When Innovation Goes Fast — and Gets Nowhere

Innovation systems today are not suffering from a lack of motion.They are suffering from misdirection.

Across Australia, the UK and the United States, innovation efforts are accelerating — more pilots, more R&D, more “transformation initiatives,” more technology adoption. Yet system-level outcomes in productivity, health, energy, care and education continue to lag.

The paradox is now too visible to ignore:

Innovation is happening.Progress is not.

The problem is no longer invention or capacity.It is the absence of a compass.

And without direction, innovation becomes activity for its own sake — movement without improvement.

The new problem: innovation systems that reward speed, not alignment

For decades, innovation policy has been built on a simple theory of change: invest in research, commercialisation, entrepreneurship and technology development, and societal value will follow.

But the evidence now shows something different.

Australia: strong activity, weak alignment

The Productivity Commission demonstrates repeatedly that Australia performs well on research quality and early-stage innovation, yet lags on diffusion, adoption and outcome improvement. Despite heavy investment, productivity growth has stagnated for more than a decade (PC Advancing Prosperity).

The problem isn’t inactivity. The problem is misaligned incentives — funding that favours technological demonstration over system reform; pilots that never connect; transitions (energy, care, housing) constrained by governance rather than technology.

Australia’s rocket is firing — but sideways.

The UK: missions without mechanisms

The UK has embraced mission-oriented innovation policy, notably through the work of Mariana Mazzucato and institutions such as Nesta, which intentionally align innovation efforts with public outcomes (Nesta).

Yet the UK still struggles with the deeper structural issue: programme cycles that end before adoption begins, fragmented departmental responsibilities, and competition-based funding that discourages cross-system collaboration.

The direction is articulated.But the machinery is pulling in a different way.

The US: extraordinary velocity, systemic drift

The United States leads the world in R&D, patents and breakthrough science. Agencies like NIH, NSF, DARPA, and ARPA-E generate astonishing innovation throughput.

And yet the US health system remains fragmented, inequitable, and often resistant to adopting proven innovations — a failure documented extensively in implementation science. The challenge isn’t discovery; it’s that no single institution is responsible for aligning incentives across states, markets, insurers, regulators and providers.

The rocket is powerful.But the landing zone is nowhere in sight.

Universities: accelerating in the wrong lane

Universities are frequently placed at the centre of innovation policy.They excel in generating:

• new knowledge,

• early ideas,

• prototype technologies.

They are also structurally incentivised to prioritise:

• publications,

• competitive grants,

• institutional prestige,

• IP generation.

But they are not incentivised — or designed — to:

• steward system change,

• coordinate across sectors,

• support adoption and delivery,

• manage long-term outcomes.

This is not failure.It is misplaced expectation.

When governments rely on universities to drive innovation outcomes without reforming funding models or governance mechanisms, the result is predictable:

More innovation activity —less innovation progress.

The rocket speeds up.The arrow still points sideways.

The evidence is unambiguous: direction matters more than motion

Across OECD countries, three trends are consistent:

1. R&D intensity does not guarantee productivity growth.

2. Patent volume correlates weakly with improved societal outcomes.

3. Most value lies in services, systems and organisational change — the areas least supported by traditional innovation policy.

Even the OECD’s Oslo Manual, the global standard for defining innovation, states clearly that innovation must involve “implementation” and “use”, not just invention or IP (Oslo Manual).

Yet most funding still rewards novelty, not direction.

How we fix a misdirected innovation system

(Policy level + personal practice)

1. Stop treating innovation as a race — treat it as a navigation problem

Policy makers must shift from “faster innovation” to better-aligned innovation.

That requires:

• national outcome maps (health, climate, equity, education);

• funding aligned to outcome trajectories, not isolated outputs;

• cross-agency missions with shared accountability.

2. Fund direction-setting as infrastructure, not overhead

Countries routinely fund R&D bodies.They rarely fund intermediaries who align, translate and steer.

These include:

• organisations like FASTlab, which bridge research, delivery, community, policy and real-world systems;

• entities like Nesta in the UK, which shape missions and build connective capability;

• state-level or regional delivery labs;

• public-sector innovation units with long-term mandates.

These are not “nice to have.”They are the missing institutions.

3. Reform university incentives

If universities are to play a meaningful role:

• reward adoption, translation and system contribution;

• build joint appointments with hospitals, councils, energy providers, NGOs;

• embed researchers in delivery systems, not only labs;

• evaluate partnerships, not only publications.

Without this shift, universities will continue accelerating in a lane that leads to prestige, not outcomes.

4. Shift personal practice toward alignment, not novelty

This matters beyond policy.

Every practitioner — in health, energy, education, community — can ask:

• Is this project contributing to system-level outcomes?

• Who needs to be aligned for this to matter?

• What happens after the pilot ends?

• Who is responsible for continuity?

• How will this connect to other work?

Alignment is not a bureaucratic burden.It is the mechanism of progress.

5. Build multi-year compounding capability

The most successful innovation systems — in Finland, Denmark, Singapore — share one trait:They compound learning over time.

Australia, the UK, and the US tend to restart from scratch every 2–3 years because political cycles, grant systems and accreditation frameworks reward churn.

You can’t navigate if the map changes every funding round.

Right rocket. Wrong arrow.

The image for this post — the rocket firing strongly while the arrow points sideways — is not a critique of effort.It is a critique of direction.

Innovation is happening.People are trying.Systems are full of energy.

But energy without alignment becomes waste.Motion without navigation becomes drift.Velocity without purpose becomes noise.

Policy makers must decide whether they want:

• more rockets,

• faster rockets,

• or rockets that actually reach somewhere worth going.

Everything else flows from that choice.