Australia’s untapped university innovation

By Leon Gettler
Monday, 12 September 2011

 V-Tol Aerospace, a Queensland based company that develops unmanned aircraft systems, has teamed up with the University of Queensland to launch the Australian Unmanned Systems Academy (AUSA).

 The academy is designed to create a new industry, educating students and organisations in unmanned systems and technology.

 Also in Queensland, a biotech venture Vaxxas recently received $15 million of venture capital funding from US interests, to develop a needle free vaccine product.

 Its creator, Professor Mark Kendall, works at the University of Queensland’s Australian Institute for Bioengineering and Nanotechnology.

 Meanwhile, the world’s first IBM Research and Development Centre has launched at the University of Melbourne’s Parkville campus.

 The lab, funded by the Federal Government, Victorian Government and IBM, is to look at such issues as managing natural disasters, fighting disease, boosting agricultural yields and biotechnology.

 These are some of the examples of how universities and business are working together to build new industries.

Unfortunately, they are far and few between. Australia has no tradition of university-industry collaboration and experts say it is an area we need to develop.

 Pioneering start-ups have regularly started life on campus (take Facebook’s Harvard birth, for example), but Australia appears to be lagging in getting its university-based ideas to market.

 Similarly, small businesses are generally failing to take advantage of the innovation and entrepreneurial thinking rife within Australia’s universities.

Australia is very unlike, for example, Germany where manufacturers enjoy a key advantage in research and development with close links with universities.

The German Government supports these partnerships through incentives like those that allow universities to patent and license innovations.

Australia’s situation is also very unlike America, where much of the funding for universities comes from the private sector, fostering collaboration between academics and business leaders.

Universities are massive store houses of technical skills and expertise that can provide businesses with cost-efficient R&D. The challenge is bringing the two together.

Doron Ben-Meir, the chief executive of Commercialisation Australia, says the level of university-business collaboration we’re seeing now in Australia is “the tip of the iceberg.”

“It’s really a case of universities opening themselves up to the opportunity in the first place and wanting to engage with industries and marketing themselves in that regard,’’ Ben-Meir says.

“Unfortunately to date, universities have been a little bit opaque to traditional industries and they need to open up.”

“The company has to see there is an opportunity to take advantage of the technical skills that might exist within the university and the university has to see the advantage of collaborating with the company.”

“But the real question is when the rubber hits the road and the individuals have to work together, can they work together effectively?”

“Historically we haven’t done a lot of it which means not many at universities have the experience of working with industry as we would like, so it’s going to take some time for them to get familiar and comfortable.”

He says part of the problem is that universities and businesses are working to different agendas.

“If you are entirely motivated by providing papers, and having them published in various journals is the primary focus of your activity and not engaging with the company, then the company might have a problem with you doing that because the intellectual property might have to be protected in some way.”

That said, there are examples here of universities working with industry. There are pockets where it is happening. The problem cuts both ways, as both universities and businesses struggle to connect to each other.

Daniel Leipnik, chief executive officer of the Specialty Group, which produces coated, laminated, and composite enhanced products for a range of industries, says universities have tremendous potential for collaboration.

But often they can’t build the links with industries because that’s not what their business is about.

“There is certainly a very talented pool of scientists that exists at the universities which can be accessed,’’ Leipnik says.

“Certainly on the flipside, universities can have difficulties in working with industry. There hasn’t really been a business structure. Their business structure is on educating students.”

He says one reason why businesses don’t work with universities is that they don’t know who to approach. Universities are enormous bureaucracies.

“They don’t know if the universities or research facilities have an expertise that can support industry,’’ he says.

“They may not necessarily be aware of government support which can help the whole collaboration.”

Still, he says more universities are moving in this direction. A number of universities such as Deakin and RMIT and research institutions like CSIRO have created jobs for commercialisation and program managers.

“There are opportunities in this space and a lot of universities are waking up to that,’’ he says.

“It’s not just the extra revenue that can come in but it’s the access to industry and it’s having students working in an industry setting. And also, it can become a real vehicle for some of the research to come to fruition and be commercialised.”

 The Specialty Group works with a number of universities. These include RMIT, James Cook University and Australian National University.

 The RMIT project, for example, has two engineering Masters students working with the company to develop solar roofing material.

 For the last 20 years, the Australian Government has been trying to bridge the gap between universities and business.

 In 1991, it established Co-operative Research Centre (CRC) program between universities, or research institutes associated with universities, and business.

 Australia has 44 CRCs which act as a broker between the two parties, bringing them and sometimes tipping in some funding. Significantly, the Speciality Group works with the Advanced Composite Structure CRC.

 Managing director of the Advanced Manufacturing CRC Bruce Grey says there are several reasons for the lack of collaboration.

 The first is that Australia has a higher proportion of small- to medium-sized businesses, compared with other countries.

 “They’re not experienced at carrying out collaborative research, it’s difficult for them,’’ says Grey.

 “The greater bulk of our SMEs are risk averse and don’t want to do R&D because it’s risky and has a long pay-back.”

 Secondly, there is an issue with the researchers themselves, who can take government funding without a requirement to commercialise their research.

 Another problem is the gaping chasm between the agendas of universities and business.

 “When you have this disconnect between the private sector and publically funded research institutions, you don’t get a united approach to planning research,’’ he says.

 “Contrast that to a selection of large manufacturers conducting their own R&D or a cluster of smaller manufacturers collaborating to do R&D, they have a much better understanding of their market and what the market needs and where the technology is going and how their research might serve that market.”

 “Researchers working in isolation don’t really understand the market in which you are doing the research.”

 The final reason, he says, is that government programs do not demand a commercial return.

 He says that while some universities and companies have formed linked with overseas entities, they tend to attract more interest from overseas companies. There is little venture capital funding, either here or from overseas.

 Ben Meir says one way to address the problem is to look at the way research is funded. Potential outcomes that go beyond academic requirements need to be added as well. The collaboration will take off when commercialisation is built into the model.

 However, the work that universities are doing with businesses here is very much on the cutting edge.

 One example is a project between MBD Energy, a Melbourne based company focused on adoption of safe, commercially and environmentally sustainable carbon capture and recycling and James Cook University.

 This project could transform the energy and agricultural industries, focusing on using microalgae for carbon capture. Microalgae are unicellular photosynthetic organisms feeding off sunlight and carbon dioxide and converting them to sugars, oil and protein.

 Another AMRC project is the research going on at RMIT looking at zinc oxide nanoparticles, which are excellent UV absorbers.

 RMIT is designing ways to measure the immune balance for a range of sun screens and topical formulations.

 The aim is to create better and cheaper formulations in an industry worth billions of dollars globally. The project involves two Victorian-based companies – Micronisers and Baxter Laboratories.

 In the area of manufacturing, RMIT and ANCA, the Bayswater-based manufacturing business which supplies the machines that manufacture cutting tools, are working on a project to create longer lasting drills at the cheapest possible price.

 These drills are supposed to cut their way through composite materials made from carbon fibres, epoxy resin and fibre glass.

 It is anticipated these particular drills will last 10 times longer than normal. With 99% of ANCA’s revenues coming from offshore, the company anticipates selling these low cost drills into the global market.

 Deloitte chief strategy officer Gerhard Vorster says in this competitive climate where R&D spending is critical, business needs to work with universities.

 “Regardless of whatever regulatory or policy framework, companies will be foolish not to explore the possibilities of alignment with universities in general,’’ Vorster says.

 “This is not just driven by their research and development and by new products and services. It has everything to do with innovative human resource management practices ensuring people are ready for the job sooner than later.”

 As part of its commitment to collaboration, Deloitte has a Fast Track program that takes in students from RMIT, Macquarie University and the University of Sydney.

 It brings them into the company and gets a lot of value from their cutting edge work and research. Deloitte also encourages its partners to be actively involved with universities, creating deeper links with the business.

 Still, Vorster concedes Australia has a long way to go.

 “I don’t think we have bridged that gap between companies and universities at all yet,’’ he says. “It’s a latent source of innovation, especially when you look at the way we define innovation which is value created out of fresh ideas.”

 “We haven’t seen much of that in any programmatic way. We have seen some concentrated research that has led to some enhancement within companies but it is not a tsunami yet of innovation. We have to learn from places where it works well.”

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