David Havyatt
July 14, 2015

Industry must drive collaboration

Industry must drive collaboration

Mr Fixit: Christopher Pyne orders another collaboration review

One challenge for Christopher Pyne’s panel reviewing research commercialisation is getting the business community to acknowledge its poor performance on business-university collaboration.

While the OECD rates Australia as last or second last on the level of collaboration, Australian businesses rate themselves as middle of the pack. That self-delusion is probably holding us back from doing more.

The Chris Pyne panel has been specifically asked to “consider the development of measures of research-industry engagement and collaboration, including the availability of international rankings to compare performance and drive improvement over time.”

The Federal Department of Education and Training discussion paper on boosting the commercial returns from research released last October quoted the OECD data on industry-university research collaboration.

This ranked Australia last out of all 33 for collaboration by large firms, and only one place better for collaboration by small firms. While a QUT academic has claimed the OECD data is just plain wrong, discussion with the ABS reveals that this criticism is wide of the mark.

There is some difficulty in the comparison because the OECD data mostly comes from a European-wide survey, whereas the Australian data does come from the Australian Bureau of Statistics.

However, the data provided by the ABS to the OECD is not the published data from its survey, but the original data repurposed for the OECD, including an adjustment for the definition of large from over 250 employees to 200 employees. This explains why the data in the OECD statistics is not exactly the same as that in the ABS stats.

A further difficulty is that the Australian data is somewhat old, being from the ABS’ 2010-11 data. The survey is conducted only every two years. The time series shows that collaboration by large firms over the last three surveys (2008-09 to 2011-13) has declined from 11.5 per cent to 8 per cent, while collaboration by the smallest (0-4 employees) has grown from 2.4 per cent to 8.9 per cent.

So there has been some movement, but not consistently in one direction or other.

The real challenge is how different this data is to the rating that appears in the Global Competitiveness Report, put out by the World Economic Forum.

On indicator 12.04 – ‘University-industry collaboration on R&D’ – Australia is ranked 15th of the 33 countries included in the OECD report. This data, however, is derived from a survey question "In your country, to what extent do business and universities collaborate on research and development (R&D)? [1 = do not collaborate at all; 7 = collaborate extensively] 2013–14 weighted average".

There is no wonder it is a struggle to increase business and university collaboration when the business community’s self-assessment is so divergent from the measured reality.

There is no shortage of advice available. In Australia, the Australian Technology Network and Australian Industry Group jointly produced Innovate and Prosper, which has five recommendations leading with changing the weighting in block-funding. That should go further to be very simple: the more the university collaborates, the more government funding it gets.

If that means we increase government research expenditure, then that’s good only if it is because there is an equally big – or bigger – growth in research expenditure from private sector.

Research in the UK reveals that the challenges in collaboration include “a lack of trust over issues such as intellectual property, uncertainty about the potential benefits of working together, and the difficulty on both sides of finding the time for initial exploratory conversations.” US research that details the seven best practices and five myths of collaboration provides credibility that one of the key issues is the development of a trusted relationship over time.

That research measured the success of collaboration by the ‘impact’ of the collaboration on the company’s products, processes and people, rather than a distinct research outcome. One of the myths this research identifies is that there is no statistical difference on impact of the research being basic, applied or advanced.

There is plenty of evidence available on how to improve the university-business research linkages. Most of this evidence does not revolve around dumbing down the research, nor does it involve turning PhD programs into exercises in teaching PowerPoint and public speaking.

It is not just in the small numbers of firms collaborating with institutions on research where Australia has problems. It is also the modest scale of collaborations that is an issue. While Huawei has chosen not to invest here following the inconvenient government decision over the NBN, Cisco made big news announcing a US$15M investment in the ‘Internet of Things Innovation Centre’ over five years split between Curtin University in Perth and Sirca in Sydney.

It is one of eight such centres in the world, which sounds quite important. But Cisco’s the investment in London over the same five year period will be US$1 billion. That’s a long, long way from a $15 million investment in Australia.

There is an old saying in business, “if what you are doing isn’t working, try ANYTHING else.” That fits particularly with the risk-taking culture required in innovation where failure isn’t a problem, the goal is simply to fail fast

In government, it seems that the saying is “if what you are doing isn’t working, have another review.” It is time for an innovation culture in public policy!

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