Joseph Cheng

The Australian government has released a discussion paper – Boosting the Commercial Returns from Research – to further its innovation agenda. It seeks comment on “turning good ideas and research breakthroughs into commercial results” – such as, changing funding criteria to encourage university/industry collaboration and improving assessment of research impact.

The  paper is linked to the Industry Innovation and Competitiveness Agenda, which aims to promote innovation through collaborative efforts among university, industry, and government to strengthen Australia’s competitiveness.

The broader agenda underpinning this debate is an important step in the right direction; but it is selling Australia short on four key aspects which need to be corrected.

As the largest Western society based in the Asia-Pacific region, Australia has both the location and cultural advantages to perform the strategic role of an “innovation broker” between Asia and the West.

The agenda’s focus on the rapidly growing Asian economies obscures the fact that most of the high-income markets are still in North America and, once it recovers, Europe. This focus on Asia is selling Australia short.

Australia can out-compete other countries by leveraging innovations from the West and Asia to create unique and superior global products for the world markets. To build this competitive advantage, we need to attract the best and brightest researchers from the West and Asia to work in Australia.

We also need to recruit multinational firms to set up labs here to conduct high-end R&D. Singapore has pursued this dual-track innovation strategy for the past 30 years with great success, creating new businesses and boosting employment with high wages along the way.

The agenda places a strong emphasis on small and medium-sized enterprises (SMEs). While SMEs can be innovative in many ways, most of their innovations are incremental (with some being disruptive) due to limited resources.

By contrast, big firms such as IBM and Apple have the economy of scale and slack resources to conduct the full range of R&D, including work aimed at producing incremental innovations for the short term, disruptive innovations for the medium term, and breakthrough innovations for the long term.

To not sell Australia short, we need policies to encourage big firms to invest in both medium and long-term R&D, in addition to supporting innovation among the SMEs.

The agenda also focuses primarily on economic infrastructure, neglecting the research infrastructure needed to ensure breakthrough innovations.  Many such innovations, such as the magnetic resonance imaging (MRI) machine, are produced through interdisciplinary research that combines ideas and methods from multiple fields of study.

This is where the commercialisation of research agenda needs to be carefully thought through. Mechanisms to bring together experts from different disciplines and to facilitate joint research among them are in short supply in Australia.

We need to build the physical, professional, and institutional infrastructures both within and outside the scientific communities (including those housed in university, industry, and government settings) to encourage and support interdisciplinary research, with the goal of developing breakthrough knowledge that leads to high value-added revolutionary products and technologies.

There is the perception among some Australian politicians that research-intensive universities such as UNSW do a lot of basic research that has little application value.

We should all know that research which may seem esoteric can often be applied in unexpected ways. For example, the MRI machine would not have been invented without basic research done in mathematics, physics, computer programming and imaging science.

To not sell Australia short in our quest for innovation and competitiveness, we need to support both basic and applied research.

Industry Minister Ian Macfarlane has floated the idea of a fundamentally different way of awarding grants for research. Previously, funding has been tied to a scientist’s track record – generally, papers published in high-quality journals. Now he wants research funding tied to patents rather than scientific papers.

Writing scientific papers is an integral part of the research process to solve complex problems facing society. Just as politicians hold town-hall meetings and make speeches to get feedback on ideas before they introduce new legislation, researchers write papers to get feedback from the scientific community to help refine their study to solve important problems for society.

Not supporting researchers writing scientific papers is like not supporting politicians travelling around making speeches and holding town-hall meetings. The end result would be the same – new ideas not being discussed and evaluated in an open forum. This would be selling Australia short on innovation.

As the world moves toward a more balanced tri-polar global economy with anchors in North America, Europe and Asia, coupled with a parallel shift in the basis of economic competition from efficiency to innovation, Australia is well positioned to become a global leader in technological and business innovation if we aim high and target our efforts in selected areas where the country already has or can build a competitive advantage.

Joseph Cheng is a professor of management and the Michael J. Crouch chair in innovation at UNSW Business School where he directs the Australian Innovation and Competitiveness Initiative.