Friends of the United States, friends of Australia, I am delighted to be here this evening. My thanks to the partners of EY for hosting this evening.

I acknowledge that the American Chamber of Commerce in Australia – AMCHAM – makes a very significant contribution to Australia-US relations, and to strengthening business and investment ties between our two countries. I acknowledge Victor Dominelo, the New South Wales Minister for Innovation.

I have in the past month returned from two separate visits to the United States.

I have visited the States on 10 occasions since becoming Foreign Minister just over two years ago, and that will give you some indication of the fact that our two countries share one of the broadest, deepest and most diverse relationships that could exist between two countries and it traverses so many sectors and industries.

Washington and New York are always important destinations for me, however, I am also excited by the dynamism of the West Coast.

Recently I visited San Francisco, the Bay Area, Silicon Valley, and Los Angeles to discuss innovation in technology, finance, education and business, and this brought together so many threads of the Turnbull Government’s new policies.

Tonight I will outline the vital role that innovation plays in our economy and the importance that the Coalition Government attaches to it.

I will also discuss the ways that Australia and the United States are working together to pursue our joint prosperity in today’s global economy. In fact, right now AMCHAM members are in the middle of an innovation mission to California to learn how that State’s companies consistently outperform the rest of the world and may I congratulate AMCHAM for the priority it attaches to innovation and its commitment to share this knowledge among its members.

There has never been a more important time to focus on innovation and by that I mean capturing our creativity to build a stronger economy.

For the past decade or more, the global economic narrative has been about the mounting strength of emerging economies.

China, India, Brazil, Mexico and Korea have gone from strength to strength, lifting millions of people out of poverty and creating myriad opportunities for their people. It is apparent though that these economies have reached a pivotal point.

China’s economy is slowing and, as it slows, so does demand for iron ore and other commodities, with knock-on effects around the world and most certainly in Australia.

Increasingly, I believe the next surge in global economic growth will be driven, once again, by the United States and by Australia and other similar economies.

In Australia, over the past 20 years, the economy has grown at an average annual rate of 3.3 per cent, on the back of substantial economic reforms undertaken by successive Governments.

This has made us a top 20 country – our economy is the 12th largest in the world on a per capita basis but on every social and economic indicator that counts Australia is in the top 20, more often in the top 10.

Over the next 10 years however, growth will be more difficult to achieve as the mining boom comes off its peak, particularly in construction.

The Australia business community, led by the Business Council of Australia, argues that the next decade of economic growth in this country must be innovation led – this is a view also strongly held by the Coalition Government.

In fact, we believe that our future prosperity depends on the extent to which we can encourage and foster a culture of innovation.

As Steve Jobs said “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’ve led and how much you get it.

Apt words for a company and for a country - our people, our leadership, our insights.

The Australian economy has experienced a staggering 24 years of uninterrupted annual economic growth.

However, the forces shaping our economy and our world now are different from those of the past.

Global competition is intensifying as technological change is transforming, literally transforming, how we live and how we work.

Countries around the globe are re-evaluating their approach to pursuing prosperity.

Embracing innovation, and the international opportunities that are likely to drive growth, will be key.

Shortly after he became Prime Minister, Malcolm Turnbull appointed a Minister for Industry, Innovation and Science in Christopher Pyne, an Assistant Minister for Innovation, Wyatt Roy and a Minister for Science in Karen Andrews.

As Prime Minister Turnbull said ‘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’; and that ‘…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.’

Tonight I add that, if we are to achieve an enduring culture of innovation, we will need to work closely with our partners and our ally, the United States. 

Australia has no greater friend, Consul General, than the United States. Few countries share a closer partnership. Now while our strategic alliance is widely understood, what is often underappreciated – though I’m sure not by this audience I know – is the depth and breadth of the economic relationship between Australia and the United States.

Our two countries have a long history of working together bilaterally and in the region and globally to pursue prosperity.

Through direct and indirect investment, the United States,  its  companies and its investors have helped develop Australia’s mining sector into what it is today – a world leader and that’s what’s been driving our economic growth.

For example, the Gorgon natural gas project in our northwest is worth around $55 billion. It is one of the world’s largest natural gas projects and one of the most significant resource developments in Australia’s history. It is also half owned by Chevron, and quarter owned by ExxonMobil and Shell.

This and other major projects have made the United States our largest two-way investment partner. We could not sell the commodities to North Asian giants like China, Japan, South Korea were it not for the investment from the United States.

Significantly the huge gas processing hubs built in culturally and environmentally sensitive areas have driven innovation in the energy sector to new heights.

There are many other ways in which we can work together to propel an economic transformation. 

The US economy, as we know, is underpinned by innovation and is home to many of the world’s cutting edge industries, companies and technologies.

Australia has a history of innovation and invention and we can take credit for some of the world's best doctors and scientists and researchers who have been trained at our universities.

Australian scientists and researchers invented WI-FI (yes we did!), as well as the bionic ear, spray on skin for burns victims, sonograms and the black box flight recorder – it goes on. There have been many inventions over our history. But we can certainly learn from the United States when it comes to ways in which we can turn that research into greater commercial success.

That’s why I’m so pleased that AMCHAM is leading on this with your members in the United States right now, and EY - thank you for hosting us tonight - have been working consistently on promoting and harnessing innovation in Australia.

As part of my most recent visit to the United States I asked each of our diplomatic posts in LA, San Francisco, Boston and Washington to bring together Australian and American entrepreneurs, owners of tech start-ups and talented business people so I could talk to them about their successes, their failures, what they’ve learned and what Australia can learn.

What was immediately apparent was the large cohort of innovative and creative young Australians living in the US, and particularly in and around San Francisco, who are becoming leaders in their field.

They are attracted to the United States because of the easier access to capital, the innovative spirit, the open sharing of ideas and knowledge, which is such a feature of the West Coast in particular.

Nitro for example, was founded in Australia in 2005 by Sam Chandler.  He relocated to Silicon Valley in 2008 in order to scale up and tap in to a bigger market for capital and talent.

Nitro began as a PDF company that has grown to compete with Adobe and now has become one of the top three most successful technology companies operating globally. Today, more than 500,000 businesses around the world use Nitro, including over half of the Fortune 500. 

In San Francisco I met with Kate Kendall, an Australian entrepreneur who founded CloudPeeps – an online global talent marketplace that matches businesses with the world’s top freelancers in the community of content and marketing professionals. Smart Company recently named Kendall the most influential Australian on Twitter globally.

In LA, I met with Jodie Fox, Chief Creative Officer and one of three co-founders of Shoes of Prey. Launched in Sydney in 2009, Shoes of Prey was the first company ever to offer consumers the opportunity to design their own shoes online – a model so successful it reached multi-million dollar revenues within two years and there are now websites operating in five different languages.

Jodie was recently named by SmartCompany as one of Australia’s Top 8 Entrepreneurs to Watch in 2015.

In Boston, I caught up with Andrew Jaspan, the founder of The Conversation – an Australian digital media success story – which produces content, news stories and analysis written by academics and journalists from all over the globe.

Launched in Melbourne in 2011, it now has a global readership of 150 million and utilises the writing of 26,000 experts. The Conversation is also showcasing the quality of Australian universities to the world and building Australia’s reputation as a creative nation.

For many Australians who want to grow their businesses, moving to or operating in the United States is an attractive pathway to success.

One of the young Australian innovators with whom I met suggested that we shouldn’t worry about this as a “brain drain” but rather a “brain circulation” through which Australian entrepreneurs and talent were in his words ‘invading the world.’

In that spirit, we must harness the young people of Australia and they have a strong patriotism when they are overseas. They have a desire ‘to do something for Australia’ as they put it, by transferring knowledge, or developing a base at home or a network overseas for expanded entrepreneurship.

The Australian Government wants to create an environment where innovation can more easily flourish, where more investment can be directed towards start-ups and disruptive technologies – and where opportunities that capitalise on the extraordinarily diverse talent of Australians, in so many industries – can be showcased.

This is at the heart of our efforts to embrace an innovation agenda and an area where we want to work closely with the United States.

There are initiatives that the Australian government can pursue – specific policy, regulatory, and incentive measures – to help foster a critical mass of innovation.  We also have to be agile and nimble, and these aren’t words you use in relation to Government often – but we have to be agile and nimble in responding to opportunities.

Here is one early example; I had meetings with a number of the United States movie production houses to explore opportunities for more Hollywood blockbusters to be filmed in Australia. There were several films in the pipeline and if we didn’t respond pretty well immediately these projects would have been lost to more competitive locations.

The Turnbull Cabinet assessed the opportunities within days and two weeks ago, my colleague Mitch Fifield, the Minister for Communications and the Arts and I announced that the Government would offer a competitive tax treatment for one-off feature films to make Australia a more attractive destination as a location in the film and production industry and to bring investment from international film and production houses to Australia.  

As a direct result, Twentieth Century Fox will now be filming Sir Ridley Scott’s yet-to-be-titled Alien film here next year and Disney/ Marvel Studios will bring ‘Thor: Ragnorok’ to Australia and it just so happens to star our very own Chris Hemsworth. Thank you ladies again!

This is proof of first, the Government’s agility in seizing opportunities - this issue had been around in Treasury for a very long time - but also the quality of Australia’s facilities, and our leading industry experts, and our outstanding creative talent, our diverse landscapes (and the dollar helps), this further highlights the integration of the Australia and US economies.

Combined, these two movies are expected to bring more than $300 million in offshore investment to Australia’s economy, directly employ over 3,000 Australians and use the services of over 6,000 Australian businesses.

So we are actively looking for more opportunities like these, in order to drive growth across our creative economy.

Innovation is at the heart of the Australian Government’s international and domestic agenda – and an Innovation and Science Policy Statement will be released shortly, most certainly before Christmas.

The Government knows that innovative businesses in Australia are twice as likely to export, to increase productivity, as well as to drive employment and training opportunities, and five times more likely to increase their number of export markets.

So our policy will contain ways for start-up companies to use crowd funding to attract investment which will make it easier for them to obtain funding to get their ideas off the ground and to turn them into reality. All technology starts with an idea, and a spark in the mind of an original thinker is one thing, but once it is created it has to be sold.

Other measures the Government is considering include R&D concessions for businesses which collaborate with universities to develop ideas, and tax breaks designed to foster closer co-operation between business and science.

The Prime Minister’s Digital Transformation Office will embrace technology in ways that will make the government sector more efficient and effective. Partnering with the private sector will be essential.

The innovation and science agenda will be a game changer in Australia's understanding of the role that science and research can play in innovation and in creating the jobs of the future, growing the economy.

Innovation is a whole-of-government issue and even in my portfolio of foreign affairs I’ve long held the belief that innovation is vital for us to have impact.

In particular, innovation in the aid area, in development assistance this has enormous potential and is another area where we are working closely with the United States.

It is no longer sufficient to address development challenges using only traditional methods of aid delivery. I call it the ‘new aid paradigm’ and I’ve placed a heavy focus on innovation in our aid program, and working with the private sector to transform our thinking and our doing in this area.

Millions of people in our immediate neighbourhood live in poverty and this is obviously a key focus for us but I’ve created the innovationXchange. This is an innovation hub, which I launched earlier this year within the Department of Foreign Affairs and Trade. I was in fact inspired by a visit to Stanford a number of years ago and sat in on one of their entrepreneur classes within the School of Business, and the project for the students was to tackle an aid challenge in Africa. It was a water and sanitation issue and students were given 12 months to come up with an enduring solution and I thought if this is in the School of Business why isn’t it in our aid program?

The innovationXchange is a $140 million investment and is based on the principle that innovation and new partnerships hold the key to finding solutions to many of the world’s most entrenched development problems, intractable problems that have evaded resolution for decades.

So our innovationXchange takes a problem, comes up with ideas, starts with a blank sheet, tests them and if they work  we scale them up and if they don’t we admit they failed and we don’t spend any more money on them. That’s not what governments normally do.

One of the foundation investments of innovationXchange is what we call the Global Innovation Fund – this was a global call for the best social innovations that have the potential to be transformational in the aid area. Let’s find out what everybody else is doing and pick the best that could be applied to our region.

Australia and the US Government, together with philanthropists such as the Omidyar Network, are major donors.

The innovationXchange is also partnering with Bloomberg Philanthropies for our Data for Health project, which is bringing Bloomberg’s agile and efficient ways of working plus its technologies to our region.

Too many nations do not currently collect basic health statistics. They don’t count births, they don’t record cause of death or any other vital health statistics. Yet billions of dollars have been injected into these nations for the purpose of preventing or treating health issues, but without the evidence base needed to target the funding.

The partnership will use mobile technologies in 21 countries, a census if you like, to gather the kind of data that governments need to target funding and develop better and more-informed health systems.

I am assisted in choosing our projects by an International Reference Group and it includes Michael Bloomberg, who hosted us in New York recently, Chris Vein of the World Bank in Washingont, Sally Osberg of Skoll Foundation, Tara Nathan of Mastercard – all from the United States and they are assisting us with representatives from other countries in our work.

Let me give you an example of the kind of solutions we are working on. In the remote highlands of Papua New Guinea, basic medicines and pharmaceuticals were not reaching the health clinics. Women were dying in child birth, there were shortages of basic drugs and there was apparently no way for the Government in Port Moresby getting drugs and pharmaceuticals to these remote places in a timely fashion. Yet, in the village every young kid had a can of Coke. So we are now working with the private sector, we are now tapping into their distribution networks, their supply chains, their trucks going up into the mountains. Pharmaceuticals and drugs are being delivered in a timely fashion to these remote areas.

I’m encouraging innovative thinking across my portfolio and particularly seeking to nurture any opportunities that exist between Australia and the United States.

Another example is the way we have changed procurement. We used to put out our aid programs to tender for in-country NGOs to deliver the programs. According to Australia’s procurement rules there would be documentation about this thick to fill out every single aspect and detail of the project was specified to the nth degree. On average we’d get about six organisations or entities tendering for an Australian aid project to be delivered in our region. I turned that all on its head, the Auditor-general signed off, this is how we are going to do it – we’ll say this is the problem, these are the dollars available. You tell us what we should be doing. That was the tender. We got 70 applications from the private sector, from entities that had never thought of delivering an aid project in the region, from consortiums, from a whole range of people who came up with some amazing ideas. All wisdom does not reside in Government.

In order for us to work more closely with the United States, I have elevated G’Day USA to Australia’s premier economic and public diplomacy program in the United States and to be the key platform for us to showcase Australia’s creative and innovative economy and society.

G’Day USA has been around for about 10 years. It is a year-long program of events across the US that brings together public and private sector individuals, it brings together companies, consumers, corporate leaders, policy makers, media, academia from both countries across the arts and culture, innovation, defence industries, fashion, film and many other sectors. This will now be our premiere soft power diplomacy initiative in the United States.

Last month, I attended the inaugural G’Day USA Los Angeles Fashion Week Showcase which showcased Australian fashion designers to the Los Angeles fashion and entertainment media.

The best of Australia’s creative economy were making their mark in the highly-competitive US market.

The fashion industry in Australia employs over 220,000 people directly and is worth $12 billion each year to our economy and our designers are considered amongst the best in the world they just need a platform to showcase their abilities.

G’Day USA events planned for the coming months in New York, Washington, Los Angeles, San Francisco, Chicago and Houston will promote Australia as an innovative, sophisticated trade, investment, research and defence partner as well as a tourist destination and cultural hub.

G’Day USA showcases the capability of both countries, provides a forum to discuss opportunities and challenges presented by innovation and disruptive technologies.

These events will help expand our countries’ business-to-business relationships that propel our economies even closer together.

Ladies and gentlemen, to prosper in today’s increasingly competitive global environment, we must create a more agile and creative economy.

Sharpening our focus on international opportunities – whether it be through encouraging liberalised trade – we are delighted that the Trans Pacific Partnership has been negotiated – we look forward to it being embraced and brought into force, or whether it is about diversifying and growing two-way investment, or harnessing Australia’s talented industries and people. These are all vital to sustain and encourage an innovative economy.

We want Australians to be empowered to think creatively, to problem-solve and to drive innovation across the economy.

We must ensure Australian business is positioned to capture the incredible opportunities on offer.

It is the spirit of entrepreneurialism, seeking new opportunities and welcoming and embracing young, rising talent which makes Australia and the United States natural partners when it comes to innovation.

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