High Impact Project Update: Quantifying Regional Innovation project

Innovation lightbulb

Critical economic challenges face us. Climate change and the lasting impact of the pandemic are putting pressure on the economy and destabilising the status quo. Something that can help address and mitigate the impact of these problems is innovation.

Quantifying innovation is important but difficult. Innovation is not just the invention or improvement of a new product or service, it’s also a measure of how successfully the product or service was implemented or introduced into the market. Developing a clear measure of innovation allows for evidence-based policy and enables targeted interventions based on industry structures, strengths, dynamics, and knowledge capabilities.

In response to the COVID-19 pandemic, the Australian Government committed to improving the nation’s manufacturing ability, aiming to boost Australia’s competitiveness through building innovative industries that are fully integrated into global supply chains. The key to achieving this is through the innovative capabilities of Australia’s regions.

Dr Andreas Cebulla is leading the Quantifying Regional Innovation project, which is funded by AURIN’s High Impact Project program. This project will develop a measure of innovation, regional specific growth opportunities, industry strengths and capacities. The project team will also develop a web-based open source tool for visualising, comparing and downloading regional innovation data, and will produce new CC licenced datasets, including:

  • Level of innovation for SA3s in Australia (2011 and 2016)
  • Industrial comparative advantage for SA2s in Australia (2011, 2016 and 2021 upon release), derived from ABS Census data
  • Knowledge capability for SA2s in Australia, derived from patent data
  • Industrial growth opportunities for SA2s in Australia (2011, 2016, 2021)

Dr Cebulla and his team will aim to use a Structural Equation Modelling (SEM) approach to create a variable to measure innovation, based on typical indicators of innovation. Possible indicators include:

  • Patents, trademarks, designs and plant breeder rights
  • The number of employees in knowledge intensive business services
  • Non-school qualifications of workers (e.g. any educational attainment other than primary or secondary education level)
  • Business expenditure on R&D
  • The number of TAFEs, universities and research institutes within ABS SA3 regions

The web-based open-source tool will be developed in a way that allows future inclusion of other economic, employment and industry indicators. Potential indicators could be business statistics, labour market status and human capital. The tool will be upgraded, through web-based automation techniques, as new data is made available.

Six months into the project the team has completed and delivered three datasets. These datasets will enable the AURIN community to identify areas of innovative strength and potential growth opportunities. The completed datasets are:

  • Industrial Comparative Advantage dataset for SA2s in Australia, derived from the ABS Census data for industry of employment (by place of work) for 2011 and 2016
  • Knowledge Capability dataset for SA2s in Australia, derived from the Intellectual Property Government Open Data on patent applications, trademark applications, designs, and plant breeders’ rights
  • Industrial Growth Opportunities dataset for SA2s in Australia, which links the Industrial Comparative Advantage dataset with the Australian Industrial Transformation Institute’s state-based model of economic complexity to identify product development opportunities for SA2.

The Quantifying Regional Innovation project is an AURIN High Impact Project (HIP). Through the HIP program, AURIN engages with Australian urban, regional and social planning communities—including researchers, planners and policy makers from academic, government, NGO/NFP and private sector organisations—through collaboration and co-investment in high-quality, high-priority, high impact projects.

The Quantifying Regional Innovation project will deliver new datasets, tools, services and demonstrate the value and potential of its use within the existing AURIN Platform. This project will enable a deeper understanding of the capabilities of regional innovation, allowing researchers, government and industry to build economic resilience and business growth.