden & Australia Compared
November 2005
Professor Göran Roos, Founder, Intellectual Capital Services Ltd, Intellectual Capital Services Ltd
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Nations need national innovation systems to foster an infrastructure of linkages or networks among firms, universties and governments to gain competitive advantage. By understanding the strides taken in Finland and Sweden, two showcases for development of national innovation systems, Australian firms and governments can identify what lessons might be applied in improving Australia's national innovation system.
Overview & Comments
The Foundation commissioned Göran Roos and his colleagues at Intellectual Capital Services Ltd to conduct an extensive literary study of the innovation systems of Finland, Sweden and Australia, with a view to isolating the determinants of successful national innovation systems, and making recommendations to governments, businesses and other participants in Australia. Professor Roos presented these findings to business and policy leaders on 27 Novermber 2005 in Adelaide, at an event organized by ABF Director Frank Wyatt.
Some key characteristics working against a successful national innovation system were identified as follows:
- There is no best practice checklist for the ideal national innovation system - the challenge for policy makers is to establish the innovation system whose character interacts positively with the national and international policy environment, having regard to firm and country specific advantages and disadvantages.
- Australia is not ranked highly as an innovative country on various US and OECD rankings largely due to falling tertiary enrolment rates, business expenditure on research and development as a proportion of GDP and falling intensity in research and development, particularly amongst the private sector.
- Relative to the Finnish and Swedish examples, Australia has poor or non-existent system linkages among public and private agencies, particularly research institutions and industry.
- The large number of SMEs in Australia, coupled with the low investment capacity for research and development by these organisations constrains the level of innovation to be achieved.
- Australia has been relatively poor at commercialising technologies developed through public sector research and development.
- Whilst many Australian managers are good at tactical and operational problem solving, they are less well recognised for developing and sustaining innovation strategies and cultures within their organisations.
The key lessons from this study for Australian governments include the need to:
- Champion policies and programs designed to drive innovative behaviour;
- If resources are constrained, or countries are small, foster linkages, knowledge flows and technological diffusion within specific industry clusters;
- Foster regional innovation clusters to boost capabilities;
- Engage positively in the policy discussion with a wide range of stakeholders including industry, universities and labour market organisations;
- Remain flexible and benchmark against best performers internationally;
- Change mindset to encourage local suppliers and develop partnership approach to industry development, rather than arms length relationship.
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