A business tax incentive that enforces an annual $150 million spending cap on research and development will not support the innovation needed to lift productivity in Australia, the QUT Business Leaders’ Forum has heard.
Cochlear Chief Executive Officer Dig Howitt said lifting the cap should be a top agenda item at the federal government’s Productivity Summit in Canberra this August.
“Effectively what we’re saying to the world is we’d like you to spend $150 million each year on R&D in Australia but please don’t spend any more,” Mr Howitt said.
“Please go and spend the rest somewhere else in the world. I mean that makes no sense. One thing we’d like to see is to lift that cap and aim for bigger R&D in Australia.”
Queensland business and academic leaders attended the QUT Business Leaders' Forum to hear how an engineer rose to become CEO of an Australian invention that is now a $17 billion ASX-listed global powerhouse in hearing technology.
QUT Vice-Chancellor Professor Margaret Sheil was among the 350 attendees and said a stronger focus on R&D funding was needed to unlock innovation and lift Australian productivity.
"One of the key elements of the success of Cochlear is the funding support for both the initial research but also government grants at critical stages of the commercialisation," Professor Sheil said.
University of Melbourne Professor Graeme Clark AC pioneered the Australian cochlear implant with support from a range of R&D grants. But its commercialisation by medical device industry pioneer and entrepreneur, the late Paul Trainor and his team, along with a $5 million federal government grant, saw the Australian invention become the world’s first commercially available multichannel cochlear implant for adults.
Cochlear Ltd implants have since benefited close to one million people around the world and the Australian-based company now holds over 50 per cent of the global cochlear implant market.
Mr Howitt graduated from the University of Sydney with an honours degree in Electrical Engineering before moving to America and joining Stanford University to study an MBA at the beginning of the internet boom.
“I was at Stanford in the mid-1990s which was (at the start of) the Netscape IPO, Yahoo was just forming on campus and eBay was started by someone in the year ahead of me,” he said.
Mr Howitt worked for Boral in America before returning to Australia to take up a position as head of Sunstate Cement, part of a personal drive to apply his business knowledge to a product-based enterprise.
In 2000 he applied for an R&D management position within Cochlear and went on to become CEO in 2018.
“It’s the nearest thing I’ve had to an engineering job,” he said.
“I was taken by the coolness of the technology upfront. But then I very quickly got to see the impact of the technology on people’s lives.”
The Australian company has now expanded into 180 countries.
“Hearing loss is one of the most prevalent medical conditions and one of the least treated in the world. We need to take hearing loss more seriously.”
Respected Australian journalist, QUT Outstanding Alumni and forum moderator, Ellen Fanning, steered Mr Howitt through his leadership journey, but commented early on the large volume of questions submitted from the audience both at The Star Brisbane venue and online.
“I’ve never seen so many questions come through for a speaker so quickly,” she said.
A current QUT engineering student asked how an electrical engineering degree prepared Mr Howitt for a career in business.
“Great question,’’ Mr Howitt said. “A good engineering education is all about systemic problem-solving. How do you solve problems at a systemic level. That’s what my job is. So it’s a great background for business.”
Mr Howitt said there were no fundamental barriers to Australia building world-leading businesses as long as the commitment to innovation strengthened.
“Australia has a huge capability and ability to innovate here. Australia can build global businesses and a number are coming up now. So we’re absolutely capable. I think it is just one of those things that needs perseverance and the resilience and the commitment to keep going.
“And along with that, it’s not being scared of failing. Failure is the opportunity to learn. We don’t always work that way here.”
The QUT Business Leaders' Forum has been showcasing the careers and business acumen of Australia's most prominent leaders for more than 20 years, including Suncorp Group Chair Christine McLoughlin AM and Australian Grand Prix Corp CEO and former Gold Coast Suns CEO Travis Auld.
The next QUT Business Leaders' Forum will be with Brisbane 2032 President Andrew Liveris AO at The Star Brisbane on Wednesday 17 September.
Main picture: QUT Chancellor Ann Sherry AO, Cochlear Ltd CEO Dig Howitt, QUT forum moderator Ellen Fanning and QUT Vice-Chancellor Professor Margaret Sheil AO
QUT Media Contact:
Debra Bela, 0412 417 552, media@qut.edu.au
