Australia lags behind other countries on innovation, with universities failing to encourage students and academics to become entrepreneurs, a new report has found.

The report, Boosting High-Impact Entrepreneurship In Australia, found while Australia was in the world's top one per cent of cited research papers on science, technology, engineering and maths, it ranked 72nd for "innovation efficiency" on the Global Innovation Index this year.

Australia's Chief Scientist Professor Ian Chubb commissioned the report, which was released on Friday.

It found that unlike other countries including the US, the UK and South Korea. which all introduced entrepreneurship in schools and exposed young people to "start-up cultures", "Australia has been slow to embrace entrepreneurship as a driver of economic growth".

"Our policy environment does little to encourage or support high-impact entrepreneurs despite the fact that we are economically exposed as a nation heavily reliant on commodity industries," the report found.

Studies showed that technology start-ups could add $100 billion to Australia's gross domestic product by 2033, but only if the country had 20 times the entrepreneurs and a more supportive environment for them to work, the report by consultant Colin Kinner found.

It comes days after Innovation and Science Minister Christopher Pyne said linking science with business to create jobs would be a top priority for the next Chief Scientist Dr Alan Finkel - an entrepreneur and academic - when he started his role in January.

Professor Chubb said the entrepreneur was not the stereotypical "rogue genius" who was successful without the benefit of an education.

Universities, he said, were pivotal to helping people make globally competitive businesses "as the stories of so many of the world's most iconic entrepreneurs suggests".

"Some grew their businesses from university-affiliated research; many more were shaped by the people they met and the attitudes they imbibed," he said.

Most Australian universities only began to offer more than an entrepreneurship subject in recent years, and most academics teaching such courses did not have personal experience as entrepreneurs themselves, the report found.

"At a fundamental level, the main reason Australian universities lag behind their international counterparts is that we have come late to the party and are now having to catch up in response to student demand."

Australian government funding for universities also rewarded the amount of research they produced, rather than the economic or social impact of this work, the report found.

This led academics to focus on publishing articles, and discouraged them from "pursuing applied research and commercial proof-of-concept work" that would not end up in top journals, even if it could lead to a new technology or start-up. Research was pursued regardless of whether it "ultimately represents a good investment of taxpayer funds," the report found.

Some universities were now starting to introduce programs that exposed students to entrepreneurship and support them as they established start-ups.

The report recommended rewarding universities and academic staff via funding for working with student entrepreneurs: "When staff do get involved with student entrepreneurship, it is often an unfunded activity or a labour of love."

It also suggested national surveys be conducted to track the effectiveness of entrepreneurship programs for government and universities.

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