Australia's Department of Immigration and Citizenship is conducting a comprehensive review of the Business Skills visa programme to determine whether it is meeting its intended objectives and what role the programme should play in building Australia's economy.

Officials believe that innovation is the key to making Australia more productive and more competitive.

'Economic growth depends on the diffusion of new technology and knowledge, driven by national innovation systems that can absorb and implement knowledge. In high income countries such as Australia, the challenge is to maintain a flexible innovation system that can both create knowledge and absorb it from elsewhere,' said a spokeswoman.

'We know that targeted immigration is one source for the supply of skilled workers and it supports a flexible labor market, but also, migrants themselves are strong contributors to innovation,' she added.

A recent working paper by the Department of Innovation, Industry, Science and Research (DIISR) titled Migration and the Innovation Agenda, which reviewed international literature on immigration and innovation, argues that a positive correlation exists between immigration and innovation output in domestic economies.

It points out that there is no general path towards innovative success, and this introduces considerable diversity and variety in approaches to innovation. Innovation is not something that happens only in a relatively small group of high technology industries, nor something that is driven by a small set of industries or technologies. The service sector is also strongly innovative, and this is particularly important since the service sector is the largest sector in all advanced economies.

In addition, innovation by businesses is not purely the result of independent decision making at the level of the enterprise. Innovation occurs in a system that is shaped by the social and cultural context, the institutional and organizational framework, regulatory systems, infrastructure and processes that distribute knowledge.

DIAC said that Business Skills is a niche category within Australia's skilled migration programme in that it directly creates business, and visa holders become business owners, rather than supporting existing businesses and industries facing skill shortages with a supply of skilled employees.

The programme's objectives are very similar to innovation activities and outcomes in terms of generating employment, increasing the export of Australian goods and services, increasing the production of goods and services in Australia, introducing new or improved technology, increasing competition and commercial activity and developing links with international markets.

Officials said that General Skilled Migration and the Employer Nomination Scheme would contribute to the national innovation system through the placement of highly skilled people into the domestic workforce.

'However, these migrants have been selected on the basis of filling skills shortages and medium to long term skill needs, not specifically on their history or capacity for innovation. The Business Skills programme is about increasing entrepreneurial talent and diversifying business expertise in Australia,' said the spokeswoman.

'Therefore, the Business Skills programme is ideally positioned to target migrants that have a demonstrated history of innovation and success in business to make a powerful contribution to the national innovation system and too the Australian economy,' she added.