Australian businesses are lagging global peers on developing innovation to boost productivity, a new report suggests, supporting calls for an overhaul of the skilled migration program.
The Productivity Commission report, released on Monday night, found more skilled migrants would bring workers with broader management exposure and organisational experience than those based in Australia.
It also suggested poor managerial capability was partly to blame for low productivity growth, as was a low level of collaboration between government departments and between businesses.
Two-thirds of firms relied on new ideas to come from within their own ranks, the report showed, meaning Australia was lagging its global peers on productivity.
Experts say productivity must increase to boost wages and in turn lift output of firms but actually securing better productivity has been a key political and economic stumbling block for several decades.
Almost 60 per cent of Australian businesses do not assess innovation or human resource measures, or only to a small extent.
The report also calls for a greater focus on commercialisation of university research to help bridge the gaps between knowledge and skills application, as well as increased innovation within government services.
“An expanded and adapted employer-nominated migration scheme would allow better matching of the skills and knowledge needed by employees and the unique capabilities held by migrants,” the commission recommended.
Treasurer Jim Chalmers said the report’s findings showed Australia was “paying the price” for a “wasted decade”.
“While the ball got dropped in the past, there are significant opportunities to boost productivity, including through greater collaboration,” he said.
“The Government takes this challenge seriously which is why we’ve committed to a range of productivity-enhancing investments including in childcare, energy and skills.”