As more and more mines come online throughout the world, Australia's most lucrative export will no longer be iron ore.
Australia is at a crucial point in history where we can decide to utilise our strong education system to drive innovation in a number of industries. These future trends will present opportunities for investors.
Why can't we innovate?
Currently, the Australian tax system and government legislation doesn't support innovation well enough. Despite our ability to educate, we lack infrastructure and leaders willing to drive investment in critical growth areas.
In the technology sector, many bright-eyed and bushy-tailed graduates are told to move to the United Kingdom or United States to find employment and funding for businesses. Brain drain is a serious issue which Australia needs to counteract.
A work in progress
There are a number of exciting and potentially lucrative technology trends emerging throughout the world, but we should be doing more than just applying it. Engineering, particularly in the medical industry, will play a big role in Australia's economic future as we seek to use our expertise and research to grow a culture of success.
We have already witnessed the success of Australian biotechnology companies on the world stage. ResMed Inc (ASX: RMD), Cochlear Limited (ASX: COH), Sonic Health Care Limited (ASX: SHL), CSL Limited (ASX: CSL) and Sirtex Medical Limited (ASX: SRX) are examples of companies which continue to thrive despite threats of competition from low-cost nations throughout the world.
Our government's role should be to reward innovation with more incentives which help develop the skills we need. One company which took the gamble of developing an innovative product and was rewarded with grants from the Australian government was ADMEDUS (ASX: AHZ) – formally Allied Healthcare.
In 2013, it was one of the best performing stocks in Australia, soaring some 700% in value. Top performing companies will hire more people, invest in research and encourage their peers to do the same.
Other Australian companies looking to change the way the world does things include Acrux Limited (ASX: ACR), Atcor Medical Holdings Limited (ASX: ACG), Starpharma Holding Limited (ASX: SPL), Prima BioMed Limited (ASX: PRR) and Mesoblast Limited (ASX: MSB).
Small companies looking to innovate their way to success need government support via changes to legislation and the tax system. These changes should reward entrepreneurs looking to build companies from the ground up.
Foolish takeaway
Biotechnology companies, such as those listed above, are at the forefront of innovation in their respective fields and how many Australian companies can you say that about? Their work is delicate and expensive but can be extremely rewarding for investors and our economy. Investors with a long-term investment horizon should look to position themselves in this industry with exposure to both growing and established companies.
