My parliamentary colleagues – John Cobb, Teresa Gambaro, Secretary of the Department Peter Varghese, Deputy Secretary Ewen McDonald, and to the many distinguished guests who are here, particularly those who are part of our International Advisory Committee and you’ll be hearing more about them later.

I hope that this space here inspires you, for my thinking about an innovationXchange came from a briefing I had from the Stanford Business School a number of years ago when they told me in detail about an entrepreneurs course that was conducted at the school involving aid programs. The space itself is meant to inspire thoughts of Google, or Twitter or Facebook. If you’ve ever visited their locations overseas or in Australia there is this very open, casual, informal atmosphere that inspires creativity. And the fact that we are over the road from the Department of Foreign Affairs and Trade and not within the halls of the Department is meant to give you a bit of a flavour of Steve Jobs ‘Team Mac’ and the fact that he put up his little pirate flag above the creative location that was to be the home of Apple Mac. So with all of these strains of exciting, inspiring ideas we came up with the innovationXchange.

The word ‘innovation’ has had an interesting history. Back in the 17th Century the idea of innovation meant danger, even heresy. English Puritan Henry Burton apparently put it about that church officials were ‘innovators’ and wrote “meddle not with them that are given to change”. Well the church officials retaliated and they accused him of being an ‘innovator’ and he was imprisoned and they cut his ears off!

So that is what happened in the 17th Century, fortunately, through the industrial revolution innovation became a term associated with science and industry, technical invention, and progress. Today, innovation has been almost universally embraced for its disruptive and creative capacity.

Innovation is the natural territory of entrepreneurs, businesses, private sector operators, NGOs, academic institutions – where necessity pushes, where risk is a given and encouraged, where creativity is embedded in the way people think, and the way work is conducted and projects are run. Private sector organisations innovate to seek the most efficient means of production, to remain competitive and to provide return for investors. 

I believe governments need to learn from the private sector to apply innovation as a principle to deliver efficiency, a better quality of life, productive growth, and positive change. This new centre, the innovationXchange, takes up and responds to that charge.

Our innovationXchange will drive new and exciting technologies, ideas and partnerships in our aid program. We will take seemingly intractable development problems and come up with the best and brightest and most practical ways of solving them. For far too long we have pursued the same path, yet with no better outcomes.

My ambition for innovationXchange is for it to be collaborative and creative, to produce brilliant but practical ideas, and to make our aid program the best, most effective, sustainable, transformative program that we can deliver.

As our first project, I’m combining government support with private enterprise in order to broker new partnerships with a focus on our region. Today I am delighted to launch SEED Pacific. SEED Pacific will harness the collective power of business and society to solve development challenges in the Pacific. I have just returned from visiting Vanuatu to inspect the damage caused by Cyclone Pam and so the Pacific is very much our area of responsibility.

This new project, SEED Pacific, will work with global businesses that will show leadership and innovation in the Pacific. We will design a model that will broker and support the most promising partnerships between businesses and social enterprises, academia and civil society from across the region. These partnerships will develop business models that bring ideas, new products and new solutions to the Pacific that, while making profit, have a significant development impact.

Notably, I have been impressed by several examples, and one that you will be familiar with is the partnership between Vodafone and the United Kingdom's Department for International Development or DfID. Back in 2003 with just £1m and four years, Vodafone and Safaricom, the country's largest mobile operator, jointly launched a programme called M-PESA. 

By 2010 this innovative mobile banking solution created for Kenya's "unbanked" population became the most successful mobile phone based financial service in the developing world.  M-PESA gives millions of people access to the formal financial system and has been a contributor in reducing crime in an otherwise largely cash-based society. It accounts for nearly a third of Safaricom's profits today. It is a win for DFID, a win for Vodafone, a win for Safaricom and most importantly it is a win for the people of Kenya.
We are currently looking for a new consortium of organisations who can work with the Department of Foreign Affairs and Trade to create and run SEED Pacific. From January 2016 SEED Pacific will be open for new ideas that can deliver impact through innovation.

Today I am also launching a big new ideas project, the DFAT Ideas Challenge. DFAT is one of the oldest portfolios, governed by perhaps the most deeply traditional protocols, and hierarchies - if I could put it that way Secretary?! So I’m asking all of our DFAT personnel to become innovators and I can assure you I won’t be cutting anybody’s ears off if they come up with some great ideas!

So whilst the innovationXchange is focused on aid and development, these are just one element of the broader works of the Department of Foreign Affairs and Trade in foreign policy – our diplomacy, our economic diplomacy, trade and investment work, our cultural and education programs, our work on security and stability.

I aim to put innovation at the heart of all we do – my challenge for the Department of Foreign Affairs and Trade is: come up with the biggest, best and brightest new ideas about how we do business across the board – how we operate in all our spheres of influence.

At the heart of innovation, as Norman indicated, is calculated risk. One calculated risk that we are already taking is being the very first Department in the Australian Government to adopt Microsoft’s public cloud services since the ‘Cloud First’ policy was announced in October of 2014. This solution provides the innovationXchange with a new platform to drive collaboration and the exchange of creative ideas across the aid program and with external stakeholders.  It is also a completely mobile solution.

Lateral creative thinking is to be embraced but as Bill Gates said: “It’s fine to celebrate success but it is more important to heed the lessons of failure”. Though it is difficult for government to navigate the area of risk, if we are working in collaboration with the private sector - who understand and can build contingencies in for risk - then we certainly have room to move when we are accommodating the risks that we will inevitably come up against in the innovationXchange.

Collaboration is key. Bringing new knowledge and thinking into the aid program is vital.  To that end, today I announce the establishment of an International Reference Group, which will guide the work of innovationXchange.  We are bringing together creative thinkers, entrepreneurs, leading business people and those with knowledge of the changing nature of the Indo-Pacific region.  The objective of this esteemed group is to advise us on how to unlock new opportunities, broker partnerships, adopt and adapt global innovations to our region, and support new innovations in the delivery of our aid program.

This short video will give you a glimpse of the depth and breadth of thinking we will have access to through our International Reference Group.

Cut to International Reference Group video

The aim of the International Reference Group is to connect us with new thinking, new partners and new ideas.  And as you can see we have a range of contributors from across the globe from the United States, from Indonesia, from India, from PNG and bringing together their thoughts and their ideas with our Australian counterparts makes for a very exciting Reference Group.

One critical idea we have been discussing is the importance of big data.  There is a gap in data available to developing countries to enable evidence-based policy decisions, this big data gap.

Bloomberg is a company that knows about data.  How do we use that knowledge for the benefit of those living in poverty? I have met with Michael Bloomberg on a number of occasions and most recently in New York when we discussed this issue about harnessing data so that policies can be evidence-based. I have been impressed by his vision, his energy, his preparedness to think big.

Today I announce a US$100 million partnership with Bloomberg Philanthropies on ‘Data for Health’. This is US$100 million, a US$15 million contribution from Australia and a US$85 million contribution from Bloomberg Philanthropies. I think that is a pretty good partnership! It is AUS$130 million, so AUS$20 million from the Australian Government and AUS$110 million from Bloomberg Philanthropies.

This will build the capacity of governments in developing countries to collect and use vital health information to build better health systems. This focus on using information to drive decision-making is a traditional blind spot in development. It seems basic, but it can change everything if we have both the right data and the knowledge to use it properly.

The Bloomberg partnership includes not only the Australian Government, but implementing partners, from Australia - The University of Melbourne, from the United States - John Hopkins University, Centres for Disease Control, The Union North America, as well as the World Health Organisation. 

The partnership brings Bloomberg’s nimble, cost-effective ways of working to our neighbourhood. Healthier populations mean more stability, more economic growth  - that is good for Australia and good for our region.

So ladies and gentlemen, before we hear more from Michael Bloomberg on this new partnership, Data for Health, I now officially declare open the innovationXchange. I look forward very much to an exciting era where we can deliver more in terms of development assistance to our region and I believe that this will provide a model for the rest of government.

Ladies and gentlemen, now more from Michael Bloomberg:

Cut to Michael Bloomberg video announcement

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