Lack of innovation is hurting productivity growth: Treasury

Despite the Government’s investment in promoting innovation and industry capability in six named sectors, the productivity gap between the most innovative companies in the world and Australian firms continues to grow, according to a news story in the online publication InnovationAus.

The gap was revealed in a report by economists at the federal Treasury, who found local companies are now slower to catch up to the “global frontier” than they were in the mid-2000s. Reaching for the stars: Australian firms and the global productivity frontier is a Treasury Working Paper published in January this year. The authors were Dan Andrews, Jonathan Hambur, David Hansell and Angus Wheeler.

The authors suggest Australian firms “have been slower to adopt cutting-edge technology and processes, and to improve their productivity performances more generally” than in the past, which is acting as drag on productivity growth. They conclude Australian firms could benefit from new policies that incentivise innovation and the adoption of emerging technologies by removing barriers to competition and business dynamism.

The full story by Joseph Brookes is at InnovationAus.