Put simply, most Australian innovators and entrepreneurial firms do not have access to affordable capital, especially when they need $2 million to $10m to invest in building prototypes or a manufacturing plant. This is where so many of our brilliant innovations and IP fall over or move offshore.
There is no clear consensus on why so little of Australia's world-class IP has been successfully commercialised in this country. However, venture capital in Australia is often conservative and institutional investors are more comfortable in investing in tangible assets. They fail to recognise the value that IP contributes to a business. Others claim research and IP are undervalued in Australia. Simply, the big money is made offshore.
And that's Australia's trouble spot. As a nation, we are investing billions of dollars in pure and applied research to generate IP. The trouble is, we are not making returns by exploiting it.
This is a business model that does not make economic sense. It is unsustainable. We cannot afford to let our best innovations be exploited offshore with little or no return to Australia. Surely there are better ways to capture the value of IP in Australia.
One of the most glaring problems is the gap between publicly funded research bodies and industry. Different worlds, different cultures and different mindsets. The result is destruction of shareholder and nation-building value. Experts tell us that successful commercialisation requires an alignment of stakeholders.
Speaking recently at an advanced manufacturing seminar on value exchange between R&D providers and industry, Ken King, chief executive of nanotechnology niche firm Micronisers, said the priorities of industry were different from those of research organisations, especially universities where the "publish or perish" culture makes it unattractive for academic experts and scientists to spend time on short-term and demanding industry projects. There is often a disconnect between expectations of academics conducting long-term research and industry wanting fast results in sales, market share and environmental impact.
Success for researchers is typically through showcasing their work at overseas conferences and publishing articles in top journals.
The Advanced Manufacturing Co-operative Research Centre at Swinburne University of Technology in Melbourne is working to bridge this gap by co-investing in high-impact projects using federal funds with industry cash and in-kind contributions from R&D providers. A cornerstone of our efforts is to facilitate agreement between industry and R&D providers on key project and commercialisation issues. In a nutshell, this provides high-quality R&D for businesses with a clear path for commercialisation.
These project agreements compel industry and R&D providers to agree upfront on how they will share and commercialise the IP. The Advanced Manufacturing CRC looks at the business model and capacity of the technology to transform an industry, and the management capacity and track record of the industry and R&D providers in the area of commercialisation.
More and more businesses are signing up. Established advanced manufacturing firms such as ANCA, which exports up to 95 per cent of its robots, enjoy access to top research teams and world-class IP through the matching.
New entrepreneurial firms and small and medium enterprises, which sometimes lack the experience and skills to commercialise IP, have access to various programs such as the Enterprise Connect (for example, Researchers in Business) and commercialising emerging technologies schemes.
However, it is at later stages where large investments are also required, where government, industry and institutional investors need to collaborate in setting up suitably large funds to facilitate and accelerate the commercialisation of our best IP.