While high-growth startups get most of the attention, there is a lot of untapped potential in combining innovation with traditional small-to-medium businesses, Dr Marshall told the Australian Financial Review’s Innovation Summit on Wednesday.

“Innovation can be hip, can be digital, can be startups, can be the Valley; it can be scary automation and job losses – but it’s also the big thinking that happens in SMEs every day all around the country,” he said.

“We know SMEs are the backbone of our economy, and if we can strengthen our backbone by injecting a little more innovation, the rest of the body will follow, it just takes the first small steps, to grow into giant leaps.”

“SMEs are startups, after they’ve lost the initial buzz of being a new idea. They are often startups on Plan D – they are stubborn, they don’t give up, no matter what obstacles the world throws at them, because they are on a mission.

“They are passionate, agile and closer to their customers than big business could ever hope to be.”

A big part of managing the upcoming wave of disruption and creating new jobs is in ensuring these businesses have access to new innovations and are encouraged to use them, he said.

“To secure jobs of the future, we must prepare our children to think differently – because they are going to change the world, and you don’t do that by thinking like everyone else – diversity is the compass to navigate innovation,” Dr Marshall said.

The CSIRO boss pointed to three examples of Australian SMEs that have worked with the organisation on new innovations in their fields, far away from the startup world in Sydney or Melbourne.

He described how the Bennetto family, which runs a working cattle station in Northern Queensland, wanted to improve soil quality.

Together with the CSIRO, an automated monitoring network was set up on the property, with the family also gaining access to cosmic ray soil moisture probe, and the Zebedee laser.

“We’re working with the Bennetto family and bringing cutting edge tech on their property, from agricultural science to space science to data science, and so one small business is accessing the entire armoury of the national science agency,” Dr Marshall said.

This process saw “science deliver solutions” and led to the development of guidelines to improve environmental outcomes in the region.

Dr Marshall pointed to the CSIRO’s SME Connect program, which connects local companies with the research sector, and aims to demystify the government grants and funding process for SMEs.

The CSIRO also runs the ON accelerator program, which now has nearly 150 alumni companies from 30 institutions.

“We support the entire Australian innovation ecosystem to create new value for Australia. We aren’t spruiking research to SMEs, we’re bringing them into the entire research community to find the best combination of partners for their work,” he said.

“So we’re strengthening the SME sector by creating the collaboration hub.”

He identified Colvera as a company that successfully went through SME Connect to assist with the development of its cancer-detecting blood test.

Dr Marshall’s last example was Perth-based small business Energy Made Clean (EMC), which the CSIRO recently enlisted to develop a battery for a radio-astronomy site that wouldn’t interfere with its radio telescopes.

To do this, the CSIRO “went in search of a startup who wanted to become an SME”.

“I’m delighted to tell you we’re spinning up Australia’s first off-grid large scale solar-storage site, and the world’s first solar storage system to run a radio-astronomy site,” he said.

“Working closely with CSIRO, EMC has built a battery that doesn’t interfere with our radio telescopes. Since we got underway, EMC has been able to leverage CSIRO’s international customers who want minimal impact from battery stations,” he said.

“From small ideas, more big things grow.”