The Smart State vision: using knowledge to drive economic growth
The Queensland Government’s Smart State Strategy is about positioning the Queensland economy as a modern knowledge economy, recognising that knowledge, science, research, education and innovation are key drivers of economic growth.
In modern economies, new jobs and growth in incomes are increasingly linked with information, knowledge and innovation – applying new ideas, research, inventions and new technologies to industry and the wider economy. Studies show that strategic investment in R&D and associated skills (human capital) has delivered high returns to countries, business and investors. They also show that productivity improvements in government, business and industries are directly related to the use of new technologies such as ICT.
The Australian economy has performed well over the past six years relative to the rest of the developed world and Queensland has outperformed other states as Australia’s growth state, recording the fastest economic growth and productivity growth.
Traditionally Queensland’s strong economic performance came from the State’s commodity-based industries such as mining and agriculture and the State’s rapidly growing population. However, the major source of Queensland’s economic growth in recent years has been the increased productive capacity of Queensland’s workers, reflecting smarter use of the State’s resources and knowledge base.
Little more than a generation ago, Queensland was a modest player in research and scientific innovation, relying heavily on commodities and population growth to drive the economy.
Queensland is now a major force in scientific innovation in the Asia-Pacific region. Today, some of the world’s leading science and technology organisations are collaborating, investing and establishing operations in Queensland to take advantage of the State’s highly skilled workforce, low business costs, competitive tax regime, rich and unique biodiversity, excellent environmental and resource management, and advanced research and education infrastructure.
In the five years to 2002-03, Queensland’s Gross State Product (GSP) grew by 5.1% per year compared with 3.3% per year for the rest of Australia. Queensland’s labour productivity growth was 2.9% per year compared with 1.7% in the rest of Australia. Two thirds of the difference between Queensland’s economic growth and the rest of Australia between 1997-98 and 2002-03 resulted from greater productivity derived from innovation, increased capital investment and improved workforce skills. |
Emerging industries such as ICT, biotechnology, nanotechnology and new media are generating new and higher paid jobs, while traditional industries such as tourism, mining and agriculture are embracing new ideas and technologies to improve their international competitiveness.
One of the primary drivers of higher productivity and real incomes in Queensland has been growth in innovation activity. Queensland has recorded growth in nominal business R&D expenditure of around 50% since 1997-98, compared with less than 30% growth in business R&D in the rest of Australia.
The Queensland economy is transforming with rapidly expanding manufacturing and service sectors and a shift in activity towards technology intensive industries. A key example is the proportion of value-added goods, such as processed minerals and metals, manufactured goods, and services in Queensland’s total overseas exports.
Over the past five years, 36.7% of our overseas exports have been value-added goods, expanding from 34.8% in the previous five years. In contrast, the proportion of value-added exports declined for the rest of Australia in the same time period.
Queensland’s exports have increased by $6 billion over the past six years to $30 billion. This accounts for almost a quarter of Queensland’s economy.
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Since 1998, the Queensland Government has facilitated the establishment of 61 major companies to Queensland, including:
Citibank - GE Medical
Macquarie Bank - Creative Assembly
Cloud Nine - Raytheon
Qantas 767 Maintenance - Capral
National Jets - Sequenom
Oracle - IBM
Government agencies are also in the innovation business, applying new technologies to public services such as law enforcement, education, training, health and transport and helping Queensland’s workforce to develop the skills to compete in the information age.
Enabling technologies provide the opportunity to transform existing industries and develop new ones. |
ICT is a prime example of a critical enabling technology, driving productivity and economic growth economy-wide. The Organisation for Economic Cooperation and Development (OECD) has identifed Australia as a key example of economic growth driven by a strong ICT component and, along with Canada and the United States, we lead the world in the uptake of ICT.
Queensland leads most of the world in business and household use of computers and the internet. In 2003, 65% of Queenslanders had a computer at home (up from 57% in 2002) while 52% had access to the internet (up from 42% in 2002). No Australian state has a higher business usage rate for computers (85%) and the internet (73%).
Queensland’s established industries, such as mining, are achieving high productivity growth through ICT. Mining is one of the largest export earners for the State with $12.1 billion in 2001. Over 65% of world mining operations use software designed by Australian firms. Queensland firm Mincom is the single largest provider of mining ICT solutions in the world.
Nanotechnology is another emerging enabling technology. Nanotechnology, or molecular level engineering, enables us to manipulate individual atoms and molecules, making it possible to build machines the size of human cells or create materials with desired properties. It is predicted to have a similar impact to ICT, biotechnology and advanced materials as a platform for improving the way almost everything is designed and made.
Nanotechnology has the potential to create revolutionary new products and processes; make products and processes smaller, cheaper and more environmentally friendly; create new industries and opportunities; create exciting new job opportunities; as well as helping existing industries to improve their international competitiveness through improvements in processes and products.
The nanotechnology industry in the United States is worth an estimated $US45 billion a year and is expected to grow to $US225 billion a year by 2005.
The Queensland Government’s $20 million investment in the new $50 million Australian Institute for Bioengineering and Nanotechnology (AIBN) at the Queensland Biosciences Precinct at the University of Queensland in Brisbane will help develop one of the largest research and development clusters in nanotechnology in the Southern Hemisphere. The AIBN alone will house over 200 scientists by the end of 2005. About six new firms have been created to date, employing 50-60 people. Further start-up companies will evolve over the next year.
The AIBN is already establishing a reputation in research excellence. It includes three highly prestigious Australian Research Council (ARC) Federation Fellows (Professors Max Lu, Matt Trau and Anton Middelberg), a National Health and Medical Research Council (NHMRC) Senior Principal Research Fellow, and has attracted funding for the ARC Centre for Functional Nanomaterials, as well as a large number of ARC, NHMRC and industry project grants. The AIBN will also play a key role in postgraduate research training.
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| Professor Peter Andrews Queensland Chief Scientist |
Queensland Chief Scientist
The Premier appointed Professor Peter Andrews to the position of Queensland Chief Scientist in December 2003. The Chief Scientist provides strategic advice to the Government with the aim of:
- maximising the economic, social and environmental returns on the Government’s investment in science, research and innovation
- raising the profile of Queensland science and innovation
- ensuring that R&D funds are directed in accordance with Queensland Government policy and priorities.
Queensland R&D Priorities
The Queensland R&D Priorities and Funding Principles were announced in 2003 to guide the Government’s investment in R&D. All Queensland Government departments are implementing the priorities, which will be outlined in the Queensland Chief Scientist’s first annual report on the State of Science in Queensland in December 2004.
The Queensland R&D Priorities are:
- Enabling technologies
- Environmentally sustainable Queensland
- managing climate change
- sustainable Queensland coastlines and Great Barrier Reef
- Food for the future
- Safeguarding Queensland
- Sustainable health
- Tropical futures
Biotechnology is one of Queensland’s fastest growing industries. Queensland’s biotech companies represent 18% of the national total, generate 22% of Australian industry turnover, and attracted over a quarter of all venture capital funds invested in Australian biotech companies in 2002-03. More than 1800 Queenslanders are employed in more than 50 organisations, companies, research organisations and service providers in Queensland’s biotech sector.
Queensland’s biotech industry is targeted to grow to $5 billion in market capitalisation, $1 billion in annual revenues, and 2500 in direct employment by 2010. By 2025, the industry could boast $4 billion in annual revenues, $20 billion in market capitalisation, and 10 000 in direct employment.
Queensland Biotechnology Advisory Council
The Queensland Government continues to benefit from the Queensland Biotechnology Advisory Council’s independent strategic advice on biotechnology issues. In April 2004, the Council delivered a report to the Government, Queensland Biotechnology – Strategic Directions. The report makes key recommendations to build on the strengths of Queensland’s biotechnology industries and the opportunities they provide, while addressing the structural challenges facing Queensland’s bioindustries.
Total ICT employment increased by 25.3% between 1998 and 2003 (compared with total employment growth in the State of 11.8%). The fastest growing sector, computer services, achieved over 48% growth, and currently generates 15 130 full-time equivalent jobs.
Queensland Bioindustries 1999-2004
In response to the Queensland Biotechnology Advisory Council’s report, the Government released its Queensland Bioindustries 1999-2004 report in June 2004. This report reviewed the progress of the State’s biotech industries and provided growth strategies under four priority action areas: consolidating critical mass in research; driving economic returns from research; building international links; and creating a positive business environment. $9.8 million was announced for new initiatives to assist biotech industry development.
Queensland ICT Growth Strategy
Queensland’s ICT industry employs some 56 000 people in 3700 businesses with $14.6 billion in annual sales revenues and $850 million in exports. It is a larger employer than Queensland’s mining sector and employs half as many people as Queensland’s primary industries (agriculture, forestry and fisheries). Queensland’s ICT industry is growing faster than the national average and is targeted to grow to 64 000 jobs, $17 billion in sales revenue and $1.2 billion in exports by 2008.
Later in 2004, the Government will release a four-year growth strategy for Queensland’s ICT industry. The strategy will include new programs to promote ICT industry development to build on the Government’s existing $109 million investment in ICT training and R&D.
Last reviewed 19 January 2006