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- SMART STATE -

The opening of a Smart State biotech laboratory with a mere 5 year life-span was described as a short-sighted political stunt', CM, 21/4/06).

Queensland Government has recorded losses on at least half of its biotechnology investments over the past 5 yeasr (Ludlow M. FR, 22/7/05).

New infrastructure for drug and medical research were announced by Queensland government - as well as establishment of 19 member committee of science, education and business leaders to advise government on future directions for Smart State policy (Livingstone T. and Viellaris Renee 'Science research funding gets Smart State boost', CM, 22/6/05).

A group of 19 leaders in science, technology, medical research, education and capital raising has been formed to chart the future direction of Smart State initiatives. This group would be led by chief scientist (Peter Andrews) and meet four times annually. It will form standing committee of larger group (Smart State Council) whose role will be to provide strategic advice to government to guide and accelerate Smart Queensland policy. The Council which will meet twice per year will be chaired by premier and include: Treasurer (Mackenroth); Education Minister (Bligh); Employment, Training and IR Minister (Barton) and State Development and Innovation Minister (McGrady). The goal of the new bodies is to set new trends and create new jobs. They need to be Smart State futurists, examining worldwide trends to ensure that Queenslanders can benefit. Members were selected for their commitment to Smart State concepts, their ability to think strategically, their professional success and their knowledge / experience. They would advise government on: opportunities for developing knowledge based industries; important domestic and international developments in science, technology, engineering and skills formation; measures to overcome impediments to achieving Smart State goals. It will be innovators and those who quickly take up new technology who will create the jobs of the future (Livingstone T. 'Science chiefs to plan tech future', CM, 22/6/05).

Queensland's largest universities have expressed support for Smart state extension. The Opposition Leader argued that it took Smart State beyond rhetoric (Cole M 'Extended plan wins university support',  CM, 19/4/05).

There will be unprecedented investment in research and technology in Queensland under $473m extension of Smart state. $200m has been committed to improved facilities to support scientists, and leading edge research. Innovation is seen as important to Queensland's future. The focus on science on biotechnology will continue - but there will be a $127m investment in education also.Businesses in traditional areas were also targeted ($51m for water conservation; $20m for mining; $7m for ethanol). University bosses and the Opposition welcomed proposal - but Liberal Party leader said there were no benchmarks for success so it was hard to tell if program was working. Premier suggested that success could be measured by new facilities constructed, research funding and jobs created. Smart State has already created 5000 jobs in aviation, 2000 in biotech and expanded education exports from $475m to $1bn. The brain drain has also been reversed (Cole M 'Policy to nurture research work',  CM, 19/4/05).

A $127m overhaul of Queensland education makes it into a foundation of phase 2 of Smart State - involving boost in learning for batter students and more information for parents.  Reforms also cover training (a review of TAFE), R&D, agriculture and mining.   (Odgers R and Balough S., 'Reforms aim for smarter education',  CM, 18/4/05).

Queensland is at risk of becoming a technological and educational backwater - because of failure to invest in research and skills - according to advice to Cabinet. Paper warns of significant economic challenges - despite good present conditions. Risks lie in over reliance on finite resources and R&D levels well below developed world. Good employment situation is threatened by cheap-labour competitor nations. This is part of second round of Smart State strategy - which will involve large investments in developing innovative products and finding new markets for traditional industries. Second stage would have broader base in both emerging industries and traditional industries. FASTS (Bradley Smith, CEO) said Queensland and Victoria were the only states to see the link between research spending and economic growth. Business (Commerce Queensland, Heilbron) suggested that government should focus on infrastructure. Business sees Smart State as just rhetoric (Cole M. 'State risks losing smarts', CM, 11/4/05).

Queensland government's Biocapital Fund has invested an extra $2.5m (to a total of now $8.5m) in a company (Xenome) which has also recruited QBF's former CEO (Walsh L 'Biotech secures funds and new exec', CM, 7/4/05).

Federal government is attacking Queensland Government's commitment to its Smart State program by providing funding to biotech research in Queensland - while highlighting the slow start of the state's Biostart program (Heywood L 'Bid to out-smart Beattie on biotechs', CM, 1/4/05).

Smart State label was devised by Premier and ex DG of his department. Theme was that knowledge, creativity and innovation would drive economic growth - a goal that had originated when ALP was in opposition. But there are suggestions that execution has been flawed. Iowa, in the US, had adopted a similar slogan, but recently changed it. Key focus was given to biotechnology - and companies developing many products have been established. Premier says that government has provided infrastructure through Institute for Molecular Bioscience. But there was also proposal for Bio-accelerator complex - which was never actually built. DSD says that a private operator will deliver the facility - and tenants will need to fund long term leases. In 2002 a $100m Queensland BioCapital Fund was set up to invest in 20 projects over 4 years. Over 3 years it has invested $15m in 15 projects. Government believes that industry wanted easy money - while industry argues that Fund is too conservative and 'hands on'. Some scientists have been attracted (eg to Alchemia - whose CEO Dr Tracie Ramsdale, argues that government should be applauded for its bravery in setting up infrastructure - and that its situation is comparably with Victoria - its main rival). ICT employment has grown 25% from 1998-2003. Adrian Di Marco of Technology One (a software firm) argues that Smart State idea is good but is being poorly executed. Some were concerned when a German company gained a contract for financial management software. Government purchasing policy (which favours foreign companies) undermines Smart State. A critical Smart State goal was to ensure that education and training responded to changing circumstances - but skills shortages have developed. Premier sees this as due to overheating of economy. He points to 5000 jobs in aviation that did not exist 6 years ago, 2000 in biotechnology and a doubling of education exports. Opposition leader supports theme but says he is sick of the gimmickry. Graeme Wood, CEO of Wotif.com, argues that strategy has helped change attitudes to potential for success of a Queensland based business (Walsh L., 'The Smart State - just how smart has it been?', CM, 26-7/3/05).

Queensland IT firms are concerned that premier has indicated that they were less than world class, and gave priority to international suppliers (Hayes S 'Conciliatory Beattie to meet tech groups', A, 15/3/05).

Richard Florida offered comments about how a smart city would recognize the need to compete for creative types. When he asked for questions, he was asked his opinion of Brisbane - which he had not had a chance to see. Florida has written The Flight of the Creative Class - which is seen to provide opportunities for Brisbane. It is useful that Brisbane's Lord Mayor is interested in what is required to make a city creative - but really Brisbane is boring (Sorensen R 'Innovation requires attention',  CM, 8/3/05).

Broadband computer access for all schoolchildren, fast-tracking qualified professionals into teaching and abolishing university payroll tax were some suggestions in Smart State consultation process. Griffith University warned of the need to boost strategy to avoid going backwards. QUT wanted all students to become fluent in second language (eg Chinese, Indonesian, Hindi). Griffith, which supported strategy, noted need to: attract more high-tech industry; enhance R&D capacity; boost tertiary education; build a culture that wants and appreciates a smart state; protect the environment; and built an attractive vibrant culture. QUT suggested that ICT coverage would need to be much more extensive than providers envisaged (eg mobile phone coverage in all areas). Many submissions were received in consultation process which ended last month (Livingstone T 'Unis put their case for a smarter state', CM, 17/12/04).

There have been concerns in industry about slow pace of investment by Queensland Biocapital Funds - a biotechnology fund backed by the state government (Walsh L 'Biotech boss leaves fund', CM, 1/12/04).

Queensland Government has defended its aggressive approach to biotechnology against business criticism - arguing that the $1.5bn investment was the future of the Queensland economy. Industry groups have expressed concern that this comes at expense of traditional industries. Commerce Queensland has suggested that funds aimed at biotechnology and other smart state industries should be redirected to reducing payroll tax. Since 1998 the Beattie Government has injected $1.5bn into life sciences industries (molecular biosciences, medical research, tropical biodiversity and agri-biotechnology). It points out that biotechnology has created 2000 jobs over 6 years. Heart of smart state is to transform economy to face science and technology industries - and biggest challenge is to continue cultural shift away from established industries. Everone needs to value education, skills and training - and get the spirit of culture and innovation. Queensland's biotechnology industries have grown 67% since 1999 with more than 60 research institutes - mainly in SEQ. 250 new products / services were under development in 2003, with most expected to be commercialised in 5 years. The long lag between ideas and jobs has led to criticism - but biotech remains a long term commitment of Beattie Government (Ludlow M 'Biotech is key to smart state', FR, 29/11/04).

State is to contribute to the development of a Preclinical Drug Development Facility. This marks significant change of direction for biotechnology industry and Smart State strategy generally. Government has spent heavily to create critical mass of science in Queensland. It will now host Aus Biotech conference. Chief Scientist believes that interstate competition over biotechnology had made Australia look 'silly' at overseas conferences, until an agreement about how to work together to get outcomes was negotiated. There is a need to get outcomes - through more collaboration, more focused effort and better targeted research. UQ saw the benefits of commercialization years ago. Scientists would previously have sold their ideas cheap and early. But pharmaceutical companies now want to remain at high end of commercialization - so there is a need for scientists to develop ideas much further - and so value add. Chief Scientist argues that challenge for Queensland is to attract more investment in biotechnology through venture capital. Medical researchers have had to reject government research grants because they do not have the infrastructure to support more work. There is a need to recognize that economic development since WWII has been driven by knowledge-based industries and that people who invested in those industries achieved great rewards (Parnell S., 'Outcomes key to building on biotechnology foundations', CM, 6/11/04).

Broadband connections and technologies to conserve water were two of main strategies to emerge from Smart State summit. Mention was also made of: cleaner coal technology; power generation from effluent; higher status TAFE courses. Summit was chaired by Mike McAllum (Chair, Global Foresight Network). After summit premier and David Gray (MD of Boeing Australia) released summary of strategies arrived at by round table discussions (a) closer government / business ties in skills development (b) higher post-school education (c) vocational training in emerging industries (d) actions to protect environment and support sustainable development (Livingstone T 'Broad range of ideas to make state smarter', CM, 6/11/04).

Public inputs concerning Queensland's Smart State strategy have been solicited by Queensland premier. He suggested that: extra year of preschool, expansion of R&D, growth of industries like aviation and biotechnology, success in attracting overseas students - all came through Smart State vision. The consultation process was welcomed by Professor Evan Gray (Griffith university) and Alwyn Powell (President Science Teachers Association of Queensland). During consultation process, Courier Mail will canvas a wide range of views on the subject (Livingstone T., 'Residents to help smarten up the state', CM, 23/10/04)

One concern of Australian Computer Society is that technology ministers are active in all governments to ensure hi-tech issues gain attention in all administrations. This led to concern when Queensland lost a minister solely responsible for ICT. Queensland's Premier was invited to speak - and stressed importance of ICT in Queensland - noting productivity gains from ICT application etc. Queensland sought to be leading state for ICT start-ups. Premier invited ICT sector to help prepare industry development strategy for Queensland - which government was already working on. The invitation was accepted. However government first needs ICT strategy for its own administration and communicated this to entrepreneurs so they can take it into account. ACS is keen to hear from persons interested in contributing to industry strategy. Ineffective procurement policies have been a problem in the past - as Queensland government purchasers are even more risk averse than those elsewhere. Queensland should have ICT awards program. Queensland is strong incubator for ICT firms - a situation that Software Queensland should aid in enabling software firms to band together. CITEC's role is being reviewed - noting that its effectiveness has been constrained by Public Service Act. It could be fully commercialized. These issues will be considered by ACS's industry policy think tank. The lessons from Queensland experience also need to be applied interstate. (Mandla E., 'Tech strategies begin with government deals', A, 31/8/04)

COMMENT: Another Queensland Government Development Strategy .... Ho Hum! 

There have been many development strategies produced by government in Queensland in recent times that have achieved little in terms of actually transforming the character of the state's economy. There is a need to learn from that history.

Arguably the key reason that development strategies have failed in Queensland is that they have involved government consulting with industry groups about what government can do for industry, rather than those involved in relevant industry clusters evaluating how they could better serve their customers.

Governments are an important part of the business environment (eg by creating a simple regulatory framework; supplying public goods and services without onerous taxation; being a technically challenging customer) - but this is only a fraction of the overall business environment. Unfortunately, each development strategy process has had a primary goal of building political support for government often by going beyond the functions which government can usefully perform, rather than a goal of actually developing the capabilities of the state's economy.

As noted in Defects in Economic Tactics, Strategy and Outcomes (2000):

Similar difficulties have affected the Beattie Government's Smart State agenda in recent years. Symptoms of primarily politically motivated development strategies currently include the public provision of:

There are reasons to suspect that Queensland now requires a more serious approach to its economic strategy (see The Need to do Better  in Queensland's Economic Strategy which refers to growing competitive challenges and also to pressures such as: public financing problems requiring a stronger tax base; and the probably need to drive future growth through exports in a difficult trading environment).

The industry policy think tank of the Australian Computer Society (which was mentioned in the above article) might make a useful contribution to breaking the cycle of ineffectual development strategies by:

Queensland has launched a program of awards for innovation (SMART Awards) ('Strategy pays big dividends', A, 18/8/04 - advertising feature)

Fund established to boost biotech has passed 3 year time-frame having spent only 1/6 of available money. Government said this was result of being commercially responsible. (Wash L 'Smart State biotech R&D kitty flush with spare cash', CM, 30/6/04).

Next stage in Smart State would require Queensland biotechnology institutions to work together through multi-disciplinary approach to research and commercialization. Government has invested to build infrastructure required for regional biotechnology hub - and would now use taxpayer funds to encourage institutions to work together (Parnell S. 'Biotech next step in Smart State vision', CM, 9/6/04)

Pushing money into aviation and other hi-tech sectors as part of Queensland's smart state focus has been criticized by a business group. Expanding the commercial potential of aviation, biotechnology and e-security were highlighted in premier's vision statement to parliament. Commerce Queensland president suggested there is nothing wrong with smart state goal, but a lot of it is hype with little substance. New industries should be supported, but so should existing industries. Government intervention and incentives are not needed. Minister for State Development (Tony McGrady) said that aviation offers considerable opportunities - and that main obstacle was shortage of skilled professionals (Ludlow M., 'Critics clip Beattie's wings', FR, 20-21/3/04)

Queensland would need 7500 more biotechnology scientists by end of decade, according to address by Professor Peter Andrews (Queensland's new chief scientist) to Beyond Brain Drain, Mobility, Competitiveness and Scientific Excellence conference. Australia earns much less per capita from biotechnology than US because of failure to translate research into commercialization. Australia needs vastly (eg 85,000) bigger scientific workforce for research to flourish. Much greater R&D investment is also needed. The problem needs to be addressed in schools and universities. Peter Doherty said that Australia is over-governed with six states regulating various aspects of science. The rejection of the republic and the Tampa incident had made Australia seem insular, dumb and rigid to expatriate scientists. There is big pool of scientists overseas who would like to return home, but vastly more resources would be needed. (Livingstone T. 'Science training urgent priority', A, 23/2/04)

Premier is campaigning on Smart State slogan, but jury is still out on whether people think it is just hot air. Queensland was changing long before the slogan was invented. Some give Beattie credit for trying. Brisbane Institute (Peter Spearitt) sees it mainly as a clever slogan. Opposition leader wants Smart State program in areas where Queensland is already strong - but sees program as only rhetoric (Wiesenthal S., 'Smart State slogan could be all hot air', FR, 3/2/04).

Premier Beattie was awarded an honourary doctorate of science for his Smart State agenda of funding emerging industries (Wardill S., 'Beattie dons doctor's hat', 30/12/03)

There is considerable substance to the Smart State agenda. It has resulted in many useful medical and scientific advances. The Smart state idea is not new. It was spoken of by Mike Ahern in 1980s - and funding was provided then for essential infrastructure. In areas such as nanotechnology, bioscience and biotechnology, Queensland is now pulling above its weight. ('Smart State will deliver dividends', CM, editorial; 7/7/03)

CPDS Comment: There is a big difference between spending money on creating technological opportunities and profiting from innovation. Australia has always been very good at the former - and had problems with the latter. The Smart State is changing nothing.

There will be biotechnology breakthroughs which will make a major difference to people's lives. Brisbane has become a leading centre for pursuing such research. Scientific breakthroughs are costly - and investment is a critical issue - so foreign investment is needed. The 10 top Smart State projects could mean a great deal to ordinary people. The state government sees biotechnology as next industrial revolution. This is a major change in a state where a generation ago farming, mining and tourism were seen as mainstays of economy. Innovation and Information Economy Minister points out progress by Progen, Agenix, etc. By identifying and harnessing the potential of world class scientists it is possible to make a better life for Queenslanders. Scientists worldwide are coming to conferences in Queensland (Livingstone T., 'Cut to your future', CM, 5/7/03)

Smart State is more of a marketing program for rejuvenation of Queensland than a specific program of creating particular industries (Parnell S., 'Premier times', CM, 21/6/03)

Three major value-adding projects in Australian minerals industry have suffered financial difficulty (Anaconda nickel project; BHP's Hot Briquet iron plant; AMC). All involved attempts to scale-up from smaller operations - ie to commercialize innovation. The first stage of upgrading involved pilot plants - which are expensive and not undertaken in Australia without government backing. Pilot plants allow users to study products. Before full scale operation is commenced, the next stage involves demonstration plant or semi-commercial operation. This shows operating costs. There are many chemical projects that have failed due to lack of demonstration plants - and now three mineral projects. For Anaconda the corrosion issues associated with hot sulphuric acid were learned the hard way. Demonstration plants are very expensive. The lack of R&D expertise in industry is well known. If an engineer or scientist reaches high management - they will be cash flow managers - rather than technical operators. There is a shortage of scale-up expertise in the process industries. Australia may have reached the point where scientific de-skilling has made it impossible to establish vale-adding process industries (Seddon D., 'Big projects torpedoed by lack of expertise', FR, 11/6/03)

It is not just the directors who let AMC down but the engineers - who once again have shown that it is dangerous to back them with new technology. This is exactly how BHP lost a fortune with the HBI project in WA. When this was suggested, it resulted in critical reactions from engineers (Gottleibsen R 'Under fire, engineers leap to the barricades', A , 2/6/03)

Five companies granted money under Smart State 'Innovation Start-up Scheme' have collapsed. Only for of first 30 companies granted funds have succeeded in obtaining further funding (Wardill S 'Not-so-good ideas cost taxpayers', CM, 28/4/03)

Queensland is struggling to overcome its 'sun, surf and sand image' despite much vaunted 'smart state' strategy that has been whole-of-government approach for 5 years. Pre-budget documents within government have now questioned its validity. This 'brand' is seen as not in step with the popular image of Queensland. Integrated approach is needed to ensure smart state does not remain rhetorical but is adopted by all Queenslanders. There is also confusion / cynicism within government about what it means - though business is generally supportive. Barnwell of Queensland Commerce said that it was about broadening state's economic base. Peter Doherty, University of Melbourne, said strategy was paying off with Queensland developing a high technology industrial base. But few people in Sydney associate Queensland with knowledge based industry. Government sees IT (which now employs 40,0000 and the Institute of Molecular Bioscience as proof that Queensland is becoming smarter (Strutt S., 'Queensland turns microscope on Smart State image', FR, 7/4/03)

Queensland's much touted 'Smart State' strategy has been suggested to be purely rhetoric in leaked cabinet documents. Only four companies (of 30) granted government funding have yet attracted ongoing capital. The documents suggest there is no integrated strategy across government to give effect to the vision. To avoid being mere rhetoric it needs to be adopted by all Queenslanders. . Another document suggested internal / external criticism about Smart State. Premier's Department seeks large additional funds for marketing. The Innovation Department calls for $6m for new support programs because of a lack of ongoing attraction of private capital. Commerce Queensland CEO suggested that document suggested that many viewed the Smart State strategy cynically (Emerson S 'Leak exposes Beattie's smart vision', A, 2/4/03)

There is evidence that Australia is a smart nation. It punches above its weight in many areas - and this must be expanded. Queensland is emerging as the real success story in efforts to build a high technology industrial base. There is a tradition of state funding of some institutions - eg QIMR which receives $5.6m and attracts $20m more. Collaboration between QIMR, Royal Brisbane hospital and UofQ resulted in establishment of Clive Berghofer Cancer Research Centre. Australia's national health system and cheap dollar make it a good place for drug companies to test drugs. One discovery which cost $10m has the potential to produce a $100m pa return over 16 years. Many other CRCs and national centres are based in Queensland. A Glycomics Research Institute has been established at Gold coast Camps of Griffith University, and a Molecular Bioscience centre at U of Qld. To build a high-technology future in Australia need to work on federal politicians. Universities need to be stronger. There is too little funding for emerging talent, and salaries are too low. There is also a need for money to make small biotechnology firms commercially successful (Doherty Peter 'Smart state needs experimental injections', CM, 26/3/03)

Queensland is considering plans to pool all government scientific effort in a single organization - Science Queensland (somewhat like CSIRO). This is seen as part of the smart state push - but to have been proposed without consulting industry, universities and the state's scientists. There is also concern about the shift in CSIRO from public benefit issues to commercial orientation (Brown S and Dickie P 'Uproar over plans for state CSIRO', CM, 20/2/02) [CPDS Comment: why would one assume that such a structural change would make any significant difference to the effectiveness of government scientists).

Queensland's growth in computer related jobs increased 33% over the past four years, compared with 61% nationally. The opposition claimed that this exposed Queensland's Smart State push as meaningless rhetoric. (Jones C 'Smart state lags behind in IT job growth', CM, 22/1/03).

Queensland's economy is like that of third world countries and is being outperformed by southern states according to Opposition. Access Economics investment monitor showed NSW and Victoria were outperforming - getting more wealth from investments because really getting smart, not just talking about it. Queensland's economic base is still an old third world economy founded on agriculture and mining. Treasurer said Queensland grew 4.4% last year compared with 3.6% average for other states. Comalco project, aviation industry developments and AMC prove government has good record. Queensland has made much of its 'smart state' push seeking to attract high tech and value added manufacturing - but NSW and Victoria are leading the way with investment while Queensland and WA decline. Access Economics said that Queensland's mining and resource investments were leading a pick-up in business investment. But Queensland has less manufacturing investment that in mining, agriculture, property and infrastructure - and Victoria (with less overall investment) has a higher percentage in manufacturing. The Smart State idea implied that Queensland had a well established manufacturing base from which to push tertiary industry - but it doesn't. Strong agriculture and mining are however a good basis for value added industry (Franklin M 'Southern growth states smarter', CM, 18/11/02) [CPDS Comments: 1. Queensland's 'Smart State' push is more about creating toys for the political system than about creating commercially and economically relevant innovation capabilities. 2. Some current successes are (a) the product of 'buying industry' and (b) in functions that are unlikely to generate high local value-added. 3. Slightly higher growth than other states, combined with much faster population growth, translates into declining relative community incomes. 4. Establishing higher value-added on the basis of agricultural and mineral production is much harder than has traditionally been assumed]

Parts of Queensland are no-go zones for bohemians and same-sex couple according to report for Local Government Association - which questions Queensland's 'smart state' status. The fact that bohemians and 'same sex' couples were seen to correlate with smart state credentials implied that the report was rubbish according to Queensland's Premier (Odgers R 'Gay times and bohemia rare in Smart State', CM, 31/10/02)

Queensland has been shown to be anything but the smart state in a survey of the economic performance of the nations regions. No area in Queensland featured in the 10 most creative regions nationally - based on the workforce percentage in super-creative jobs. But Queensland had several of the least creative regions. The survey was in the Local Government Association's State of the Regions report. Australia was shown to have few super-creative regions by global standards. There was an unprecedented focus on regional development in Europe and USA which was not reflected in Australia. The report was prepared by National Economics - who suggested that the knowledge / innovation economy widened the gap between rich and poor. Queensland's Innovation minister dismissed the report as irrelevant (Cole M 'Queensland brained in smart state survey', CM, 30/10/02)

Courage can bring success. Premier Beattie now has clear evidence that his push to develop a biotechnology industry in Queensland is working. This started 3 years ago and seemed improbable because Queensland's traditional industries are not science based, and there has been a lack of capital which always forced scientists with good ideas to take them offshore. Beattie led missions to annual Biotechnology Industry Association meetings, and launched taxpayer funded research infrastructure. With this intervention and large spending results have to be demonstrated. Now CBIC World markets is to invest $40m in a venture capital fund established for Australian biotechnology - which is run by Brisbane's CM Capital Investments. This shows that Queensland's biotechnology is taken seriously in North America. Beattie had visited Texas in 1998 to see how a previously mining and agricultural economy had been rebuilt by attracting IT facilities - and based his strategy on this (Franklin M. 'Germ of an idea grows bigger than Texas', CM,  15/6/02) (See Queensland's Biotechnology Bubble)

Queensland is losing out to southern states in the race to gain federal government grants for cutting-edge research centres (Anderson F 'Hi-tech funding goes south',  CM,  24/5/02)

The State Government's $100m BioCapital Fund could uncover super-performers to offset inevitable failed investments. It has been applauded by the industry as essential to fill a gap in the venture capital markets. Uniseed, a joint venture between Uni of Qld and Uni of Melbourne believes that 40-50 ventures could be introduced to BioCapital over the next few years (Anderson F. '$100m venture find to target top performer',  Courier Mail,  13/5/02) [CPDS Comment: Government programs to 'fill gaps in the market' have the effect of locking in market failures, and preventing the economy from developing - see Defects in Economic Tactics, Strategy and Outcomes]

A Brisbane IT company lost a fortune in intellectual property because of the state government's failure to abide by its own guidelines for hiring contractors and providing consultancy services - according to Opposition (Franklin M 'Contractor row rocks Smart State push', CM , 17/5/02)

$100m in venture capital for biotechnology projects will be provided by the Queensland Government through the Queensland Investment Corporation in order to arrest the brain drain out of Queensland. The BioCapital Fund will provide capital to 20 projects expected to achieve high commercial returns, and sell out again in about 10 years. This was to fill between research funding for and full commercialization. The Opposition called for the concept to be extended to other technological projects - especially mining and agriculture  (Odgers R. 'State fund of $100m for biotech ventures', CM,  10/5/02) [CPDS Comment: This is a silly proposal which is presumably a result of the unbalanced approach of the Smart State Program - which focuses on providing additional technical and education inputs into an economic system without doing anything to overcome the real problem ie lack of commercial capabilities to use them effectively]

Queensland government proposes to establish a $100m venture capital fund to invest in biotechnology - based on successful US models, and seeking a 20% pa return to the government. Victoria decided against a similar move (Skilling M. and Strutt S. 'Queensland leads race to fund biotech',  FR,  10/5/02)

A report by the Minister for Innovation and the Information Economy says that Queensland's R&D needs to increase dramatically for the state to remain competitive. Governments (state and federal) can not provide this - so they should seek private investment. A state R&D policy is to be drawn up. Queensland's expenditure on R&D as a percentage of GSP is 1.2% - the second highest in Australia. Despite a rapid growth of business R&D in the 1990s (152% cf national 62%) Queensland is still below the national average. Growth and diversification will depend on the development and maintenance of R&D infrastructure. Demand for government services limits government R&D funding. Government currently provides most R&D funding and private involvement is lacking (Strutt S. 'Queensland needs jump in R&D to stay competitive', FR,  11/4/02)

Small business believes that Smart State initiatives have been directed only at big business, universities and major projects – according to Commerce Queensland. Government is succeeding in attracting major investments and Smart State is a good policy – but SMEs are not benefiting. (Odgers R., ‘State policy only half smart’, Courier Mail. 26/2/02)

Australia is in danger of losing its reputation as a clever country (according to a consultant in innovation). Australia is in an innovation slump – and is relying on other countries to come up with new products. Australian companies have developed a culture of avoiding risk, and not giving people time to think. (‘We’re not as smart as we think’, Sunday Mail, 24/2/02).

A spin-off from the University of Queensland is pursuing the possibility that cone-shell venom could be useful for pain relief and an alternative to morphine. It has attracted significant capital - but not as much as would be available to similar ventures elsewhere. If it succeeds a multinational pharmaceutical firm would be likely to take responsibility for clinical trials. Bringing a new drug to market costs $200-500m. There is a lot of rhetoric about the industry - much coming from Queensland's Premier who has invested $100m. His status in the industry is close to sainthood - for having recognized early on the need for enterpreneurism. Other entrepreneurs include Peter Andrews (IMBcom) - who defines biotechnology as making money from molecules. The industry is changing so fast, that big firms may be simply distribution channels for bioscience products. However the hype surrounding biotechnology may be counterproductive (according to Tracie Ramsdale of Alchemia) - eg in terms of unrealistic expectations. In Queensland the industry is not yet mature. An Ernst and Young survey found that employment had increased by 815 over two years - and that this could rise to 3600 next year. The survey found that while R&D was rapidly increasing, there was a lack of commercial expertise. Uniquest identifies this as the classic problem of emerging industries - a lack of people with the right skills at the right time. Many Australians overseas with biotechnology skills are thinking of returning. But the people driving the industry in government, universities and small companies are not skilled in the entrepreneurial area. The local investment community needs to develop a culture like that in the US where there is more interest in growth than in dividends. Queensland, particularly Brisbane, has a strong biotechnology research base. Queensland's universities have produced 18 spin-off bio-tech firms in recent years. US venture capitalists visit Queensland because of the opportunities available (Johnstone C. 'Growth industry',  2/2/02)

Queensland's Premier claimed that the Smart State agenda is starting to show real results with two major projects - Comalco's $1.5bn alumina refinery and the Australian Magnesium Corporation's $1.3bn plant (Franklin M. 'A year of reigning on high for Beattie', Courier Mail, 29/12/01) [CPDS Comment: identification of two resource-based greenhouse-gas-intensive investments as signs of success in the Smart State agenda (which was presumably intended to diversify the economy) seems very strange - especially given the factors affecting the alumina refinery, and the subsidies required to secure the magnesium plant).

"A leading Queensland academic ... accused the State Government of having a dumb strategy to achieve its Smart State goal and called for a rethink of university funding" (Parnell S., 'Smart State strategy dumb, says academic', Courier Mail, 30/4/01)