This paper uses data from recent OECD (2013b) and Cornell University et al. (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. Whilst 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.