Structure of the Presentation Current state of foresight/strategic intelligence Unusual Case 1 – structural priority-setting Unusual Case 2 – thematic priority setting The role for quantification Conclusions

Current state of foresight/ strategic intelligence A climate of urgency to address the future Increased adoption at many levels and in many forms Varied roles: an expert-based policy informing tool; an integral part of policy processes, operating by forward looking strategic support to informing and co-ordinating functions; a pacemaker through capacity building for policy intelligence a tool for impact assessment.

Structural priority-setting in the Australian Innovation Review http://www.innovation.gov.au/innovationreview

The Review’s Perspective on Innovation Innovation is commonly described as “creating value by doing things differently”. From this viewpoint we can only identify innovation after the event. If we are going to influence innovation outcomes we need an active appreciation of the dynamic processes associated with innovation that lead to change. Thus the focus should be on innovating and being innovative.

The Context of the Review change of Government after 11 years a series of reviews of education, universities, industrial relations, the federal system of government, the tax system, emissions trading, the auto and TCF industries, and the CRC program declining investment and performance, particularly in the past 5 years: A decline by 25% of Govt funding for R&I as % of GDP Investment in education declined as a % of GDP while other OECD countries were massively increasing theirs Zero increase in multi-factor productivity

A Systems Approach The Review takes a systems approach to understanding Australia’s innovation performance and challenges. This means treating all the elements of the innovation system as a dynamic and interconnected whole, not just concentrating on single components.

Issues for Submissions Can we imagine a better world? Are we asking the right questions? How do we solve the big challenges we face? Could we do everyday things better? How do we make it easier for people to apply ideas in novel ways? How do we educate our people to be more creative?

The Strategic Intelligence Component Not a formal foresight process Extraction of views of a desired future contained in >700 submissions Interpreted through the experiences and a strong vision of the Committee of Review Projection of a series of structural targets

Structural targets (quantitative) Total factor productivity growth >2.5%pa >40% of employees with tertiary education 50% of firms produce new-to-market innovations pa 70% of firms produce non-tech innovation pa Firm collaboration with PROs >50% Firm collaboration with HEIs >30%

Thematic priority-setting via the CSIRO Flagship Program http://www

National Research Flagships the largest scientific research programs ever undertaken in Australia – with total investment to 2010–11 of more than $1.5 billion Flagships recognise that complex large-scale challenges require sophisticated cross-boundary responses that can only be delivered by bringing together the best and the brightest from across the Australian innovation system Focused on major national priorities Focused on outcomes. committed to delivering research solutions that target clearly defined goals They have a larger scale, longer timeframes and stronger focus on adoption of research outputs than other programs

Nine Flagships Energy Water Health Light metals Oceans Food Climate adaptation Minerals Niche manufacturing (nanotechnology)

Energy Transformed Flagship Goals: To halve greenhouse gas emissions double the efficiency of the nation’s new energy generation, supply and end use position Australia for a future hydrogen economy by 2050

Some Activities SolarGas™- a new energy source which contains 25% more energy than the natural gas used to feed the process Post Combustion Carbon Capture Enhanced Coal Bed Methane extraction The Ultra Battery Responsive intelligent distributed energy network Distributed generation CO2 sequestration in coal CO2 behaviour in deep saline aquifers

The Crucial Steering Mechanism - The Energy Futures Forum The Energy Futures Forum brings together Australia’s energy and transport stakeholders to identify plausible scenarios for energy in 2050 and their implications for the nation’s energy future. Stakeholders included energy suppliers, generators, distributors, major energy end-users, financiers, government and community representatives. Eight scenarios were developed from a base case with variants incorporating nuclear, renewable energy, distributed energy and ‘deep greenhouse gas cut’ scenarios.

The Role for Quantification in Foresight – important qualifiers Quantification does not provide greater truth or precision unless the supporting theories and models adequately reflect underlying structures and relationships Processes (like foresight) are largely defined in qualitative terms eg management, strategy, but can be supported by metrics

Some Quantitative Approaches being used in Foresight Process and decision-models embedded in software eg scenario generation Simulation tools Complex adaptive systems modelling Cross-impact analysis Gaming Data mining Impact evaluation

Conclusions Foresight/strategic intelligence processes, tools and applications are multiplying Practice is far in advance of an adequate theoretical conception There is need for both radical and incremental development of both qualitative and quantitative approaches