27/05/2014 09:46 BST | Updated 24/07/2014 06:59 BST

Australia Needs a Killer App

How do you develop a culture of innovation? This is the question vexing governments the world over as they struggle to harness the potential of changes in the global economy and seize the opportunities of technological and biomedical advancements.

My own country, Australia, provides an excellent illustration. With the re-emergence of the Asian economies in what we now call the Asian Century, we are confronting the loss of industries such as automotive manufacturing and the almost weekly cycle of companies shifting part or whole operations offshore to take advantage of cheaper labour, better regional proximity or a mix of both.

Attention is increasingly turning to the question of how we compete and maintain our relevance in this new world order. And if we can't compete, how do we take advantage of other strengths in innovation and research and development and make those the cornerstones of our country's transformation to a knowledge-based economy?

After all, throughout our history, Australia has had some amazing innovation successes, from the development and commercialisation of the refrigerator in 1856, zinc cream in the 1940s and black box flight recorders in 1958 through to spray on skin, the cervical cancer vaccine Gardasil and the world's first quantum bit.

But how many of the people, the companies and the Intellectual Property behind these innovations actually stayed in Australia, and for that matter how many Australians even realise that these globally significant innovations have their origins in Australia?

And how many frustrated ex-patriot Australians (with nascent American accents) would concur with this article?

At home, much of the economic debate over the past 12-months has been about transition; the tapering of the mining investment boom and the all too slow growth in the non-mining sector. Just recently we saw the release of a consultation paper on a proposed Exploration Development Incentive, which will allow junior mineral exploration companies to distribute exploration losses to investors. It is a move designed to make it easier for junior explorers to raise capital. But it is yet to be matched by a wave of consultation papers on visionary new policies to stimulate investment in innovation capable of spawning the world's next 'game changer'.

A 2013 report commissioned by Google states that Australia's technology start-up sector has the potential to contribute $109 billion to the economy and create more than 500,000 jobs by 2033. That's the definition of a knowledge-intensive economy supporting the high paying jobs of the future, yet there is precious little evidence that these recommendations are being taken seriously by governments, at any level, let alone implemented.

When you speak with technology start-ups in Australia it doesn't take long before the conversation quickly turns to why so many amazing technologies have their humble beginnings in Australia but end up overseas, and more often than not, in the United States.

The answer, too often is simple and logical - the US, particularly Silicon Valley in California, is where you find the expertise and networks, the risk-takers, the incentivising policy settings -- and the money. In 2013, venture capital funding in the US was about $17 billion. In Australia, it was in the tens of millions.

Technology companies are probably better at thinking globally from day one than a lot of other small Australian innovators - but this is where we need to be. Australia needs to innovate but it shouldn't think that it competes with other Australian start-ups, it now competes globally, just as equally with the company down the road, the firm interstate and the new start-up half way around the world.

And I know this is not an Australia-only issue. It is being confronted in many an industrialised or emerging economy transitioning from resources and traditional manufacturing to a knowledge intensive and higher value add basis.

From Toronto to Tel Aviv, Santiago to Singapore - competition is fierce.

Coming up with the policy innovation which nurtures the commercialisation of the next game changer invention may itself be Australia's killer app.

Alex Malley is chief executive of CPA Australia