Research funding fraught with hurdles and dead-ends

The long-awaited Innovative Manufacturing CRC will get underway in earnest this month, during a period in which the spotlight is very much on getting more bang for the country’s research buck. Brent Balinski spoke to the UTS’s Professor Roy Green about Australia’s innovation system.

The received wisdom is that Australia’s university research is pretty good, but we could do better at turning this into something that makes money.

It’s a view supported by Australia’s OECD ranking of 29 (out of 30) for collaboration and the Global Innovation Index 2014 study (17th placed in innovation, but 81st in innovation efficiency – converting input to output).

There are also plenty of reports around on the country’s innovation output, and the system in which this is produced.

According to Professor Roy Green, Dean of UTS Business School, there have been over 60 federal-level reports, reviews, policy statements and the like over the last 15 years on the country’s innovation system.

There’s been a definite shift in mood lately, though, towards promoting industry-based research.

“So something has happened there, a disconnect that we needed to repair,” Professor Green told Manufacturers’ Monthly, adding that so-called curiosity or blue-sky research remained worthwhile.

“I think there did need to be a corrective to the huge emphasis on public research in Australia that did not necessarily lead to commercial outcomes.”

Among peculiarities highlighted in one of the many reviews and reports – the interim report of the Senate references committee inquiry on Australia’s Innovation System – only 30 per cent of Australia’s researchers work in the private sector, compared to 80 per cent in the US and an OECD average of 60 per cent.

The interim report – the final version will be released not later than November 25 – also highlights the urgency for improvement. The mining boom is no longer delivering revenue windfall revenues and the need – highlighted at last week’s National Reform Summit – to increase productivity or face a lower standard of living is plain.

In the current context, getting more ideas out of universities and into the market is more important than ever. According to the CSIRO submission to the Senate committee, more than six-tenths of Australian productivity growth has been due to innovation: i.e. the application of new ideas.

Part of the problem, according to Professor Green, is a lack of coherence with how funding is targeted rather than with the raw amount allocated – through $9.7 billion, distributed via a convoluted collection of 120 line items and 13 portfolios – in the federal budget for science, research and innovation. Only a tiny portion of this is allocated to programmes focussed on business/research collaboration.

Though there have been shifts lately. These include the recent change in focus by the CSIRO, and the Industry Growth Centres initiative – the centrepiece of the federal government’s industry and innovation agenda – announced last year.

Of the CSIRO, the organisation’s Strategy 2020, launched in July, explicitly acknowledges the need to improve the country’s innovation efficiency, and better link public research, private companies and others.

“Innovation is a team sport,” the organisation’s CEO Larry Marshall said on the paper’s release, with Australia needing to lift the “bang for our buck” on research spending.

It had been a long-time concern for the CSIRO, observed Professor Green.

“They are very good at doing very large collaborations with Orica and GE, Boeing, organisations like that, but SMEs have found it hard to get access and to engage,” he said, adding the recent change as an important development in the life of the organisation.

“It’s much more like what Fraunhofer [in Germany] does, TNO in Holland, and some similar organisations with which CSIRO like to compare itself. So the basic research can still go on in CSIRO and there’ll still be a place for it, but it does have to connect with the ecosystem that is being evolved there.”

The recently launched Advanced Manufacturing Growth Centre, headed by ex-IBM Australia boss Andrew Stevens, is also geared towards improving engagement between public research and business. Its focus is on technology readiness levels 4-7.

The Growth Centre, as The Australian Financial Review reported last month, will evaluate the competitiveness outcomes of the new Innovative Manufacturing CRC’s proposed projects before any funding is released for these.

The novel part of the new CRC – which was announced in May, is currently run by an interim board, and will elect an official board next week – said Professor Green, was the industry transformation theme of its work. This comes with a stated SME focus, and aims to increase the “absorptive capacity” – to turn knowledge created into commercial benefit.

“It’s not just about narrow technology projects for a handful of companies, but it’s about that broader industry transformation process, which is in fact what the CSIRO are also trying to do to ensure that we do engage SMEs,” said Professor Green.

Time will tell if any of the recent shifts in policy help lift the country’s performance in research institution/company collaboration, but the new focus is a correction we had to have, said the Professor.

“We do need to have a broad framework which guides how that research is funded,” he said.

“And that is in the context of a shift in general towards more industry-led research.”