Releasing stranded technology to grow industry


Adrian Beer
Contributor

In regional Western Australia, nearly 600km from Perth, a manufacturing hub is being established to help power the clean energy revolution.

Brisbane-based company Pure Battery Technologies has commercialised research from the University of Queensland, turning a by-product waste stream of the nickel recovery process into battery minerals for use in electric vehicles.

This Australian technology company is now developing a refinery hub in the Kalgoorlie region in Western Australia which will produce enough material for about half a million electric vehicles within five years and create more than 1,000 jobs.

While ground-breaking Australian research created this more efficient and environmentally friendly solution, it had to go offshore first to reach commercial maturity.

A $2.2 million federal government grant in early 2020 enabled the company to access a refinery plant in Germany, forming a partnership with Germany-based CRONIMET group, one of the world’s largest nickel recyclers. This helped the Aussie company build its European production.

In March, the federal government awarded a $116 million Modern Manufacturing Initiative grant to Pure Battery Technologies, bringing the Australian innovation back onshore by supporting the creation of the Kalgoorlie hub.

The company has now subsequently gone on to land a seven-figure investment from EIT InnoEnergy, Europe’s biggest CleanTech investor. 

This is a real example that demonstrates Australia’s true potential. It’s a good news story highlighting the immense potential of Australian research to power the local economy and the global transition to net zero, but sadly it also showcases the chasm in Australia’s research commercialisation capabilities.

Though it does also prove Australian technology companies (with the right support) can attract international investment. 

Recently, Industry Innovation and Science Australia (IISA) chair Andrew Stevens summed up the problem. “Over the last 20 years, federal government funding of basic research has increased 400 per cent over 20 years – four times,” he said. “And yet the commercial outcomes in that same period are largely the same.

“The reality is that to continue on doing what we’re doing is not going to give us the uplift that I think we will need as a nation to actually provide for the prosperity of our children and our grandchildren.”

While I completely agree with Mr Stevens on the need to do something different, it will require more than just a few policy changes and advisory group meetings. We need to force a fundamental shift in Australia’s innovation ecosystem.

Changing the game

Research and innovation shouldn’t have to travel overseas and be developed offshore in order to be commercialised, and taxpayers shouldn’t have to stump up more than $100 million to bring it back. 

There is no doubt the ongoing success of our nation depends on our research capability, which needs to be supported. But we must stop expecting researchers to be their own channel to market. The same goes for our end market operators, even if they drive the largest portion of our industry research investment.

At the University Australia 2022 conference, Mr Stevens said: “Research commercialisation is not just a role for unis. The focus also needs to be on industry. And we need to look at it from the demand side – collaborations work best when they are needed.” 

But our current ‘industry-funded’ model bypasses a fundamental element of any industry supply chain: the vendors. For Australia to capitalise on our true potential, our focus must dramatically shift. We have to focus our support on our technology suppliers. 

Pure Battery Technologies is not the demand part of the equation that Mr Stevens is talking about, it’s the translation engine.

This engine is the driving force creating jobs, generating revenues, building our local skills and growing our national scale while serving a global market demand – in this case, the electric vehicle manufactures.

They are the ones with a commercial imperative, to deliver the University of Queensland research to market, and successfully take this to the world. 

Without a partner to commercialise research outcomes, innovation remains stranded. Stranded as IP protected in the supply chains of our large end market operators, or on the shelves of our research institutions. Excuses like market scale or high local costs are frequently cited as why this won’t work, but thankfully companies like Pure Battery Technology are proving the old guard wrong. 

If further proof is needed, then let’s look more closely at who makes up our local market. Companies from all over the world are making significant financial commitments to set up operations in Australia.

We have players from every major economy in our local market – there must be something here worth fighting for. While many folks lament the offshoring of our innovation, we should capitalise on the example set by these global companies that proves Australia is worth investing in. 

Let’s take Siemens Australia and New Zealand as a fantastic example. Not only does it invest in companies like MRX Technologies, ATC or Kaon Group; it also invests in our economy, such as the Industry 4.0 project with CirPro (Pirie Meats), or with the Victorian Government Zero Emission Bus Trials.

Siemens former Australia and New Zealand CEO Jeff Connolly was even an advisor to the IISA research commercialisation action plan. 

And Siemens is not alone – we have industrial technology giants from all over the globe operating in our local market. If international technology giants invest in our local technology, why don’t we?

There is an imbalance in Australian industry research and commercialisation funding, and one that is contributing greatly to our well-publicised failures in these areas.

These issues have seen Australia slide down in several different global innovation metrics and has seen our world-renowned research often trapped within large organisations or transferred offshore.

Public sector grants and research funding is heavily biased towards Australia’s primary industries. The investment is focused on increasing throughput, industry performance, and lowering operating costs.

In the case of the resources sector, the funding is focused on helping dig up our valuable dirt at an even lower cost and greater volumes, to maximise someone else’s value-adding opportunity when we ship it offshore.

Currently Australia participates in less than one per cent of the value chain of our critical minerals. We then buy back these critical minerals in products or services in cars or smartphones at a huge premium.

A figure included in an Austrade policy paper released in July 2021 illustrates the lopsided approach to commercialisation and value-adding in Australia.

Titled Unlocking Australia-India critical minerals partnership potential, the paper includes a figure of the ‘tripartite engagement model’, with the example recommending Australia exports its raw and unprocessed critical minerals to other countries like Japan, who could then do the value-adding production into input materials and components for export to India, to support their country’s downstream industries. 

While it is critical that we establish and maintain strong strategic relationships with our key trading partners, according to the paper, Australia’s main role in this global supply chain is just being the lucky home to an abundance of critical minerals, which we can dig up and send away as cheaply as possible for others to create value.

Why are we not aiming to do more of the value-add here in Australia? Why aren’t we making the most of our full potential, capitalising on the full value of these raw materials and their commercialisation opportunities?

Other countries have already gotten on the front foot on this issue. The European Raw Materials Alliance has a mission to sustain its local manufacturing capability.

The alliance is focused on investments into the raw materials value chain and securing access before value is added, increasing its control over advanced materials and industrial processing know-how. 

If we want to improve the sophistication of our local economy, we need to make sure we are more than just a high-tech and efficient quarry – we need to do more, much, much more. 

The missing piece of the puzzle

We’ve been pulling the same commercialisation levers in Australia for decades, so one thing that we can be sure of is that the current structure is not working. Fortunately, with the decades of sustained investment in Australia’s research sector, we have all the ingredients on the shelf.

We just need a new chef in the kitchen, to set a menu and create real value, to make Australia really cook. And our Pure Battery Technologies example is just an entrée of what is on offer. 

With a new government, the heightened awareness of the importance of sovereign capability and local manufacturing and the push to reach net zero emissions by 2050, there is maximum potential.

We have the chance to act now to build real sustainable value. We can maximise the value of our resources, talent and innovations here in Australia, and reap the full economic benefits from them. This vast opportunity is not limited to the resources sector.

While there is merit in prioritisation, we should also think carefully about how much we focus on industry sectors. If primary industries are central to our innovation strategy, there is a strong chance we will miss out on recognising cross-sector demand.

We found across the Industry Growth Centres program that many of the sectors that drive our gross domestic profit (GDP) are facing similar challenges, and not just in skills or investment. Be it sustainability, low emissions technology, digital technologies including data, analytics and AI, or robotics and automation, these capabilities were in high demand across multiple industry sectors. 

Doing a better job of commercialising innovation benefits all sectors. When innovation is not constrained to the market that funded its development, it can realise a far greater market potential.

With our end market industry funding, outcomes are typically measured by the number of PhDs, the number of papers published and the number of patents granted. If this is the end game, we stop well short of our full potential.

This leaves Australia’s best research and innovations stranded in our research organisations. Unfortunately, published papers on their own will not create economic value from our world-leading research, even if they can be freely accessed.

Public research funding must insist on having partners who will productise innovation – companies which intend to commercialise our world-class research and want an economic return on investment.

We also need companies which are motivated to serve the widest possible market. Increasing the opportunity for revenue growth, export development and job creation has a multiplying effect on our national economy. 

Unlocking the locked innovations

There is currently an extraordinary volume of stranded technology sitting within the supply chains of our primary industry firms in Australia, or sitting on the shelf of research organisations.

The Australian ecosystem currently misses the companies that exist to generate profits by productising innovation and meeting the demands of multiple industry sectors.

These are the companies which serve to commercialise stranded technology and maximise the potential of these innovations that are currently only embedded in the supply chains of primary industry players.

Instead of going to the large companies which are controlling the intellectual property and stifling innovation from reaching a wider market and reaching its economic potential, these technologies need to be going to the companies which will take full advantage of them.

The key to this issue is unlocking the technology and innovation stranded within large companies in Australia that has been born out of our world-class research. We need to focus our investment in our local translation engines, the companies which can commercialise innovations and sell them to the world. 

If multinational corporations from all over the world are capable of taking advantage of Australian innovations, scooping them up and taking them offshore, then why can’t we from here, within our local economy?

Reaching net zero

Unlocking Australia’s stranded research will enable us to play a much more significant role in the global priority to reach net zero emissions. 

The world is transforming to meet the needs of a globally sustainable future. One of the most direct pathways to lower global emissions is to quickly and efficiently unlock the technology that is stranded in our innovation ecosystem, in large firms or in research institutions. 

Australia has opportunity in both the supply and demand for clean energy. This sustainability and climate change imperative could be the catalyst for improving Australia’s commercialisation woes, with companies like Pure Battery Technologies being great examples of the role we can play.

Creating a local market with greater supply could attract international investment into our economy. New innovation is crucial in the production and development of electric vehicles, and we have countless other Australian businesses working on the frontline combatting climate change. 

In turn, this would also increase the local demand for greater downstream supply of critical minerals and energy metals. Boosting investment in more onshore processing and downstream value-adding can help secure valuable supply chains. Commercialising this locally will also create major growth levers for the Australian economy – it’s a win-win proposition.

Australia can be a truly global tech hub

Like the Siemens example earlier, just about every global technology company from around the world is here to serve our local market. If the Australian market is big enough for them to come down, it’s certainly big enough for us. 

I was fortunate to have the opportunity to work for two such companies. I spent the best part of 10 years on planes seeing the world’s best innovation in action.

When I was with the General Electric Company (GE), our local CEO would remind us that Australia was GE’s second largest country by revenue after the US.

In my last organisation we integrated what was then Australia’s largest global software business into one of the world’s largest robotics and automation companies. 

This leaves no doubt in my mind that as a nation we have the capability. We genuinely have an innovation ecosystem that we should be proud of, and areas where Australia leads the world. But we cannot keep complaining about our innovative technology going offshore, if we don’t provide the support to scale it here locally.

There really is no excuse. The problem is not lack of scale, or that we don’t have a large enough market to support homegrown technology. We cannot just focus on the demand for innovation, or we will miss our full potential. A marketplace has a supply and a demand – and one cannot exist without the other.

The greatest Australian innovation does not always have to be scaled by someone else, and it should not have to escape to succeed. I hope as my children complete their studies and look toward their own futures, that they get to see how great our innovation can be, and there is no reason why it should not be with an Australian company.

The sustained investment by our primary industries into our local capability has produced a world-leading research sector to be proud of. We must keep supporting the funding of researchers to do research, and we continue to let industry define our research demand. 

But when it comes to commercialisation – let’s invest in the right place. We need to build our local technology sector and help it do what it does best. There’s only one thing stopping us from translating our locally researched innovations into products and services to be delivered by Australian tech companies and serving global markets, all from within our national economy.

And that’s the status quo. With some new policy levers being pulled and a commercialisation rejig, we can become a global tech hub in our own right.

Adrian Beer brings extensive experience in the application of technology to the mining sector, and he is an advocate for cross-industry innovation and technology adaption. Adrian has held senior director or board advisory roles at SmartSat CRC, ABB, Austmine Limited, General Electric and the Newcastle Institute for Energy and Resources.

Do you know more? Contact James Riley via Email.

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