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Response to DESE University Research Commercialisation discussion

Updated: Mar 5

Cruxes Innovation welcomes the opportunity to provide its views on mechanisms to increase industry-university partnerships.

Cruxes Innovation exists to help unlock the huge impact potential of Australian research, by giving researchers the skills and support to drive partnerships with industry, community and government. Cruxes Innovation's co-founders Emily Chang and Jonathan Lacey have a long history of involvement in research impact, as researcher, innovation champion, strategic investor, spin-out CEO, technology licensee, and coach; in universities and PFROs, multinationals and start-ups; in Australia and Silicon Valley. For the last five years we have designed and delivered structured coaching and mentoring programs to help Australian researchers lead impact creation, by founding spin-outs and/or in partnerships with industry. In 2020 alone, we delivered programs to 270 researchers from 16 Australian universities.

Cruxes Innovation's goal is to help enable a system that, by 2025, creates a thousand new Australian jobs per year, driven by translation of Australian university research, and establishes Australia as a global leader in developing a resilient, sustainable, innovation-led economy. This system will enable both industry pull and research push, by established companies as well as start-ups and spin-outs; and it will support trans-disciplinary research, because of the pivotal role of humanities, arts and social sciences (HASS) research in technology adoption and behavioural change that drives lasting positive impact in society.

Cruxes Innovation's response to the discussion questions is as follows. Cruxes Innovation consents to its submission being made publicly available.

Mission-driven research, Scheme governance: no response.

Design of a stage-gated innovation project funding program

We believe the top priority for a Scheme to enhance university research commercialisation must be government investment to address the capability and structural barriers listed in the following section, not just providing new project funding. But we welcome consideration of further government investment in innovation pipeline projects, to reduce the very high risks in development and commercialisation of early-stage research-driven technologies. A single funding program that supports every step along the innovation pipeline is currently lacking and would be valuable. However, in our experience, most university research only reaches TRL2 without industry involvement, and researchers without industry experience often overestimate the maturity of their research. Stage 1 (proof of concept) university research translation funding must therefore accommodate projects starting at TRL2, rather than TRL4.

To drive sustained, large-scale change, Scheme project funding must incentivise participants to address the capability and structural barriers identified in the sections below. Stage 1 project funding applications must clearly describe the project’s target market opportunity. This will incentivise applicants to participate in coaching programs that build their capabilities to conduct market validation and industry engagement, as recommended below. Stage 2 applicants must successfully complete Stage 1, and provide further evidence of the target market opportunity. Market invalidation at either stage must be recognised as a highly possible outcome.

Incentives for participation in the Scheme

What would motivate businesses, universities or private investors to invest in this Scheme?

In the Scheme as we recommend it, full government funding, not matching funding, for Stage 1 and 2 projects will reduce the risk for businesses to collaborate with university research, and motivate businesses to invest in later-stage research translation projects when market and technology validation is completed. Government project funding that fully covers university overheads, plus government support to create prestige at universities for industry collaboration (see next section), will motivate universities to participate in the Scheme. Universities will invest in the Scheme when they see that participation increases net research income, and helps them attract students and top researchers and climb global rankings. The private sector (e.g. venture capital) will invest in the Scheme to gain privileged access to high-potential spin-outs and founders with breakthrough technology.

Carrot and stick: incentives for participation and consequences for non-participation.

The successful local and international examples referenced elsewhere in this submission demonstrate that strong government financial incentives accelerate structural and cultural changes in participating universities and companies to support more collaboration and commercialisation. Clear eligibility requirements for stage-gated funding (e.g. evidence of market validation, demonstration of successful industry engagement in previous stages) will drive changes in the participating organisations’ cultures to increase the probability of them gaining the upside and avoiding the downside consequences. We also recommend that extra Research Block Grant funding is allocated to universities who offer industry engagement coaching and mentoring programs to their researchers. This will encourage all universities, irrespective of their financial situation, to provide critical capability development opportunities for their researchers.

Scheme to enhance industry-university collaboration

We believe that Australian university research commercialisation and impact is far from its potential today because neither universities nor industry see the other as essential partners. We observe the following research-industry collaboration barriers, symptoms of this root cause. We recommend that the Scheme includes the following approaches by the Federal government to overcome these barriers.

1. Capability barrier: limited Australian industry capability to identify and validate innovation opportunities.

Recommendation: To complement the industry roadmaps and sector-specific forecasting reports produced today by organisations such as CSIRO, DISER, and Industry Growth Centers, we recommend the introduction of government-subsidised market validation coaching and mentoring programs for industry (especially SME) leaders. These programs must give industry leaders:

  • Skills and support to search the market for innovation opportunities.

  • An introduction to the value of university research in addressing their R&D challenges.

  • Familiarity with government support for industry-university collaboration.

These programs might be based on successful programs in top-ranked WIPO Global Innovation Index nation Switzerland.

2. Capability barrier: limited researcher capability to drive industry engagement and entrepreneurial impact.

Recommendation: We recommend the introduction of national-scale industry engagement coaching and mentoring programs for Higher Degree Research students and early-career researchers. Examples of successful international best practice include the US National Science Foundation’s I-Corps and Innovate UK’s ICURe. Based on these examples and our Australian experience, we recommend that the new programs include:

  • Regularly-updated DESE certification of core program content and delivery personnel, to ensure and maintain uniform high quality.

  • Program delivery is primarily government-funded, by extra Research Block Grant funding to universities who offer the programs.

  • Universities provide sponsorship (in-kind or monetary) to their researchers who participate in the programs, to ensure that the university supports the participants and their projects.

We recommend that the Scheme primarily supports industry engagement projects carried out by early career researchers (postdocs) rather than PhD students (e.g. through industry PhD programs). PhD programs train academically-gifted individuals to hone their research skills and knowledge creation capability, and publish their results. Postdocs, on the other hand, have developed research skills and are ready to generate significant impact, build deep industry partnerships, and drive entrepreneurship. However, they are employed on short-term contracts and often excluded from professional development. We recommend that this talent pool is nurtured and supported to drive industry engagement and entrepreneurship and create impact.

3. Capability barrier: limited Australian industry capability and capacity to identify researchers to address R&D challenges.

Recommendation: independent, government-subsidised industry-researcher match-making, potentially based on Scotland’s Interface program, modified to initially offer each SME R&D challenge to the single university research group best-equipped to address it. This will seed long-term university-SME partnerships, rather than creating bidding wars between universities.

4. Structural barrier: most university promotion does not incentivise industry collaboration.

Recommendation: highly-prestigious government-funded positions for researchers focused on industry collaboration and entrepreneurship, for example equivalents of the ARC’s DECRA, Future and Laureate Fellowships, to incentivise changes in university promotion criteria. “Impact DECRAs” would encourage entrepreneurship by reducing risk for postdocs in founding research spinouts. We also recommend the creation of a highly-prestigious funding program for Centres of Excellence in Innovation, to parallel the ARC’s existing Centres of Excellence in research, perhaps headed by “Collaboration Laureates.”

5. Structural barrier: misaligned industry and university intellectual property expectations.

Recommendation: Scheme-funded projects must mandate simple, clear IP terms favourable to Australian industry. University-industry IP misalignment today is compounded by under-resourced university technology transfer offices (TTOs), not incentivised to generate impact. We recommend that the Government reward Australian universities that close the most IP licenses each year. US universities have found that a high TTO ranking is a competitive advantage in recruiting top academics. Fostering a similar culture in Australia will incentivise universities to reward their TTOs for streamlining IP negotiations with industry and with entrepreneurial researchers (spin-out founders). We also recommend that market validation coaching programs for SME leaders described above include IP education.

6. Capability and structural barrier: universities’ timely execution of research translation proof-of-concept projects is limited by competing researcher commitments, limited project management skills, and university administration.

Recommendation: competing researcher commitments will be reduced by creation of industry-collaboration-focused postdoc positions (recommendations 2, 4). University administration will be simplified with mandated IP terms (recommendation 5). Stage-gated project funding will require that researchers deliver to access further funding. We also recommend that government PoC project funding supports project management. The Food Agility CRC does this today by employing an experienced full-time “agile coach” who helps research teams use agile methods to deliver PoC projects.

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