Australia’s brilliant minds produce world-class research, but a focus on academia instead of commercialisation is leaving potential products back in the lab, writes Nicky Phillips.
Ian Frazer knows how to prevent and treat herpes – in mice. Next year, the prize-winning immunologist behind the cervical cancer vaccine will scrutinise clinical data to determine whether his vaccine for the sexually transmitted virus – which infects one in 10 people – is safe and effective in humans.
”The vaccine is designed to prevent and treat infection,” Frazer says. “But even if the trial results are positive, there is no guarantee a single person will be injected with the serum.”
“Spray on skin” … a skin culture treatment for burns victims, developed by Dr Fiona Wood at Royal Perth Hospital. Photo: Evan Collis
For that to happen, Frazer and the University of Queensland spin-off company set up to develop the vaccine, Coridon, will need to convince a pharmaceutical giant to part with $20 million to fund a phase-two clinical trial. If he pulls it off, the scientist will be one of the few who successfully commercialise their discovery.
Within the walls of this country’s research institutes and universities brilliant minds produce world-class research. But when it comes time to transform ideas beyond the laboratory bench into a commercial product or service, Australia suffers from a failure to launch.
While scientists here publish peer-reviewed research at almost double the OECD average, those same individuals file for patents – a measure of innovation success – at less than half the rate of our first-world counterparts. The problem is not new, but as mining companies empty our soils of valuable minerals, many in the research industry agree Australia’s next resource needs to be its brain power.
Bionic advance … a cochlear implant allows profoundly deaf people to hear. Photo: Craig Abraham
The former Queensland premier Peter Beattie, now the director of the Medical Research Commercialisation Fund, says in this century of innovation Australia risks being left behind. ”We have got to better commercialise our research,” he says. ”That is Australia’s future.”
On the 2012 Global Innovation Index (co-published by business school INSEAD and a United Nations agency), Australia ranked 23rd overall, but came in 107th out of 141 countries in terms of innovation efficiency – the number of inventions the country generates compared to its regulatory environment and number of skilled innovation workers – behind Georgia, Malawi and Colombia.
The reasons behind the commercial struggle are complex: for one, the research culture in Australia sees almost three-quarters of all researchers spending their careers in academia rather than industry.
”In Australia, if you do research you kind of expect to be a professor and be in a university and get tenure and grow old,” says Science & Technology Australia’s CEO, Anna-Maria Arabia. ”In the US, you do research to become a business person, an entrepreneur.”
This situation is reinforced by the federal government’s research funding structure, which hands over grant money to academics who publish their work in journals, a disincentive for those who choose to innovate.
Of the roughly $9 billion of public money that funds research each year, experts say less than two per cent is spent developing that research into a commercial product.
The venture capital market in Australia is immature, but novel ways to finance technology start-ups, such as investment from superannuation funds, are yet to be explored. And while every now and then a golden idea transforms into a life-changing device, many experts agree the research efforts of more scientists need to be focused on the technology demands of industry.
Australia has an enviable research record: we are global leaders in pancreatic cancer, solar photovoltaics and quantum computing to name but a few, and we rank seventh in the world for the number of scientific publications per 1000 researchers.
”That is quite an achievement,” says Australia’s former chief scientist Robin Batterham.
Such work has won the country four Nobel prizes in the past decade, help land huge projects like the Square Kilometre Array and profit from a series of significant discoveries – including the new Hendra vaccine for horses, released by CSIRO scientists last week.
Such a formidable research reputation is the reason thousands of international students descend on our shores each year to study, says Batterham.
The radio astronomer John O’Sullivan’s work peering at millions of deep-space images as he searched for exploding mini black holes in the late 1970s is one success story. O’Sullivan developed a technique to process the images more efficiently. Forty years later, more than a billion mobile phones, laptops and printers use the technique to connect to the internet remotely – a technology now known as wifi.
While O’Sullivan never did find any mini black holes, his experience highlights the importance of scientists being left alone to ask big questions that may not have initial real-world applications.
”Our basic research is world-class,” says Peter Beattie, ”our commercialisation is not.”
But for scientist to become a synonym for entrepreneur there needs to be an incentive to do so. Anna-Maria Arabia says instead of just rewarding academics who publish in high-ranking peer review journals such as Nature and Science, the government needs to honour those who innovate or spend time gaining industry experience.
”One of the ways to bring the business culture here is having people with joint appointments – [they] can be [a] leader in a business and also hold a position in a university.”
Arabia points to the 37 Co-operative Research Centres as an ideal marriage between research and industry. The program, overseen by Professor Tony Peacock, places scientists in the same research facility as corporate types with sound business nous to solve some of the big problems facing Australia. To date, the centres have developed next-generation contact lenses and hearing aids, feral animal bait and cancer drugs.
While the outputs of these centres will have contributed $14.5 billion to the nation by 2017 – from an input of just 2 per cent of the government’s total annual innovation spending – the program has become an easy target for cash-strapped departments in recent years.
Its budget has been reduced from a $200 million high in 2007 to $154 million for the next financial year. The cut illustrates the disparity between the way the government funds basic research and projects that aim to commercialise it.
At present, scientists receive grant money to conduct research until the point they have to prove ”it has legs and can be marketed”, says Arabia. Without funding for so-called ”killer experiments”, many discoveries languish in a laboratory, never to see the light of day.
One of the other issues Arabia sees is the assumption by governments and universities that investment in high-quality research will result in enough ideas that transform into commercial successes. ”We need to engineer this a little more. We need to ask industry what their problems are,” she says.
Robin Batterham believes the needs of industry are just as important as the light bulb moments generated by scientists. ”What industry wants gets almost no attention,” says Batterham, the president of the Australian Academy of Technological Sciences and Engineering.
In a report to the current Chief Scientist of Australia, Ian Chubb, Batterham wrote that the OECD found demand-driven programs were more likely to generate better outcomes. ”When you get into industry you get a sense of what are the key issues and it helps focus at the application end and contributes to greater success,” he says.
Professor Chubb agrees Australia struggles to produce significant economic benefits from research compared with some countries.
”It’s a cultural issue, and I suspect that’s the single hardest thing to change,” he says. ”But we can’t pretend that it will correct itself if we don’t take action.”
His office will present advice to the government on how the problem can be remedied next month.
After more than two decades of research, Melbourne gastroenterologist Bob Anderson developed a vaccine against a disease that affects about one in every 100 Australians: coeliac. With the Walter and Eliza Hall Institute, Anderson carried out the first human trials last year.
But when it came time to carry out stage-two clinical trials, the institute could not raise the roughly $20 million in Australia.
As a result, Anderson left for Boston, where venture capitalists offered to fund the institute’s spin-off company, ImmusanT.
While the institute was happy to launch the company in the larger market of United States, the coeliac vaccine demonstrates the difficulty start-ups face raising capital.
Australia’s most recent Nobel laureate, Brian Schmidt, says: ”If I had a brilliant idea and I had to try and find money, I don’t know what I’d do. It would be almost impossible.”
But many people, including Arabia, Professor Tony Peacock and Beattie, believe the nation’s super funds could earn considerable money by investing in local technology companies. ”Australian super funds are the third or fourth largest block of money on Earth – $1.3 trillion – so there is capital here, but it’s not getting applied to good ideas,” Peacock says.
The head of AusBiotech, Anna Lavelle, says investment will follow tax incentives and reduced government regulations. While the governments’ new research and development tax incentive, introduced in July, was a good start, the regulations around the biotech industry cost time and money without increasing safety for the consumer, she says.
”In Europe you can get through these processes in a matter of weeks, in Australia [it] may take you 12 to 18 months,” she says. ”It makes us uncompetitive and means people like you and me miss out on new medical innovations because companies chose not to come here.”
Most people accept that not all research will result in big wins like a cervical cancer vaccine and wifi.
The chief executive of NewSouth Innovations, Kevin Cullen, says studies have shown that universities generate 95 per cent of their commercialisation income from about 5% of their IP.
Last year the University of NSW set up its Easy Access IP (intellectual property) scheme. It allows companies free access to patents the university considers will not be commercial big hits – the vast majority of IPs.
To access the patents, companies had to agree to use it to benefit society – through jobs, products or improved efficiencies – and acknowledge the university’s contribution. If not exploited within three years, the intellectual property is returned. ”It’s not just about getting maximum financial returns from IP, it’s also about getting the knowledge put to good use,” Cullen says
November 12, 2012