The Strategic Examination of Research and Development (SERD) report, Ambitious Australia, proposed six National Innovation Pillars, each anchored in a long-term national goal. A new National Innovation Council (NIC) and a National Strategy Advisory Council (NSAC) for each pillar were to set those goals.
The examination panel presented its recommendations as an integrated package, to be implemented as a whole.
The government subsequently announced plans for a National Resilience and Science Council and made other decisions that departed from the panel’s package. As a result, the report did not proceed as a blueprint for reform.
Several issues the panel raised remain relevant to future policy. This article takes up three of them: the way the report counted programs, where research translation occurs, and the part that states and territories play in delivery.
The report counted more than 150 public expenditure programs, meaning lines of appropriation taken up in that branch of fiscal policy that relates to the objectives of public expenditure management and control .
Notwithstanding, public expenditure is the main policy lever available to the Commonwealth to achieve its policy objectives. The states and territories control many of the others.
Future arrangements for setting national research and innovation priorities are therefore likely to depend on the states and territories taking part as partners.
A vision and a delivery task
The panel set out its vision in the opening pages of the report: “Australia’s research, development and innovation (RD&I) will underpin a knowledge-based, productive and differentiated economy that leads to a more prosperous, healthier, safer and more equitable Australia”.
The six pillars covered health and medical; agriculture and food; defence; environment and energy; resources; and technology.
The report gave the task of setting the pillar goals to councils that “when established, the NIC will work with the NSACs to set the goals and subgoals for each pillar”.
This division of labour had a clear rationale, since an independent panel was in a weak position to settle goals that ministers would have to own and fund.
In practice, it left the hardest step of the reform – converting an aspiration into specific choices – to councils that had to be created.
Expenditure programs and policy programs
The term program has two meanings in Australian public administration. An expenditure program is a unit of appropriation, that is, a line in the Budget papers with an amount of money and an administering agency attached. The count in Ambitious Australia appears to have used this meaning.
A second meaning comes from planning, programming and budgeting, an approach the United States Department of Defense developed in the early 1960s. Australian program budgeting in the 1980s drew on the same logic.
Under this approach, a program starts with an objective. Planners then identify the activities that contribute to it, the instruments that support those activities and the resources each requires, and they assess results against the objective.
More recently, this process has come to be described as ‘program logic’ and forms the basis of actual program design as well as program evaluation and policy review.
The downside is that it has a focus on ‘flows’ rather than ‘stocks’ including new and accumulated capabilities and assets.
Thus, public expenditure is one instrument among several to achieve policy outcomes. Regulation, tax concessions, procurement, standards, information and the ownership of public institutions can all contribute to a program’s outcome.
A policy program in this sense can draw on instruments controlled by different agencies, and more than one level of government.
Counting expenditure programs therefore raises the question of how many funding lines exist and which of them might merge.
Designing a policy program raises different questions: what outcome a priority seeks, which instruments can contribute to it and who controls each one.
Policymakers who answer the second set of questions can see activity that a count of funding lines leaves out, much of which turns out to be in the area of research translation.
Translation without a program title
Research translation covers the activities that move research findings into practical use and outcomes. The results include new products and services, changes in clinical and farm practice, improved processes in firms and better-informed public policy.
It takes many forms and proxies: licensing and spin-out companies, contract research and consultancy, test beds, living labs, pilots, regulatory sandboxes, collaborative projects with industry, the movement of researchers into firms and public organisations, and the free advice researchers give to governments, businesses and NGOs.
Translation was central to the purpose of Ambitious Australia, which sought a research system that delivered economic and social benefit on a larger scale.
Much of the return on public investment in research depends on this step. A clear view of where translation occurs, and who pays for it, is likely to help any council or agency that sets national priorities in future.
A large share of this activity goes on without a program title of its own. It is not a name that appears on the Higher Education Research Data Collection, or ABS statistical collections.
Nevertheless, universities pay for engagement and outreach, technology transfer offices, proof-of-concept funds, industry engagement staff and industry-based doctoral places partly from the Research Support Program, which appears as a single line.
CSIRO and other Publicly Funded Research Agencies (PFRAs) fund translation activity, including incubators and accelerators and services for small and medium enterprises, from their general appropriation and fee for service income. The Medical Research Future Fund supports several translation initiatives under a shared heading.
The states and territories add a further layer. State innovation agencies run voucher schemes, seed funds, precinct investments and industry partnership funds that connect researchers with firms in their regions.
A Commonwealth count leaves this activity out of a national approach. Taken together, the states and territories provide much of the connective tissue between research and enterprise, and not all of it is reflected in public expenditure.
Policymakers can bring much of this activity into view from existing sources. The National Survey of Research Commercialisation, university annual reports and strategies, agency corporate plans and state budget papers record translation spending and outcomes in more detail than appropriation lines allow.
States and territories as partners
Expenditure, including tax expenditure through the R&D Tax Incentive, is the main lever available to the Commonwealth in research and innovation. The states and territories control many of the other levers that influence whether research reaches practice.
They operate public hospitals and health services, administer land use planning and most development approvals, own onshore mineral resources and run primary industries departments with research stations and extension services.
They also shape innovation precincts through infrastructure, land and procurement. Each field covered by the six pillars would depend on these levers to some degree.
Health and medical translation relies on access to state hospitals, clinical data and health service procurement. Agriculture and food make use of state research stations and extension services.
Resources, environment and energy depend on state ownership of minerals, state approvals and state energy policy. Technology draws on state precincts and procurement.
Defence is the field most fully in Commonwealth hands, although the states compete actively for defence industry investment.
Under the governance model in Ambitious Australia, the NIC would have reported to the Prime Minister and the responsible minister, and the NSACs to portfolio ministers. The model was a Commonwealth one.
For national priorities to operate as policy programs, the states and territories would need to take part as partners in setting goals, preparing delivery plans and assessing results.
The Commonwealth is unlikely to bring state levers into play through consultation alone. Intergovernmental arrangements under National Cabinet offer one avenue for partnership.
State and territory participation in the work of the National Resilience and Science Council could offer another.
A different approach
Ambitious Australia recommendation 1d proposed that “public RD&I investment should be consolidated and concentrated to achieve subgoals through National Strategic Initiatives”.
Had consolidation drawn mainly on programs that appeared in the count, the pillars might have left out translation activity that the approach did not capture. Funding or attention could also have shifted away from that activity without anyone intending to.
The risk followed from the unit of account and not from any particular design. The same risk applies to any future consolidation and design of research and innovation programs. Governments can consolidate at modest cost before they commit to new priorities.
Before setting national priorities, the National Resilience and Science Council could map translation activity as well as appropriations, looking inside block grants, agency budgets and State programs.
A map of what already operates gives each priority a starting position and helps protect existing translation capability during any consolidation.
Conclusion
Ambitious Australia set a direction and proposed a structure for pursuing it. Government decisions since its release mean the structure is unlikely to proceed as the panel intended, although the issues the panel raised remain open.
A full view of translation activity, including activity without a program title, and a partnership with the states and territories would give future priority setting a firmer base, much as a crew preparing for a long race inspects the boat and crew on hand before it commissions new ones.
John H Howard is Executive Director of the Acton Institute for Policy Research and Innovation. He writes the weekly Innovation Insights Blog. He holds a PhD in innovation studies from The University of Sydney, an MA in public administration and policy from the University of Canberra, and an honours degree in economics from the University of Tasmania. John can be contacted at [email protected]
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