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Turnbull’s Innovation – a rebranding of the same old pocketful of promises

By David Tyler

Malcolm Turnbull’s ‘Innovation! Package‘, turns out to be another boost to small business and nothing to do with innovation at all. It is another conjuring trick from a government pledged to avoid commitment or accountability under the guise of ‘encouraging the free flow of ideas and entrepreneurs’. It is based on a seriously defective business model, the tech start-up. As a strategy toward economic restructure, it is a poor choice; an inexcusable error of judgement.

Above all, Innovation! is an opportunity missed. Instead of investing in renewables, boosting employment and kicking its fossil fuel dependency, the Coalition has chosen the trendy but flaky tech start-up business enterprise, a choice which will distract from tackling its rising carbon emissions while further trashing Australia’s former reputation as a good global citizen.

For all Greg Hunt’s absurd claims that we lead the world in climate policy, expert report, based on a range of measures, from the UN climate talks in Paris yesterday reveal us to be third last. Although Julie Bishop may fluff around on the world stage promising to fix climate with ‘innovation’ the truth is that we are substituting urban myth for science or economics.

The start-up myth itself is enchanting and beguiling. Rich young San Francisco Bay Area, California dudes meet somewhere on the autism spectrum and hunker down to a year or two of nerdy anti-social existence. They live off their wealthy parents while they code software 24/7. Overnight they become billionaire misfits and eccentric publicity-loving celebrities proving all along to the world that smarts matter. The PM, especially, loves this tale.

The dudes attract a few other couch surfers along the way together with a rash of venture capital: rich folk who gamble by lending the dudes money in the hope of a huge return on their investment. Or not. Stop the press.

The start-up success story is an urban myth. Surely no-one in their right mind would recommend we adopt this model to fix our own tanking economy? If he is serious about the Innovation! hoo-ha, Mal’s judgement is once again is up the Silicon Valley creek.

Start-ups are expensive failures as a rule. Current UC Stanford and Berkeley research shows that over 90% of start-ups self-destruct. Typically, software dudes borrow to build a product for which there is no customer, a product for which they also have to manufacture a demand. Nothing like putting on the wings when your craft is taxiing along the runway. When the product is ready to market, the dudes have no buyers, no income and no funds to continue and they crash. The dudes fall back on couch-surfing until they inherit.

Not all give up. There are serial starters-up who make failure a lifestyle choice. Our PM warms to these. He will see to it that failure is elevated in our own society to the status it deserves by taking the sting out of bankruptcy. No stranger to failure himself, politically, he will ignore the difference between political and business failure. Taxpayers will pick up the tab.

Even the few start-ups who succeed, employ few workers and minimise their taxes. Outfits like Google or Apple or Facebook are adept in creative tax accountancy. What start-ups are good at is making profits for investors.

Making a few rich dudes richer is no way to rebuild a nation’s prosperity. Start-ups offer no key to economic revival. They do, however, offer an attractive package to business classes, a package which is trendy enough to deceive the mug punter who will pay the bill through higher taxes. And coal is spared by default.

Strip away the packaging and Innovation! looks like plain old crony capitalism; a rebranding of the same old pocketful of promises to the big end of town that is the Liberal Party’s reason for being. A bit of tinkering around the edges is added to confirm Innovation!. Some refunds are touted as reinvesting in science as if government has suddenly come to its senses after destroying the CSIRO’s morale and much else with it. Turnbull supporters seize on the refunds as proof that Mal is progressive after all. The facts attest otherwise.

Some ‘efficiency dividend’ cuts from CSIRO, made when ‘good government’ had no need of science, will be returned. But it is nowhere near enough funding to do a ‘reset’ even if CSIRO wanted to. Or it were possible. So much knowledge has already been irrevocably lost. But business and science will be able to hold hands in the cosy, innovative Turnbull era instead of being at arm’s length or independent as empirical impartiality dictates.

Academics are to be enticed out of ivory towers to team up with business types in an alarming re-run of the wishful thinking that ignores our economy’s small size. We do not have the money. Venture capital is just not available here to the degree that it is to UK or US researchers. The priceless value of pure research in non-commercial fields is also ignored, although vital to innovation and the foundation of all science.

So what are we left with? Another tax break for investors? A newer, softer neo-liberal bankruptcy-lite to allow ‘entrepreneurs’ to quit more easily; bail out of financial obligations such as wages to redundant workers more readily? An incubator for shonky con-men and dud business ideas? Strip away Innovation! Package wrapping and most of what is left amounts to a scheme in which privileged venture capitalists are subsidised by everyone else.

Attracting venture capital, we are told by our po-faced ring master Turnbull will enable the best business brains to invent new businesses which in turn will G-R-O-W the economy. We are to forget in all the hoopla and excitement that venture capital has no interest in progress or innovation as such. But it loves huge profits.

Turnbull expects us to fall in love with a scheme to encourage those whose business model includes the very best the Cayman Islands has to offer. It will not build a 21st Century economy or a nation but it will accelerate our already disturbingly rapid divergence into two distinct nations, a nation of haves and have-nots.

Yet is anyone really surprised by Turnbull and Pyne’s surprise package? Turnbull gave us our NBN, popularly known as ‘fraudband’. A political stunt, NBN is now woefully behind schedule, over-budget, slow and over-priced. It is increasingly evident to consumers that the NBN project, like Direct Action is fundamentally flawed.

Substituting copper wire for fibre allowed the LNP to undercut Labor’s real NBN, but it is a bit like carrying forward Kyoto credits instead of reducing our carbon emissions, an accountancy trick which does nothing to make it all work. A sale of Turnbull’s NBN lemon is rumoured. In softening bankruptcy rules, Monday’s message is that it’s OK to fail. You learn from it. Turnbull would know. Or is it OK to fail, provided someone else picks up the tab?

A Humpty Dumpty for our times, Turnbull can make Innovation! TM mean whatever he chooses as he peddles a scheme to boost his wealthy backers’ fortunes at the expense of all the rest of us; a type of subsidy for the investing classes. Treasurer Morrison is on standby to announce further cuts in government spending; cuts to our services and quality of life as a nation, all in the name of Innovation! Innovation! is already morphing into a new, secular religion, at least in Liberal Party circles. Or is it a tax-deductible church and charity to business? What is certain is that it will cost us all dearly.

Innovation promises, programmes are old hat in Australia. Innovation policy expert Roy Green notes that Australia has had 60 reports at Commonwealth level on innovation since 2000. $9.7billion of government funds is spent annually on ‘research and innovation’ across 13 portfolios and 150 budget line items.

Making Innovation! into a faith means that it is immune from criticism. You can’t be against the future can you? Only a heretic would be sceptical. Challenging the creed is almost un-Australian, as Malcolm Turnbull clearly implied when he chided Leigh Sales on Monday’s 7:30 Report. ‘Aunty is not interested in Innovation!?’ he gibed. Nor was she excited. ‘Exciting’ infects all government policy announcements it seems. It is becoming a test of faith. Forget reason. If you are not excited, you are beyond the pale; an unbeliever and a Luddite.

Turnbull’s ‘exciting’ announcement on his nation’s future is pure theatre. Spruiking his package around lunch time Monday, the PM is flanked by our agile new Innovation! Minister, Christopher Pyne, the consummate political organ grinder’s monkey who is reinventing – repositioning himself – ‘in this space’ – before our very eyes. Pyne is flattered, he says, to reveal that his name was called second when Turnbull announced his new cabinet, but to others the PM’s choice of Christopher Pyne for the new portfolio signals an each-way bet at least on its success.

A spectacular flop as a ‘back to the future’ Education Minister, whose advisors included back to basics gurus, Kevin Donnelly and other advocates for corporal punishment and that old nostrum ‘the Judaeo-Christian tradition’ to purge the modern filth of relevance from children’s learning, Pyne peddled his ideologically blinkered, backward vision of education as a private market-driven commodity and the rightful prerogative of the rich.

Although the odd, ambitious, Vice Chancellor could see promotion in embracing Pyne’s elitist neo-liberal plan to privatise learning, there were few other takers. It was widely believed that Pyne was forced to write a book, about himself for his children lest they read for themselves, one day, unaided the truth about their father’s failures. Yet he is a survivor. A sequel, Christopher Pyne, A Man for All Seasons, must surely follow.

Disappointingly missing from the launch of the new era of mindless optimism, Australia’s own techno-Micawberism was a song and dance routine. Surely Kylie could be persuaded to reprise Locomotion with just one or two judicious edits?

‘Everyone is doing it … the Innovation! … c’mon … c’mon … do the Innovation! with me’.

Another Prime Minister, another Christopher Pyne is doubtless already working on the choreography. ‘Industry, Innovation! and science’ are conjoined uneasily in a threesome of convenience in the tyro minister’s full title but we all know it’s a meaningless title for a made up job to keep a recycled Pyne, a numbers man, in Turnbull’s pocket in case another coup is brewing.

Abbott will stay in politics by popular demand, he says, between snipes at his PM and his PM”s policies. Yet Mr Popularity brushes aside his need to discipline rogues. Even with the recent eight point downturn, he’s still up in the ego polls of preferred PM, as if it matters.

Turnbull is mobbed by his own cheer squad. Kate Carnell just loves him. Andrew Carnegie has a man crush. Orchestrated squeals of approval are heard from the hordes of ‘institutes’ and other ubiquitous lobby groups for the rich which will successfully block any real progress or innovation. Indeed, Australians have stagnation rather than innovation to look forward to in the words of the clear-eyed economist Satyajit Das.

‘What I’m seeing now in Australia is the same that I see in many Western democracies. Powerful lobby groups form and then they basically push their own agendas and, because they countervail each other, the whole system basically gets completely and totally stagnant and nothing happens.’

Turnbull’s Innovation! stimulus package unleashes a Pavlovian stampede as business classes clamour and elbow each other aside to snout the public trough, breaking only to preach small government or plead with government to cut funds from the poor and disadvantaged. An intoxicating scent of vast profits to be made wafts towards the feral animal spirits of the entrepreneurial classes like catnip from Canberra. This way if you want to make money!

Anyone who has any can lend their money at favourable rates and with less risk to ‘start-ups’ or new businesses. Rich white men step up. They are not slow to catch on to Malcolm’s spiel. Business, especially ‘small business’ as the motley, multifarious mob likes to style itself, can see that Innovation! is all about encouraging ‘start-ups’ or small business ventures. About them. And that’s all it is. Innovation! is not about new or original ideas. The country can’t afford any of that expensive, non-productive nonsense.

Kill-joy Opposition Leader, Bill Shorten, is duty-bound to remind anyone still listening to him that, ‘Since the 2013 election, the Abbott-Turnbull Government has cut $3 billion from innovation, science and research initiatives.’ Let Malcolm Turnbull insist at every turn that we are an agile and clever country, the evidence is otherwise.

Australia may rank number one in the world for how many years kids typically spend at school, but it is 77th when it comes to how many graduate with science and engineering degrees. Here Australia ranks below Azerbaijan, Mongolia and Guatemala and will continue to do so provided our innovation is confined to creating business incubators for the wealthy at the expense of expanded, improved access for all to education.

Let Turnbull make his announcement with the assistance of a funky horn-rimmed Pyne now reborn as guru of the Innovation! vibe. Well may they redeem bankruptcy and failure as yet another stage in learning. Pyne is destined to fail at his latest project just as surely as he flopped as Minister for Education. Unless, of course, he incurs collateral damage as Mal Brough digs himself out of the Ashby go-fetch-Slipper’s-diary scandal.

Australians are not deceived. They know that Prime Ministers and governments do not create innovative nations or economies by decree. They know that however attractive the tax breaks, a rash of investment in companies based on the software start-up model is no more a step towards greater national prosperity than it is a way to restructure our stalled economy.

Designed to reward his small business backers, presented as something it is clearly not, infected by the mania of the Silicon Valley start-up cult and heeding none of its limitations, Turnbull’s Innovation! Package is a breach of faith with the Australian people as much as a signal failure of his government’s political imagination and will to explore real reform. Still, with Kylie behind it, The Innovation! could really catch on.

‘Everyone is doing it … the Innovation! … c’mon … c’mon … do the Innovation! with me’.

David Tyler blogs at http://urbanwronski.com. He is a regular writer for The Tasmanian Times and has had work published on Independent Australia.

 

21 comments

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  1. Loz

    Great article. We have a stagnant and lazy government who has no creativity whatsoever other than making up fairy tales for public consumption. It seems one useless PM has gone only to install another useless PM. Why Turnbull is so popular is beyond my understanding. The fact that he instigated a second rate NBN is enough to show he is hasn’t got the credentials to be PM of this country, but once again the MSM salutes a hollow man.

  2. Gilly (@GillyBW16)

    All hop on the coding bandwagon because manufacturing and TAFE have been shut down

  3. Phil

    Excellent analysis of the snake-oil emanating from this stinking government. Turnbull is off with the pixies and his whole snake-oil program is going to cost the average Australian very dearly.

  4. June M Bullivant OAM

    Smoke and mirrors, slight of had, typical of politicians with no vision.

  5. David

    Just on the NBN. Yesterday the snake oil salesman masquerading as a PM, traveled to Esperance on the WA Sth Coast to meet with the families who have lost so much and the firefighters, who braved the smoke and flames for 6 days during the tragic fires.
    A commendable action on his part but then after offering his sympathy he made a big deal of how he would personally ensure, telephone communication were improved and infrastructure upgraded to ensure the poor communication facilities away from the urban Esperance area would be up to standard!!

    I hope he didn’t mean his standard, because that means diddly squat. February 2014 was the roll out month for LABORS NBN.in the Greater Esperance area. That was confirmed by the new Govt following the 2013 election, with Turnbull now in charge of the NBN. 2 weeks prior to the start of roll out, all residents were advised the roll out was postponed until??????.
    It is now the end of 2015 and there is still no expected date for the start. Meanwhile the 18000 residents in the Esperance Shire suffer with speeds of up to 3mps if lucky at any random time.

    My point… Turnbull never at any stage of his visit to these grieving folk, mentioned publicly at least, the NBN. Not a word and he ensured he made plenty of public utterances, adequately covered by the large media pack following him. He is a disgrace, a painted showman, with no substance and no integrity or spine. As others correctly say before me, with their own descriptions.

    I suggested on another site, with the majority of Australians blinded by the dazzle of his phony smile, the big words, the oozing of insincere niceties he is well on the way to a solid win whenever he calls the election. Unless the ALP can convince Shorten he has no choice but to stand down from the leadership, his standing in the polls is an absolute embarrassment and a joke, there will be no letup from the disastrous policies of the Abbott Govt, which it seems Turnbull is bound to proceed with, if he wished to retain his Caucus support.
    Thanks for the excellent informative article David.

  6. Chris

    *sleight of hand

  7. Chris

    “A newer, softer neo-liberal bankruptcy-lite to allow ‘entrepreneurs’ to quit more easily”
    Socialize the risk(or losses) and privatise the profits, is i think what people say.
    Apparently “lemon socialism” is a term….https://en.wikipedia.org/wiki/Lemon_socialism
    I think it may sound ‘newer and softer’ but could actually be quite dangerous. How about we use our spy agencies to spy on the competition and aid the innovators in their negotiations and developments ? It will ending up costing us lots if we don’t…… http://www.abc.net.au/news/2015-09-21/henriss-address-the-oil-injustice/6790978
    http://newint.org/blog/2011/03/02/privatizing-profit-and-socializing-risk/

  8. diannaart

    Rabbiting on about Innovation! without mentioning sustainable technology or methods to cope with climate change – whether we manage to keep global warming under 2 degrees or not, we still need to adapt as quickly as possible…. OK this did not come out as succinctly as I’d hoped – HTF can any leader of a so called modern western nation, talk innovation without mentioning any of the stuff I mentioned above????

    but then… who has asked Turnbull about any of the above mentioned stuff?

    Jesus wept!

  9. jimhaz

    I found the article too defeatist, too negative for negativity’s sake.

    Not that I like the change to the bankruptcy side of things. 1st bankruptcy OK fair enough, but after that no decrease to 1 year.

    In terms of direct spending it is a really small package, so wont do much, but Aust business lacks the entrepreneurial spirit (they only do what is already proven) and this is just a base. We have to work out how not to sell off the ones that have merit to the US or China. A single successful startup can wipe out the losses on most other failed startups – providing it results in recurrent income via local manufacture and employment. If investors are dumb enough to invest in dumb ideas, that is their problem.

    If Turnbull, the archetypal opportunist, is just about creating more tax loopholes and more rapid opportunities for the serially incompetent, then sure the sarcasm in this article is fair enough.

  10. Wally

    Chris

    With Turnbulls NBN there is very little fibre cable in proximity of bush fires, most of the fibre is a metre underground, the vulnerable cabling between the home and the node will remain copper. Most rural areas are getting wireless NBN so once again little to burn and very limited if any improvement over existing Internet services at a higher price. They need to change NBN from National Broadband Network to the No Bullshit Noddy.

  11. Chris

    Wally That may be the case but it turns out wireless options don’t serve well through smoke and not at all when unpowered. They are talking of the need for many repeater stations. Truly fire/heat resistant cabling would have many other applications also …defense, transport, power grid, etc. It wouldn’t be a bad thing for Australia to specialize in. A system that fails in the heat or smoke or other extreme conditions is no good for us.

  12. Wally

    Chris

    There is no innovation in developing fire rated cable “pyrotenax” has existed for nearly a century and all efforts to develop plastic sheath to match it have failed. There are several products that compete with pyrotenax but they do not perform as well and the only benefit is ease of installation. Sorry to put a downer on your inspiration but there is no benefit in recreating the wheel.

    Since MI cables use no organic material as insulation (except at the ends), they are more resistant to fires than plastic-insulated cables. MI cables are used in critical fire protection applications such as alarm circuits, fire pumps, and smoke control systems. In process industries handling flammable fluids MI cable is used where small fires would otherwise cause damage to control or power cables. MI cable is also highly resistant to ionizing radiation and so finds applications in instrumentation for nuclear reactors and nuclear physics apparatus. https://en.wikipedia.org/wiki/Mineral-insulated_copper-clad_cable

    As far as power supply is concerned for wireless towers it is pointless wiring in fire resistant cable when the pole that brings power into the area is going to burn down in a severe fire anyhow. I inspected the power supply to 2 NBN towers under construction last week and the wiring is standard PVC conduit with copper cable from a pit like most other installations and both pits are fed fro overhead power lines. Simply no benefit in wiring the towers in fire protective cables but they have inlet sockets for generators to be connected quickly if required.

    “They are talking of the need for many repeater stations”

    Repeater stations are only required in extremely remote regions such as the Moomba Gas fields and similar locations hundreds if not thousands of miles from anywhere. Typical mobile phone and broadband towers are individually connected to the landline telephone backbone which will ultimately run on fibre optic cables. It would be impossible for a wireless network to carry the volume of traffic required in populated areas without connection to the networks hard wired infrastructure.

  13. Chris

    Wally Heh we don’t have your old fashioned wooden power poles here https://en.wikipedia.org/wiki/Stobie_pole (the NBN of power poles ; ) )
    The governments have certainly talking of some more fire resistant and reliable system http://www.abc.net.au/news/2015-12-01/bushfire-communications-failed-review-promised/6989576 and http://www.abc.net.au/news/2011-10-21/bushfires-burn-amid-communication-problems-in-the/6177180 and https://au.news.yahoo.com/thewest/countryman/a/30146543/esperance-fires-phone-problems-risked-lives/
    There is 3 stories about 3 states with communications infrastructure that is incapable of dealing with fire.
    Trenching everywhere is not possible, too expensive and damaging to the environment and vegetation.
    Most things I saw on fire rated cables only went to 70 or 90 degrees but I only had a quick look really.

  14. Wally

    Chris

    “Wally Heh we don’t have your old fashioned wooden power poles here”

    Horses for courses, what works in one situation does not necessarily work in different conditions and steel cross arms have many downfalls compared with timber. One of the main reasons some states do not use timber poles is the inability to grow trees tall and straight enough to do the job. “Stobie used materials easily at hand due to the shortage of suitably long, strong, straight and termite-resistant timber in South Australia” If you speak to linesman they will all attest that any type of concrete/steel pole are difficult/dangerous to work with.

    We lived for a long time without any real issues before mobile phones even existed, the world has many problems that are much more important than losing phone reception during bushfires. The common problem in all of the situations you have linked to is a reliance on a privately owned public communications service to provide coverage for emergency services.

    “Trenching everywhere is not possible, too expensive and damaging to the environment and vegetation.”

    Well we have done it from east to west, north to south and every other which way in the past, obviously there are limitations but wherever demand satisfies the cost it has/will be done.

    ” Most things I saw on fire rated cables only went to 70 or 90 degrees but I only had a quick look really.”

    If you don’t know from experience or having done diligent research why comment? I don’t mean to be bullish or rude but to disregard the engineering that has gone into the electrical and communication systems over the last century is insulting to the engineers and tradesman within the industry. For the past 3-4 years the MSM have been complaining about electrical infrastructure being gold plated.

    We can all search with Google and read the content of a few links but this doesn’t make one an expert.

  15. diannaart

    Wally correctly stated:

    …The common problem in all of the situations …. is a reliance on a privately owned public communications service to provide coverage for emergency services.

    The great, heaving elephant in the room continues to be; placing public necessities in the hands of profiteers. The original excuse was that private businesses were more efficient – neglecting the fact that efficiency for private business is in making money (duh!) – not in delivering a service. Based on that limited view, an adequate, equitable system to serve the needs of all people is rendered completely impossible – we do not get better public transport, utilities, welfare when the foundation is profit.

    OK I know I am preaching to the mostly converted – however, I do believe there is hope – any previously privatised service that continues to receive government support – should/must be returned to ownership by the public – if a private company cannot make a clear profit without a rebate or without providing a SUPERIOR service (to what was under the public domain) must be considered a failure – and the government needs to cut its losses for further support of a failed system and return said service to the public – where it can do the job we have governments for!!!!

    Sure, there will be losses – for a while, way back in the olden days, many public services actually turned a profit – remember Telecom, anyone? We simply cannot continue the same experiment and expect, not only affordable quality service, but also adaptation to sustainable services brought about by over-reliance on fossil fuels and the joke that profit answers all our problems.

  16. Wally

    diannaart

    Problem is what you, I and many of the readers here see as logical or common sense goes over the head of many people in positions of power and/or it does not fit with their ideology or align with their vested interests.

  17. diannaart

    Wally

    Sometime ya just gotta vent…

    Is there no-one to point out that subsidising private corporations indefinitely, will always be far more expensive than biting the socialist bullet and returning public necessities to public ownership? Apparently when this simple question is ever raised the outcries and hysterical shrieks of ‘communism’ drowns any further rational thought.

    Imagine if people in power did not have to lie any more because they were behaving rationally.

  18. Chris

    Wally ” don’t mean to be bullish or rude ”
    Well you are and plenty of times innovation comes from people outside the area of expertise. You seem angry that you were proved somewhat wrong. A jerk either way.

  19. Wally

    Chris

    “You seem angry that you were proved somewhat wrong.”

    On what point????

    “A jerk either way”

    Chris I have not taken a personal shot at you and I am happy to debate/discuss topis but…….

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