The not so clever country !

In an election year, expect desperate logic to prevail over common sense when it comes to attracting votes.   The Federal government is implementing a scheme it hopes will pressure projects to source materials locally and employ more of the Australian work force.   This will be " optional "  and  there will be no legal obligation to comply.

More controversial is a plan to create  ten " Industry Innovation" precincts manned by technology experts and government agencies.   These will be tasked with creating business opportunities.  This will have a budget of one billion dollars - but at a cost of ceasing tax write offs for research and development undertaken by companies with a turnover of $ 20 billion or more.

So it seems we are shutting down the " R & D " component of our biggest companies and replacing it with a new bureaucracy which knows nothing about marketing.   The decisions on what constitute " good business opportunities " by way of proposed new products will be taken by a bevy of departmental heads and bureaucrats who know absolutely nothing about the world of business innovation.

Some wit once observed that a " camel is a horse designed by a committee ".  This " committee " approach to R & D is a recipe for disaster.  Not only will research be directed into avenues that seem interesting to bureaucratic minds, but the real work of the companies at the forefront of innovation will wind down as soon as those tax write offs are withdrawn.

A cessation of R& D costs as a tax deduction will certainly ensure that GM abandon further models of the Commodore in Australia.   All new products need R & D research to reach cutting edge status and it is a cornerstone of business that such R & D costs are balanced against the profits that accrue from the resulting finished product.

It seems to be a fact of life that governments lack the skills to be clever innovators  in getting things done. Their plans move ponderously and slowly and this is directly opposite the innovative approach of the business world, where experience makes the difference in deciding whether a plan or product will gain public acceptance - and therefore make money.

This new approach is aimed squarely at the voters.   It may seem like a good idea to those who lack an understanding of how the business world works, but a " committee " approach ignores the need for R & D to be carried out behind a veil of secrecy.   Manufactures closely guard new products and new innovations until they are ready to be launched on the public.  A breach of security can give a competitor an inkling of what is coming - and in a world of trade secrets - the advantage of surprise is paramount.

Most governments leak like a sieve - and the same can be expected from these  " Industry Innovation Precincts ".   If this idea comes to reality, " the lucky country " may morph into being " the not so clever country ".     Messing with R & D is not a good idea !   There seems to be a connection with Geese that lay golden eggs !