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Francesca M. Beddie & Associates SUPPLEMENTARY SUBMISSION INQUIRY INTO INNOVATION AND CREATIVITY: WORKFORCE FOR THE NEW ECONOMY The extent to which students are graduating with the skills needed for the jobs of today and of the future Employers want more than skilled graduates.

They want workers who are adaptable, creative thinkers.

A move in para-professional training away from the vocational education system to universities has sought to meet this demand.
However, the pressure on education budgets as well as the changing nature of industry, with its demand for constant on-the-job skills adaptation (WEF, 2016), suggest that universal higher education is neither affordable nor the most effective solution to workforce development.
The Australian Chamber of Commerce and Industry, for example, has argued that a shift to higher education qualifications may not be in students’ and employers’ best interests because these would have less input from industry (ACCI 2016 p. 8).

The shift has, nevertheless, resulted in a decline over the last decade in spending on vocational education and training (VET) to four per cent below 2005 levels, while higher education expenditure has risen by 45 per cent (Mitchell Institute 2016).
Our research project, Positioned for the ideas boom: where does the VET workforce fit in?

starts from the hypothesis that there is potential for VET providers, in particular the TAFEs, to contribute further to creating graduates equipped with a combination of practical and problem-solving skills and thus to meet the demands of employers for innovative workers at the trades and para- professional levels.
Our project is investigating the role of ‘applied research’ in achieving this potential and inserting VET into the innovation system.

In using the term ‘applied research’, we have in mind the definitions set out in the OECD’s Frascati Manual (2015, p. 45):  Applied research is original investigation undertaken in order to acquire new knowledge.

It is directed primarily towards a specific, practical aim or objective.
 Experimental development is systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.

VET students need the ability to investigate problems, make judgments on the basis of sound evidence, take rational decisions and understand what they are doing and why.
As Brew (in Healey et al (2014) p. 7) has said, ‘research and inquiry is not just for those who choose to pursue an academic career.

It is central to professional life in the twenty-first century’.

In recognition of this reality, some TAFE institutions in Australia are embracing research and inquiry.

For example, TAFE Queensland has set up RedSpace, the centre for applied research and innovation and Holmesglen Institute has an applied research centre.
Incorporating applied research projects, which are firmly focussed on solving real-world problems arising in the workplace, is one way to produce graduates who can innovate.

But there is not yet a systemic approach in the VET sector to applied research, nor the necessary capability.
That capability 2 Inquiry into innovation and creativity: workforce for the new economySubmission 57 - Supplementary Submission 1 Francesca M. Beddie & Associates must be nurtured by professional development for staff and new ways of arranging teaching loads.

A first step, already proclaimed as necessary by the CEO of TAFE Queensland, is for the sector to ‘name and claim’ what it has and can achieve in terms of applied research that solves real-world problems for industry.
A second step is to better understand the actual talent that exists in the VET workforce and to foster it through further training as well as by creating more opportunity for involvement in applied research.

Initial VET teacher training should also take account of what will be required of a workforce that is part of the innovation system.

Our research will go someway to filling this gap by producing an applied research capability framework for VET teachers and RTOs.
Recognition and encouragement, including from this committee, of the VET sector’s achievements and potential would be a morale booster for a sector suffering the repercussions of the VET FEE Help rorts (by a small minority of registered training organisations (RTOs)) and multiple policy shifts in recent years.

Greater attention to the professional development of the VET workforce must be one part of the equation of meeting the needs of the new economy.
Factors that discourage closer partnerships between industry, in particular small and medium enterprises, the research sector and education providers, including but not limited to: intellectual property; technology transfer; doctoral training practices; and rapid commercialisation Around half of the patents issued in Australia go to people who do not hold degrees (information retrieved from the Australian Inventor Survey (unpublished)).
Yet, the VET sector is not acknowledged as part of the research sector nor is it seen as an integral part of the National Innovation and Science Agenda.

Without access to the innovation dollar, RTOs cannot realise their potential as appropriate partners for industry to solve their problems and to assist in experimentation and commercialisation efforts.

In addition, the VET workforce could be better used to assist in knowledge transfer within the R&D system.
VET educators and other professionals already have strong links to industry and, of course, are training the people who will be using new technologies.

Greater understanding of the implications of current policy settings on RTOs’ ability to contribute to innovation is required.

Changes should ensure that appropriately qualified RTOs are also eligible for funding from the nation’s R&D funding.
3 Inquiry into innovation and creativity: workforce for the new economySubmission 57 - Supplementary Submission 1 Francesca M. Beddie & Associates Opportunities for generating increased economic activity, including further investment and jobs, through greater synergies among publicly funded research agencies, universities and other Australian research institutions with businesses and industry; including but not limited to: co- location, cluster formation and development of precincts between universities and industry.
According to the 2015 Australian Innovation System Report (p.61): innovative entrepreneurship is mostly concentrated in larger metropolitan centres, although there are pockets of concentrated innovative entrepreneurship in some regions of New South Wales and Queensland…the presence of research organisations in a region has a positive impact on business creation in the same region, especially in professional services.
There is a large public investment in TAFE campuses around the country, including in regional Australia.

The latter could act as local precincts for innovation and entrepreneurship as well as for the dissemination of knowledge to end users.

Our research has revealed a lack of collaboration between publicly funded applied research efforts, in particular the Cooperative Research Centres and the Rural R&D Corporations, and TAFE institutes.
This appears to be because of the problems identified above: lack of understanding of VET’s capabilities and lack of access to R&D funds.

Greater investigation into the place of VET in innovation clusters is warranted.

This may also uncover weaknesses in the VET workforce that would have to be addressed to enable TAFEs and other RTOs to act as knowledge brokers, manage research and run innovation clusters.
Relationships between tertiary education entrepreneurship programs and public, private, and not- for-profit incubators and accelerators The VET sector trains many of Australia’s small business people and entrepreneurs.

In some places, training programs are becoming more specifically focused on entrepreneurial skills.

In others, TAFE campuses are doubling as innovation hubs.
As well as the aforementioned RedSpace in Queensland, which brings together TAFE Queensland’s expertise and start-ups, Melbourne Polytechnic has recently established a Centre of Applied Innovation which will be using sophisticated analytics to build connections across the globe for its students and industry partners.

It is important to recognise that more and more VET students will be expected to be more than skilled workers.
They will need entrepreneurial skills that help build resilience in a fluid labour market.

Fostering VET’s connections with other entrepreneurship programs, such as the Sydney School of Entrepreneurship, will be good for the VET curriculum.
The committee should note the need for flexibility and responsiveness in VET training products, which allow curricula to accommodate applied research projects to build the skills of students and staff to innovate, and allow the introduction of entrepreneurship skill sets for existing workers as well as new students.
4 Inquiry into innovation and creativity: workforce for the new economySubmission 57 - Supplementary Submission 1 Francesca M. Beddie & Associates References Australian Chamber of Commerce and Industry 2016, Focus on skills: building a better national VET system, Australian Chamber policy position, viewed 30 March 2016, <https://www.acci.asn.au/sites/default/files/uploaded- content/field_f_content_file/auschamberfeb16_positionpaper_vetfocusonskills_final.pdf>.
Department of Industry, Innovation and Science 2015, Australian Innovation System Report 2015, Canberra Jenkins and Lea 2014, Developing research-based curricula in college-based higher education, <https://www.heacademy.ac.uk/system/files/resources/developing_research- based_curricula_in_cbhe_14.pdf> Schmidt, J 2015, TAFE Queensland Submission to the House of Representatives Standing Committee on Education and Employment Inquiry into innovation and creativity: workforce for the new economy, Submission 41, House of Representatives, Parliament of Australia World Economic Forum 2016, The Human Capital Report 2016.
5 Inquiry into innovation and creativity: workforce for the new economySubmission 57 - Supplementary Submission 1