Good afternoon. It’s an absolute delight to be here with friends of Australia, friends of the United State and I acknowledge all our very distinguished guests here today, but, particularly, Ambassador Bleich and Ambassador Beazley who have done so much to enhance the remarkable relationship between our two countries, so thank you to both our ambassadors.

It is so energising to be here – from the West Coast of Australia to the West Coast of the USA - in San Francisco, a great city of the world.

The United States is one of the most exciting cradles of contemporary global innovation – in so many spheres of life – and in the San Francisco area in particular.

Home to Silicon Valley, synonymous with innovation and the tech giants – Google, Apple, Facebook, eBay and Yahoo! amongst others.

It is an intriguing concentration of creativity and entrepreneurialism found nowhere else in the world – although many have tried to emulate the culture.

This afternoon I will visit Twitter which is around a 12 minute drive depending on traffic conditions, a 30 minute walk or 17 minutes on a bike. I know this thanks to Google Maps, first conceived and developed in Australia.

Today, I will speak about the important contribution that innovation makes to Australia’s foreign, trade and development policy and how the United States and Australia are working together to achieve shared aims of peace and prosperity in the Indo-Pacific – a part of the world that is fundamental to both our futures – and what more I believe we can do together.

We have a shared interest in supporting economic development in our region, for while economic development has already lifted hundreds of millions out of poverty over the past three decades there is much more to be done.

I acknowledge the work of The Asia Foundation in this regard and I echo David Arnold’s words.

For more than a decade, the Australian Government has partnered with The Asia Foundation on more than 85 development projects in 17 countries.

We share a commitment to common goals, including encouraging sustainable and inclusive economic growth, effective governance, women’s economic empowerment and peace and stability.

The Asia Foundation understands the important role that innovation can play in international development.

For many years, The Asia Foundation has been helping to push the boundaries of aid policy and practice throughout our region.

There are few NGOs that could juggle an agenda involving the Philippines peace process, industry reform in Bangladesh while working with Google and local social media entrepreneurs on elections in Indonesia.

Asia’s remarkable growth story over the past few decades is as well-known and understood by Americans as it is by Australians.

Since the 1990s, when China opened up its economy to greater competition and market forces, China’s share of global GDP has grown seven-fold.

The Chinese economy is now the second largest in the world – an incredible achievement in a relatively short time.

Together with Japan and South Korea, the North Asia region is now one of the world’s great economic powerhouses.

India, the world’s second most populous country, is steadily putting in place the policies that will realise its economic and social potential.

The emerging economies of Southeast Asia – including Indonesia, Malaysia, Vietnam and the Philippines – are on the move.

These are impressive figures – and the Asian Development Bank has forecast that by 2030, Asian economies are expected to be roughly four times larger than today.

Asia’s share of global output is expected to rise to 40 per cent.

The Bank projects that in 15 years Asia will be home to at least half the world’s middle class.

The growth of these economies brings with it an enormous range of new opportunities and challenges.

Australia and the United States are natural partners in Asia.

Our relationship is based on a strong sense of shared values and a common approach to global issues – we are standard bearers for freedom and democracy, peace and prosperity and a rules-based international order.

I hosted a lunch yesterday in Los Angeles and one of the businessmen said his organisation was convening a conference to debate the future of Asian governance.

He felt it was important to discuss whether future governments in the region would be closer to the open liberal democracy model with which we are familiar, or whether more governments would be based on an authoritarian model.

Naturally we would want all of them to adopt forms of government based on what we regard as universal ideals of individual liberty and freedom and we can demonstrate what our experience has been as liberal democracies. However, we cannot assume this will be so.

There are two aspects of our efforts to promote our values - the first is to be reliable and effective partners of other governments and their people, particularly in terms of promoting domestic economic growth.

The second is to ensure that our nations are well governed, peaceful and prosperous, so that others aspire to emulate the achievements of our societies.

Australia and the United States already pursue an ambitious economic agenda in Asia.

We are partners in APEC and enthusiastic participants in the Trans-Pacific Partnership.

Indeed, the TPP is a major breakthrough for our region, as it sets a high bar for trade liberalisation among its member states.

It will create a new benchmark for others to follow and for others to meet should more nations wish to join the agreement.

The TPP means more jobs, more opportunity for increased trade in goods and services, and more investment.

To take full advantage of the TPP, particularly in developing countries, we must be more innovative with our economic partnerships, and continue to drive innovation in our industries.

The Apple iPhone is in many ways emblematic of the impact of innovation.

It was a hugely disruptive leap in technology (just ask Nokia or Blackberry) and was developed here in the United States.

Yet the iPhone is assembled in China from parts manufactured around the world, thereby creating employment in many developing countries, while also contributing strongly to the United States economy.

Innovation and prosperity go hand in hand.

Earlier this year the Martin Institute on Global Creativity at the University of Toronto judged Australia to be the most creative nation on earth. This is due to the imagination and flair of the Australian people – highly educated, highly motivated and risk takers.

And according to the Global Entrepreneurship Index we rank 3rd in the world on entrepreneurism (behind the United States and Canada).

So we perform well as an innovative and entrepreneurial economy.

Innovation is certainly at the heart of the Australian Government’s international and domestic agenda.

In the first few days of his Prime Ministership, Malcolm Turnbull appointed a Minister for Industry, Innovation and Science Christopher Pyne with an Assistant Minister for Innovation, Wyatt Roy, and Prime Minister Turnbull observed that:

‘If we want to remain a prosperous, first-world economy with a generous social welfare safety net, we must be more competitive, we must be more productive, above all we must be more innovative.’

He went on to say:

‘…we have to be more nimble in the way we seize the enormous opportunities that are presented to us. We're not seeking to proof ourselves against the future: we are seeking to embrace it. And this is a Government and a ministry that has that as its focus.’

Australia already has a heavy focus on innovation in our aid and development program.

Traditional methods of aid delivery are no longer sufficient to address development challenges.

While there have been decades of growth in Asia, poverty remains a serious challenge for many countries, and pockets of instability and conflict persist throughout our region.

Development challenges, particularly in fragile and conflict-affected countries, can be highly complex and seemingly intractable.

As The Asia Foundation understands well, innovation and new partnerships will be crucial for finding solutions to entrenched development problems.

Donor aid alone will not realise these goals. We must work collaboratively.

Bilateral and multilateral donors need to work with the private sector to apply innovation as a principle to deliver efficiency, creativity and sustainable growth.

We recognise the private sector is a powerful force for change, but often, businesses lack incentive to operate in underserviced, remote and small markets.

This is where we see the value of partnerships between traditional aid organisations and the private sector, to provide the support needed for business to play a more active development role in these settings.

Two of our key partners, Gavi – the Vaccine Alliance – and the Global Fund to Fight AIDS, Tuberculosis and Malaria already work closely with the private sector.

Thanks to Gavi, women in developing countries can now be vaccinated against the most common form of cervical cancer for just US$4.50 per dose – the same vaccine can cost more than US$100 in developed countries.

The Global Fund has had similar success in supporting countries to switch to more effective therapies for the treatment of malaria.

Another example of innovative thinking in working with the private sector came when I was in a remote region in Papua New Guinea. I was told that people were suffering or dying in remote villages due to a lack of pharmaceuticals. This is in a country just hours to the north of Australia.

There were generally sufficient stocks in the capital Port Moresby, although the fragile supply chains frequently broke down.

Yet while medicines and pharmaceuticals struggled to be delivered, most villages had a steady supply of Coca-Cola.

We are now working with private sector partners to use their supply chains and distribution networks to deliver desperately needed essential goods to some of the more remote villages in the PNG highlands and elsewhere.

It became apparent to me during my years as Opposition Foreign Minister that although our aid budget had grown to billions of dollars each year, some of our recipient countries were in fact going backwards in terms of social and economic development.

We needed new thinking for old problems.

As Minister for Foreign Affairs my portfolio includes international development, and I’m delighted that under Prime Minister Turnbull we have now appointed a Minister to assist me – a Minister for International Development and the Pacific - Stephen Ciobo - where the bulk of our aid program is directed.

As David indicated, I have established what I term the innovationXchange within the Department of Foreign Affairs and Trade to transform the way we deliver aid and development assistance and to create a culture within the Australian aid program, indeed hopefully across the Australian public sector, that seeks alternative and effective ways of reducing poverty and increasing living standards in our region.

The innovationXchange will identify, trial and, where successful, scale up innovative approaches to designing and delivering our aid program.

One of our early projects was just so fundamental – we tackled the way the Department of Foreign Affairs tendered for development assistance work.

Traditionally, tender documents detailed at length how the required service was to be provided with a mountain of paperwork to be completed on each and every aspect of the service delivery. On average there were 5 or 6 organisations who would tender for such work.

Our trial simplified this process by stating the problem that needed to be fixed, the money available for it, and then asked organisations to come up with their solution, and design their ways of delivery and their methods to resolve the problem.

This new approach attracted more than 60 applications, not only from NGOs, but also from private sector companies with creative and innovative approaches to foreign aid challenges.

This new model will be rolled out as widely as practically possible in coming months. For a risk averse public sector, this is cutting edge.

Importantly, the innovationXchange has brought together some of the brightest thinkers in the department, across the public sector with secondments from the private sector. Chris Vein formerly of the World Bank in Washington is a consultant and I know he’s here today.

It will collaborate with others who are also pursuing innovation agendas, including The Asia Foundation.

Shared experiences will help minimise the failures and amplify the successes.

The goals of the innovationXchange are to identify and incubate innovation in the development and delivery of aid programs, to support the acceleration of new innovation in this field,
promote collaboration and learning with global partners, and maximise the chances of scale-up of successful, transformational solutions to some of the more intractable development challenges.

The innovationXchange – with an initial budget of $140 million over four years – is also developing a diverse portfolio of investments, with likeminded partners to leverage our funds.

For example, the Global Innovation Fund - where we are partnering with the US Government, and Bay Area philanthropists including the Omidyar Network, as major donors.

Another initial project is a partnership with Bloomberg Philanthropies known as “Data for Health”.

This takes the strengths of the Bloomberg organisation of financial markets data collection, analysis and response and adapts it to improve health data collection and policy responses in developing countries.

In many developing countries in our region they don’t collect basic health data - for example they do not register births or deaths, much less causes of deaths and illness.

It is impossible to improve health outcomes without knowing the drivers of ill health and preventable death in a given country or community.

So our innovationXchange and Bloomberg Philanthropies will use mobile technologies in 21 countries to gather the kind of data that governments should have in order to develop better and more-informed health systems and policies.

Our Bloomberg partnership also includes Johns Hopkins University, the United States Centre for Disease Control and Prevention, and the World Health Organization.

Australia is contributing $20 million and Bloomberg Philanthropies is contributing $80 million. That’s my kind of partnership!

Michael Bloomberg is also on the International Reference Group of our innovationXchange along with a number of other global innovators.

One of the best ways that nations can build resilience and boost economic growth is by empowering women and girls.

UN Women reports that closing the employment participation and wage gap for women has the potential to deliver a global benefit of up to $17 trillion.

The World Bank has reported on the enormous economic benefits can be gained by investing in the education and training of women and girls.

This can be a complex and sensitive issue with difficult historical and cultural contexts in many countries. However innovative approaches must be found to break down these impediments to growth and progress through gender equality.

To achieve greater success in partnering with developing nations we must have a deeper understanding of the challenges. And that means for our people, for our communities in Australia, we believe they should be more Asia literate.

One of my pet projects as Foreign Minister is the New Colombo Plan, named after the original Colombo Plan which was a student study program implemented in the 1950s through to the 1980s which brought tens of thousands of young people from our region to Australia to study in our universities, gain a degree or a qualification from our higher education system and then return to their countries to help build the economic and social infrastructure.

Today as I travel throughout the region I’m struck by the number of presidents and prime ministers and business and community leaders who are original Colombo Plan alumni. What extraordinary ambassadors they are for Australia.

Well I have taken the spirit of that original plan and reversed it – so that now Australia is sending our young undergraduates out in their thousands to live, study and work in the countries of our region.

Thirty eight countries in the Indian Ocean/Asia Pacific are now partners with Australia in the New Colombo Plan and by the end of next year, just three years from its commencement, around ten thousand young Australians will have taken part in the New Colombo Plan.

This experience will enable them to gain the necessary insights and perspectives, spark their curiosity about our region, immerse themselves in another culture, attain relevant skills including language, and build networks and friendships that I hope will last a lifetime.

In this way we will have a more Asia literate workforce led by the young people who have gained an experience of living, studying and working in our region.

Ladies and gentlemen, I am delighted to be here because San Francisco is an important “Australian” city in its own right.

The best we can calculate is that you and the region host about 20,000 innovative and creative young Australians.

They are at the spearhead of nearly ten thousand Australian companies who do business in the United States. Many of them have production facilities here.

They are attracted by your centrality in global venture capital and your innovative spirit.

They are part of the 470 billion dollar Australian investment story – direct and indirect – in the United States - more than ten times what we invest in China and rising at the rate of over 10 billion dollars a year.

Since a Liberal National Government – and of which I was a part - signed the free trade agreement with the United States ten years ago, our economies have gradually blended. The TPP is going to drive that harder and higher.

Australia and the United States have forged a remarkable partnership – we are as close as two countries can be.

And together we can really make a difference to the life and times of people in our part of the world.

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