NewslettersMay 11th, 2021
PG #81: How can we better support Australian innovation?
Australia has an impressive history of science and technology innovation for such a small population. Yet when it comes to science commercialisation – translating good science into new and successful companies – we’re currently underperforming. This leads to a ‘brain drain’ or even scientists selling innovations to other governments.
Given our legacy, this is not just a shame, but a waste.
Penicillin-based antibiotics were invented in Australia. So were black-box flight recorders. The first commercially produced ultrasound scanner was invented here. The CSIRO developed innovations including faster WiFi, polymer banknotes, and extended-wear contact lenses. The tech that formed the foundation for Google Maps was created in Sydney. Cochlear (who we are doing some work with at the moment) invented a unique ear implant that has transformed the lives of people with hearing difficulties.
Successful commercialisation lets us translate public sector research into economic and social benefits for the whole of society. At the moment, however, there are a lot of systemic barriers in the way.
We recently worked with the Menzies Foundation to unpack this problem. To get a full picture, we used a combination of qualitative research with scientists and systems practice looking at the wider system of government, industry, and publicly funded research institutions.
Here’s a little of what we found:
A major factor is the mismatch between investor culture and science culture. Investors want evidence, but ventures founded on science innovation often take longer to get to market than other products and are therefore slower to provide evidence of market uptake. Investors want quick returns, but iterations and improvements to science-based products usually take longer than other types of product development.
This results in what you might call a ‘funding cliff’ – it’s easier to get funding in the first part of a startup journey, but then it drops off a cliff, leaving science companies floundering in that crucial gap between incubation and reaching market success.
To add to this complexity, there are (of course) different types of scientists, and different types of entrepreneurs. Academic reward structures favour publications and grants, which is workable in a university context, but can actually be a barrier to commercialisation.
If this sort of thing interests you, there is much more in the full report published by the Menzies Foundation.
In theory, Australia should be well placed to take advantage of emerging opportunities in science innovation, given our industrial capability, extensive research foundations and relatively stable fiscal position. The benefits to both Australians and the world would be enormous.