The enthusiasm which Assistant Minister for Innovation, Wyatt Roy, is investing into his portfolio is most welcome. In particular, his willingness to get out into the market to give exposure to the entrepreneurial community is to be commended.
He has just returned from his second trip to Israel, exploring the country’s startup and innovation scene, with the second visit publicised in a much bigger way than the first, given his higher government ranking now.
There is another country though, apart from Israel and Silicon Valley, worth visiting because it has established a highly durable and successful, national innovation network serving one of that country’s core knowledge verticals.
It is a network:
- that was built on the country’s particular innovation demographics
- that was enabled though a sensible balance of private and government support, and
- that energised what was previously a mostly unrecognised and dispersed source of innovation capability.
The network has secured local commitments of risk-taking and long-term private capital and operates processes that provide an accessible, predictable and timely procedure for innovators to access this private investment capital. It has the facilities to incubate the startups that receive funding.
Equally importantly, the network has been successful to bring the accumulated knowledge and connections of the members in its vertical to bear on each innovation opportunity. It operates with scale, and has now established a substance that gives it global visibility and credibility within its vertical.
The network’s returns have been rewarding for the investors, and for the innovation members, both financially and in terms of their broader missions. The network’s governance remains directed not only at these financial rewards but also the efficacy of the arrangements for its members.
And finally, through the collaborative structure of the network, there has been a diffusion of the knowledge held by the network’s members and it is also now apparent that these accumulated innovation insights are feeding back into the operations and thinking of its participating members.
This accumulation and diffusion of knowledge is a key policy outcome for this country.
The most convenient thing about this country visit is that the Assistant Minister will not have far to travel because, of course, the country in question is Australia and the innovation network is the Medical Research Commercialisation Fund (MRCF).
The MRCF is a collaboration of 50 of our Medical Research Institutes and affiliated hospitals. Each member Institute is entitled to present its commercialisation proposals and is assured of fair consideration.
The MRCF mobilises the knowledge of the commercialisation personnel across the Institute network and combined with this, is a prodigious pool of knowledge, experience and global research and market connections.
The MRCF works not because it replicates the Valley or Israel, but because its design recognised that we are a country of only 23 million people, mostly with exiting links or at most 1 degree of separation, and that it is our natural inclination to work in collaboration.
The point being – there is value in observing the innovation experiences and policies of other countries (and in this regard there is also value to study failure as well as success), but this outward observation needs to be matched with perspective and insight on our own circumstances.
As noted we are a country of only 23 million people, the majority of which live in and around 5 cities and with a modest effort, our regional communities are able to be connected into collaborative innovation networks.
We have only about 100-120 research institutions, split about equally between universities and specific research organisations.
Each of these organisations has commercialisation staff which represent a highly under-utilised innovation resource, a resource which we know can be enabled through collaboration.
The combination of our 5 central city locations and good communications/travel infrastructure means that such national collaborations are readily possible. We are now establishing Industry Growth Centres which offer the opportunity, together with Austrade, to deliver effective knowledge and capability in insinuating Australian innovation into global supply chains.
And contrary to popular belief, we are entrepreneurial and risk-taking in spirit but do this better when able to give each other a hand up (as opposed to a hand out).
And two other important lessons of the MRCF are that good process encourages capital investment but good processes need time to develop and settle.
There is no evidence giving priority to incentivising capital investment will lead to good process and in fact, seeding the system with ‘dumb’ money is more likely to be counterproductive to innovators and investors alike.
Finally, it is to be observed in this country visit that the founding member, investor and government commitments gave the MRCF time to develop and mature its processes and capabilities which has underpinned its efficacy and productivity in delivering positive outcomes for its participants and for innovation policy.
And a final note: congratulations to the Queensland Government for its matching fund which has been modelled on the very useful NZ VIF scheme. But worth remembering that the NZ VIF Scheme was designed by an Australian. So again, sometimes the innovation country to study is our own.
Paul Cheever is Chief Executive Officer and Director of the Australian Institute for Innovation. The AII is a not-for-profit organisation whose mission is to bring practical experience to inform Australian policy and program discussions on the innovation system and innovation investment.
*Photo Credit: iStock