Having helped commercialise the outcomes of research in Australia for the last twenty years, I find it opportune to reflect on the current lack of certainty regarding R&D funding that is so fundamental to the ongoing economic success and health of our nation. R&D investment, and the structures that underpin them, must be addressed as a national and urgent priority.
In the past year, the government has suspended much of its financial support for R&D while it conducts a review of research priorities and government funding provided to support R&D initiatives. As a consequence, we are losing valuable intellectual capital as thousands of researchers seek positions overseas and, as highlighted by the recent dramas in the Senate and the linking of scientific infrastructure support to the Higher Education reform agenda, many of Australia’s world class facilities and programs have just avoided the risk of closure.
The Miles Review and other government reviews into R&D programs afford a once in a generation opportunity to streamline programs and empower researchers across all stages of the R&D spectrum to achieve targets –without the existing levels of regulation which have grown over the life of many current programs.
A model that has gained traction with government is Innovate UK’s Catapult Centres Indeed, the Catapults appear to be the “inspiration” for the Industry Growth Centres, launched by the Department of Industry in late 2014.
The UK Catapults are designed to establish and maintain a network of centres with world-leading technical capabilities. Their role is to identify, initiate and collaborate with those who can contribute to the identified activities. The outcome they seek is to leap-frog UK industry into high-tech and develop export markets in areas of demand.
I recently went to London to meet Innovate UK to better understand the model and see firsthand how three Catapults operate. It appears to me that there are seven key factors that are critical to their success:
- A consultative approach - the government, with industry advice, identified “gaps” in the market which will provide opportunities for industry with researcher support, to collaborate to deliver products in seven (soon to be nine) areas.
- Well-funded and actively supported – the Catapults each receive £10 million (about $22 million) per annum for five years. The aim is that commercial revenue and grants will each match that funding (within a period of 7-8 years), making an annual investment of £30 million. If more funds are raised, government may even contribute more.
- Physical locations that align to industry – a Catapult is expected to set up at a physical location which will serve the needs of its identified cohort. For example, Future Cities is located near London Bridge – an area where massive development is occurring in London (lots of opportunity to work with developers and local authorities), Digital Catapult is in the hub of London’s IT area.
- A long-term outlook – While the initial funding is for five years, the intention is that they will be around well beyond five years- i.e. for the long-term. Leases are longer term and infrastructure spending is to support development in the medium, not the short term.
- Focussed on delivering outcomes supported by research effort - Catapults work with, and attract, universities and other researchers as well as with industry but they are not, for example, required to run education programs or co-supervise university students – they are focussed on outputs for industry.
- Financial and operating freedom – Catapults control their own budgets and develop their own operating plans. They are not required to lock in cash or in-kind contributions from industry and researchers for extended periods. There are no promised industry or researcher contributions at inception.
- A collaborative remit - Catapults are encouraged to work together in and across streams. For example, “smart” litter bins, which send a message when they need to be emptied, reduce traffic volumes and unnecessary collections, saving fuel and reducing other inefficiencies can be used in Future Cities but may have been developed with industry involved with the Digital Catapult.
In addition to the above, the UK government is actively supporting Catapults through seeking international collaborations. The British Consul has recently held meetings in Australia – talking with industries that might direct research activity to the Catapults, as well as to Universities - which might look to Catapults in the absence of other research opportunities.
It is laudable that the Australian government has taken inspiration from the UK Catapult model. However, unless there is active consideration of the factors outlined above, it is hard to see how Industry Growth Centres (with or without other R&D activity) can achieve comparable stimulation of innovation in Australia and propel research into long-term viable economic opportunities.
Further, it remains unclear how existing R&D initiatives might feed into Industry Growth Centres. There is money available under the program to support entrepreneurship but the funds seem to only be available for the last stage commercialisation push rather than to identify and find ways to fill the gap that is the void between research and commercial success. It is the uncertainty around mainstream funding for doing the actual research to create commercialisation opportunities that is doing most damage, and why we are now losing our valuable intellectual capital and risk closure of world class facilities and programs.
The big question remains unanswered – how will the Industry Growth Centres interact with the more traditional centres of research and development such as universities, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Co-operative Research Centres (CRCs) and Centres of Excellence?
Australia has a strong foundation in its world renowned CRCs that we can build on to ensure a future funnel of research that will enable Australia to take a giant leap forward. In my view, government has the opportunity to enliven and leverage the CRC Program to operate as the bridge between universities and Industry Growth Centres, helping to fast track and leap-frog research into the arms of commercialisation – whether that be through SMEs or major corporates.
One strength of both CRCs and Catapults seems to be that they are able to work with small players as well as multinationals in niche areas; indeed they act as the “glue” between the two in many areas. However, to date, CRCs have been locked into universities for the simple reason that the application process takes up to 18 months. What other organisation would fund and house a prospective but uncertain entity throughout this process? In addition, CRCs have been bogged down in a reporting quagmire. As part of a holistic approach to incentivising R &D and commercialisation, Australia would benefit from learning how the UK Catapults have been closely embedded into industry sectors and empowered to develop industry appropriate operations.
If Industry Growth Centres are a source of additional funding to provide a bridge into commercialisation, the initiative is very welcomed. If however, they simply serve to reduce and redirect funds from existing successful programs, Australia may lose the opportunity to catapult itself as a smart country into the next part of this century.
The question remains, where and from whom will the commercialisation ready R&D be found? We must address the entire spectrum of R&D investment, and the structures that underpin them as a national and urgent priority if we are to be the clever country we espouse to be.
Jenni Lightowlers, Partner
2 April 2015