The 2025 Nobel Prize in Economic Sciences was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for showing the role of public investment in innovation for economic growth. The award signals the formal absorption of innovation into the mainstream neoclassical economic paradigm. While this marks a watershed moment, it also raises questions about intellectual lineage and disciplinary boundaries. This 'paradigm capture' may now create direct competition for the heterodox

Innovation ecosystems often exist as dormant networks despite structural potential. The critical difference between contact lists and active collaboration lies in problem-focused interaction, trust-building, engagement, and governance mechanisms that align diverse organisational incentives. Successful activation requires shared challenges that demonstrate mutual value, system integrators that facilitate cross-sector engagement, and policy frameworks that reward collaborative

Australia’s innovation system is world-class in research inputs,but falters when it comes to commercial outcomes. This is our long-standing "innovation paradox." What if we could finally solve it? Drawing on the case of Kaiserslautern, a small German city transformed into a global tech hub through the establishment of Fraunhofer Institutes, this Insight makes the case for introducing Fraunhofer-style applied research institutes in Australia.

Australia’s productivity woes stem from more than tax or regulatory inertia. As Emeritus Professor Roy Green argues, decades of industrial decline, underinvestment in research, and a failure to embrace strategic transformation have left the economy exposed to global shocks and wage stagnation. Green outlines a pragmatic agenda for industrial renewal—joining up policy, innovation, and workforce development—to secure Australia’s economic future.

Australia’s economic future depends on lifting productivity through deliberate, coordinated innovation efforts. This demands more than tax breaks or start-up hype. We need systemic clarity about innovation; mature ecosystems that enable diffusion, PMI-oriented public intervention, regional governance, and outcome-based metrics. Only then can Australia boost competitiveness, inclusivity, and resilience beyond legacy sectors and cyclical growth.

Since 1963, Australia’s federal industry portfolio has been restructured more than 20 times. This extraordinary level of administrative churn exposes a deeper crisis: a persistent uncertainty about the purpose, priorities, and pathways of industrial policy. This Innovation Insight calls for a reevaluation of institutional maturity—one that strikes a balance between executive flexibility and enduring strategic direction.