Fund R&D, then maybe universities can support industry

Industry Minister Ian Macfarlane (right) wants universities to be more supportive of industry, but without significant funding into research and development, that’s a big ask. AAP

Industry Minister Ian Macfarlane let his discretion slip this week in a speech to the Queensland Media Club when foreshadowing an upcoming report on research funding and competition. Distancing himself from the awarding of funding based on prior researcher publications, he signalled a distinctly different approach that is likely to inform policy in the near future.

Noting that research grant funding “can work better”, he suggested that:

the current arrangements are based on the number of papers [researchers] produce, which is great if you’re into producing papers, but I’m into producing jobs and producing products that are commercialised from an IP that a scientist or researcher might have developed.

It cannot be denied that the minister has a point – some academics, when they write, primarily have an audience of other academics in mind. This is probably most true in the social sciences, and increasingly less true in the physical and medical sciences. However, to suggest that this phenomenon is prevalent - in any field - is simply overstating the point.

In other respects, the minister misses the point. Current arrangements acknowledge and reward researchers who garner industry buy-in (through the Australian Research Council (ARC) Linkage Projects, for example) and those that address defined national research priorities. Generally, the experts at the ARC and National Health and Medical Research Council (NHMRC) finally decide which applications are funded (prior, that is, to any ministerial veto). They would be unlikely to fund any research that lacks relevant application.

More broadly, the minister’s over-simplification of the current arrangements and his linking of patents and job creation (in the absence of more basic forms of research) does not square with much that we know about research, innovation, economic growth and job creation.

Australia among its peers

The minister has in mind, one suspects, a more innovative economy where research spurs innovation and the creation of well-paid jobs for highly skilled workers. As a vision for Australia, such an approach has much to offer.

Australia certainly lags the OECD in relation to patents, but also in relation to aggregate research and development spending. Notable among OECD nations with higher aggregate R&D spending are the Nordic nations of Finland and Sweden and other nations including Israel and Switzerland. Their governments have long adopted an activist industry policy to support high-technology industry emergence.

Common among all of these exemplar nations is a strong commitment to government investment in research and development. This commitment is sorely lacking in Australia.

Industries in other countries have more involvement with university researchers - but they also have higher R&D spending. AAP

The locale of innovation

Most international research that examines the linking of basic research, applied (commercial) research and job creation adopts a number of key assumptions. An exemplar of such work is the Triple Helix model developed by Etzkowicz and Leyersdorf. This approach emphasises the central role of universities as hosts for both pure and applied research. Indeed, it is the exploratory elements of puzzle solving that drive the essential creativity that underlies all innovation.

The US is often seen as an exemplar of market-facing university research. Yet the massive historical subsidies for pure research in materials science and information technology – initiated to assist in the development of defence-sector innovations – have created important spin-offs that today form the basis of much of the US high-technology sector.

In both the European and US contexts, universities that harbour pure researchers often form the anchor of important industrial districts. It is in pure research that academics and applied scientists develop the skills that they will later apply to develop innovations. It is impossible to sustain the suggestion that applied research and patenting can occur in the absence of the technical literacy that pure research engenders.

Indeed, if the literature on innovation districts has a common theme it is that close relationships develop between inventors of knowledge, entrepreneurs who commercialise that knowledge and institutions that facilitate commercialisation. The notion that you can skip to the commercialisation stage in the absence of a supportive knowledge base is nonsense.

Doing more with less?

The big issue, regardless of how the research pie is sliced, relates to the ongoing retreat of the Commonwealth from adequate funding of research – in universities, at the CSIRO and through funding agencies.

The processes of cutting funding started under the previous Labor government. The cuts have continued under the Coalition with gusto.

Research tends to be seen as a soft target when tough cuts are required. Researchers’ contracts simply are not renewed. They head off to other work, losing for the nation the accumulated capabilities that have cost hundreds of thousands of dollars to develop.

If the minister is serious about creating jobs, his leadership is needed to ensure that these cuts are reversed and Australian investment in R&D increases. In the current political context, researchers should not hold their breath on this.