April 13, 2021

University Research Commercialisation – IRU response

The Innovative Research Universities has submitted a response to the Department of Education, Skills and Employment’s (DESE) University Research Commercialisation consultation paper.

The IRU strongly support the Government’s intention to expand the transformation of Australia’s research outcomes into business and social outcomes, as set out in Mr Tudge’s speech of 26 February 2021.

Through improving commercialisation and translation outcomes, we can strengthen our national capacity to invest in research, creating a positive loop. The Commercialising Research discussion paper sets out several useful actions that target improving demand for research outcomes. Combined with ongoing support for universities’ research capability, these actions could improve commercialisation outcomes.

The IRU submission supports that of Universities Australia, which sets out several particular proposals to improve outcomes.

Australian research and its commercialisation

Australia’s research output is high at 3.4% of world research publications in 2020 (in Scopus SciVal), well ahead of our proportion of world GDP or population. It represents a major contribution to research development and has increased 72% since 2010 when Australia produced 2.8% of world research publications. Australia’s research growth rate has exceeded USA (18%), UK (31%) and Canada (34%). The research output of IRU members has grown 134% over the same period, a greater rate than China (121%).

Data on the transformation of research indicates that Australia is less strong but improving. Australian authors contributed to 4.1% of world research publications involving university-corporate collaboration in 2020, a doubling since 2010 when Australia produced 2.7% of world output.

Australia’s growth rate of corporate collaborations has also exceeded USA (13%), UK (50%) and Canada (31%). For IRU members, it has grown 268%, greater than China (198%).

These are indicators of a healthy public research system closely attuned to the needs of society and the economy, with great potential to do more.

A focus on commercialisation will only be successful if it ensures the whole ecosystem remains supported.

Industry is increasingly investing in Australia’s universities for their research. Direct industry funding increased from $795 million in 2010 to $1.5 billion in 2019, now accounting for one-third of total research income. This 90% increase in industry funding far outstrips growth in other research funding from competitive grants (38%) and government sources (39%) over the same period. Irrespective of who funds the research, the returns on the research far outweigh their costs. However, there are longer-term risks that can arise from overemphasising problem-oriented research directed by short-term industry needs.

Commercialisation requires a vibrant research eco-structure from the fundamental basic research through to the applied. University research is well spread across basic research (41%), applied research (48%) and experimental development (11%). This is a major shift from 2000, when basic research predominated at 55%, and brings the higher education sector closer to the business sector where only 9% of R&D is for basic research, 32% is applied, and 60% is experimental development. However, whereas universities have increased their R&D expenditure, business R&D has been flat in nominal terms for the past decade and has declined in real terms.

In 2020-21, the Government will invest $2.6 billion into business sector R&D. However, 99% of this is via the R&D tax incentive, essentially without strategic coordination. There are no direct incentives for industry to collaborate with our world-class universities.

Strategically directed government funding for business R&D research has steadily declined from $382 million in 2010-11 (17% of total funding) to only $35 million (1% of funding) in 2020-21. It is encouraging that the discussion paper recognises the lack of demand-side initiatives, offering an explicit opportunity to incentivise business to work with universities on R&D and commercialisation.

Read the full IRU submission