Local Matters: Regions, Innovation and Vocational Education and Training in the Australian Context

The paper reports on current research in the Riverina region of NSW which is investigating relationships between skill formation, knowledge transfer and the innovation process, with a particular emphasis on the role of VET institutions in supporting and diffusing innovation.In the recent Australian policy context 'innovation' has been conceived as primarily resulting from capital intensive research and development. This understanding has been largely derived from international literature, in particular OECD materials which identify 'innovation' as part of a necessary public response to the challenges of 'globalisation'. The paper argues that in practice, innovation in organisations is mostly incremental and process oriented. This understanding is particularly relevant for small to medium enterprises, typical of regional Australia. The paper discusses case study findings from a number of innovative regional organisations, most of which are competing in international product markets. These organisations, and the communities in which they are situated, depend heavily on regional education and training infrastructure to develop skills, knowledge and supporting social capital. The research findings are presented in the context of a critical analysis of key terms used in the overseas literature, where the concept of 'region' has different geographic, demographic and labour market implications than Australia.