This paper uses data from recent OECD (OECD Science, technology and industry scoreboard. OECD Publishing, Paris, 2013b) and Cornell University et al. (The global innovation index 2014. World Intellectual Property Organization, Fontainebleau, 2014) national innovation reports to explain Australia’s poor innovation performance. We adopt a realist approach and apply the technique of retroduction to identify potential causes. While our account is only preliminary, we contend that this technique provides the resources to uncover plausible causes for further, more detailed, causal analysis. We conclude that the retroductive method is one that can be applied to aggregated statistics more generally and could be used by analysts and policy makers in any jurisdiction.