Policies that support innovation and the adoption of new technologies are critical to boost future productivity growth and living standards, according to the 4th Intergenerational Report (IGR).
Treasurer Joe Hockey released the IGR in Canberra this morning, highlighting the role of innovation and new technologies in addressing the future risk to the economy of an ageing population and declining productivity.
According to Mr Hockey, innovation is critical for the future, particularly the partnership between Australian universities, researchers and the private sector.
The IGR says that: "Harnessing future opportunities to support innovation, adopt new technologies, facilitate foreign trade and investment and foster competition can boost future productivity growth and living standards.
"Government policy settings will be very important to helping individuals, businesses and governments take full advantage of opportunities from technological developments so that productivity growth is maintained, or even improved."
On rising life expectancy, its says that: "Medical research underway today in areas such as stem cell therapy, new medicines and other biotechnology has the potential to provide further dramatic improvements in life expectancy.
"It is for this reason that some experts have suggested that life expectancy may reach in excess of 140 years.
"The projections assume that the improvements from medical research continue at the same rate as the past," the IGR says.