Public support for science and innovation

When Commissioner Mike Woods released the Productivity Commission's research report, Public Support for Science and Innovation, he said, "The most important functions of publicly-supported science and innovation are nurturing a highly skilled and creative workforce and generating knowledge that is broadly and publicly useful. Increasingly, public support has focused on commercialising R&D, but in most instances the private sector is best placed to fund this activity."

The report claims that there are important economic, social and environmental benefits to Australia from the $6 billion public support of science and innovation. Nevertheless, in its final report the commission has identified a number of areas of the science and innovation system where reforms are needed.

Consistent with this, the commission argues that the objectives of Cooperative Research Centres should be realigned to the broad attainment of economic, social and environmental goals, not just commercial ones. Strong public funding support is justified for rural R&D corporations that have a significant public good orientation. But the commission considers that the level of public co-funding for some of the more industry-focused corporations could be too high and should be reassessed.

The commission found that there would be a better chance of stimulating R&D in the business sector if there were changes to the design and scope of the $600 million R&D Tax Concession. Commissioner Woods said: "We need to increase the likelihood that businesses getting these subsidies use them for R&D they wouldn't otherwise undertake."

The commission also identified a need for more nimble R&D collaborative arrangements between business and universities, and has proposed a complement to the CRC program that could achieve this, as well as a 'proof of concept' program that would help universities transfer developed ideas to businesses.

The commission canvasses some options that might increase the possibility of net benefits from the recent government decision to adopt the research quality framework (RQF). The commission favours a scheme that is more strongly weighted against the poorest research performers than currently envisaged. But as the RQF evolves, the commission suggests the use of a lower cost, risk-minimisation approach that only applies to poor performing areas in universities.

Science Industry Australia response

In responding to the report, Dr Geoffrey Burge, Science Industry Australia president said, "There exists a disconnect between the research side and the commercial side of Australia's innovation system brought about by the research outputs from universities not being adequately developed to the point of being investment ready.

"The Science Industry Action Agenda (SIAA) has developed a 'proof of concept' checklist and set of guidelines designed specifically to help bring the two sides closer together," Burge goes on to say.

The checklist and guidelines are based on best practice experience across research agencies, universities, commercialisation intermediaries and venture capital companies.

The Australian Institute for Commercialisation response

The Australian Institute for Commercialisation (AIC) welcomed the Productivity Commission's report into public support for science and innovation.

However, AIC CEO Dr Rowan Gilmore said that some care was needed in applying the report's conclusions on commercialisation, which might be read to suggest that undue emphasis is being placed on its pursuit.

"The AIC adopts a broad characterisation of commercialisation, one that is not only about economic returns, but about achieving outcomes (products, services, or processes) with market take-up. It includes broad knowledge transfer processes such as contract research and university consultancies. Nor does this mean that the motive needs to be profit driven," Dr Gilmore said.

"Commercialisation could mean giving intellectual property (IP) away free for public benefit. However, good business practices must still be followed to exploit it," he said.

"Although the commission acknowledges this, it chooses to adopt a narrow definition of 'commercialisation' in which IP is sold for commercial use. The risk then is that all market- or application-focused activities by research organisations - many of which clearly seek to serve the broader public good - become tarred with the same anti-market perception.

"The Productivity Commission's report highlights the need for the continuation of funding of science and basic research and removal of what some might be seen by some as constraints on how funding is applied," Dr Gilmore said.

Finally, the AIC agrees with the commission that a balance is needed when considering the role of public support for commercialisation activities in research organisations.

The AIC chair Dr Peter Jonson, said: "Nation building requires more than incremental tinkering with the system."

Group of Eight response

The case for public funding support is confirmed as compelling, according to Professor Glyn Davis, chair of the Group of Eight (Go8) after the release of the report. "The Commission has recognised the pressures placed on Australia's top performing research universities by the ever increasing demands of competitive funding schemes for matching funding from institutions.

The commission's finding that university block funding must be kept at a level that enables institutions to continue to make meaningful strategic choices, as well as support competitive schemes, is therefore welcome," Professor Davis said.

"The commission remains committed to the overall finding that the current level of public funding for Australia's science and innovations systems is about right. However, the Go8 believes that there is a strong case for additional funding, targeted at the best research, if Australian research is to remain internationally competitive.

"In relation to the research quality framework currently under development by the federal government to distribute block grants in the future, the Go8 has always promoted a model which supports research of the highest quality and impact, wherever it occurs.

The commission's revised finding that research judged of the highest quality and impact should receive far more funding than research judged to be poor is strongly supported by the Go8.

"In its submissions to the study, the Go8 highlighted challenges faced by its member universities in taking the outcomes of research to the stage where commercial potential can be properly assessed (proof of concept). The Go8 is pleased that the commission has recognised a need for policy intervention in this area."