Investors have reaped the benefits from Australia's mining and banking sectors.

Bank dividends have been nice income earners for investors, while it's a known fact that mining saved Australia from the full impact of the global financial crisis.

But Australia has also a rich history of invention.

The bionic ear, frozen embryo fertilisation and the Hills Hoist have all been successful and lucrative inventions that have paid off for Australia.

However, Australia needs to significantly restructure its economy if it is to capitalise on future innovations.

It was the key message delivered by former Queensland premier Peter Beattie when he spoke at the annual Conference of Major Superannuation Funds of Australia this week in Brisbane.

Beattie told the audience, who collectively manage $450 billion of Australia's retirement savings, that they need to look at investing more in an industry that is set to employ millions of Australians.

The former politician has long advocated the need for governments and industry to support innovation, having pushed Queensland as a "Smart State" when he was premier.

Under his Smart State agenda, Beattie aimed to invest more in research and education.

Now, he believes it is an agenda that should be shared nationally.

Australia is already losing thousands of white-collar jobs to low-cost developing countries.

A number of firms, including Telstra, ANZ and the National Australia Bank, have outsourced part of their operations to well-educated but cheap countries such as India.

Although mining has provided enormous benefits to Australia, Beattie notes that only 2 per cent of all jobs in Australia are generated from the mining sector.

"Outsourcing jobs to other countries may be good for a company's bottom line, but it is not good for Australia in the long term. The mining boom has provided Australia with great economic rewards, but at the same time it's not where all the jobs are," Beattie said.

So, what industries of the future will generate employment as well as deliver benefits to investors?

Beattie says Australia can no longer compete on cost and instead should focus on her competitive advantages. One such advantage is intellectual property.

The pharmaceutical sector, which capitalises on Australia's intellectual firepower, is already the country's second-largest employer, employing around 40,000 people. This sector will even be more sustainable as the mining boom eases.

However, Australia is apparently "woeful" when it comes to taking its innovative ideas to market.

According to Beattie, Australia has a strong pipeline of innovative products but most do not come to fruition.

The Global Innovation Index, developed by the French business school INSEAD, ranks Australia number 12 in the world in terms of innovation input.

The index takes into account the political, regulatory and human capital of a country.

However, when it comes to innovation output, Australia is ranked only 31 in the world.

"We are great with coming up with ideas, but terrible when it comes to translating these ideas into commercial innovation," Beattie said.

Morningstar head of equities strategy Ross Bird agrees wholeheartedly.

"We have a lot of talented people in the medical research field and some to have to go overseas with their research or get funding from the big pharmaceutical companies," Bird said.

Beattie said government support is needed but at this stage it is poorly misguided, with the current $8.3 billion chunk of research already spent on the automotive industry.

Beattie instead encouraged investors to support early-stage development, which was crucial to ensure these innovative ideas became viable before "they were lost to someone else".

Beattie is a director of the Medical Research Commercialisation Fund (MRCF).

The MRCF was set up by Australia's leading medical research institutes, and the Statewide and former Westscheme superannuation funds, and is supported by a number of state governments.

The MRCF invests in early-stage development.

To overcome the risks inherent in investing in the testy area of early research, the MRCF has a stake in a number of projects. To date, it has 13 investments.

An investee company, Osprey Medical, is poised to list on the Australian Securities Exchange (ASX) in May this year. Osprey has developed a technology that protects the kidney during heart operations.

Beattie also reminded the audience about Cochlear, one company that has proved what Australia can achieve in the life sciences sector.

Listed in 1999 at $2.50 a share, the share price is now $58.50 a share and the company has a market cap of $3.3 billion.

When Beattie spoke about the success of Cochlear, he noted the company organised telethons with Channel 10 in 1974 and 1979 in order to fund the development of its bionic ear.

Australia will now need to be much more proactive if it is to genuinely support industries of the future, rather than rely on such ad-hoc approaches.