Sofitel Hotel
Melbourne
[Check Against Delivery]
The ANU occupies a unique position in the Australian university system.
It is our one national university.
It has a distinguished record of public service, including service to Parliament, providing timely information and expert advice on countless aspects of domestic and international policy.
And, consistent with the purposes for which it was first established, it has a powerful focus on research.
In fact, around 90 per cent of ANU’s budget is spent on research activity.
Introducing the ANU Bill in 1946, J. J. Dedman described the Chifley government’s vision of an institution that would “bring credit to Australia, advance the cause of learning and research in general, and take its rightful place among the great universities of the world”.
That vision has been handsomely realised.
ANU finished sixteenth in The Times Higher Education Supplement World University Rankings and fifty-seventh in the Shanghai Jiao Tong University’s Academic Ranking of World Universities last year.
It was the only Australian institution to make the top twenty of The Times rankings and one of only two in the top 100 of the Shanghai rankings. The other one was the University of Melbourne which as the Vice-Chancellor Ian Chubb modestly pointed out, finished a fair way behind the ANU.
In an ever-changing world, however, no university can afford to rest on its laurels – not even a university as fine as the ANU.
We must all be ready to renew ourselves in response to emerging challenges and opportunities. We must all be ready to innovate.
A culture of innovation
Innovation flourishes in an environment of freedom, openness, democracy and diversity.
That’s what I’m determined to create.
An environment that sustains a variety of research styles and an environment that produces a multiplicity of outcomes.
J. J. Dedman went on to talk about our responsibility to ensure that people “enjoy the fruits of ... developments in science and human relationships”.
The idiom is old-fashioned, but the principle is timeless. It is still our responsibility to make sure research advances the public interest and improves people’s lives.
Dedman was also right to insist on a balance between science and the disciplines concerned with what he called “human relationships” – the humanities and social sciences, including law and economics.
The challenge
One way we can make sure the community enjoys the fruits of research is by strengthening links between universities and industry.
At present we rank last out of twenty-six OECD countries for research collaboration between industry and universities, and second last for research collaboration between industry and public research organisations.
This reflects a wider problem.
Australia is well below the OECD average for business expenditure on R&D.
In 2005, the ABS found that only one Australian firm in three had introduced an innovation – in products services, operations or organisation – during the preceding two years.
We have only eight PhDs per thousand in the workforce, compared to eleven in the United States, twenty in Germany and twenty-eight in Switzerland.
Strengthening links and increasing collaboration between business and the research sector requires cultural change on both sides.
Our universities must be more willing to reach out to industry. That doesn’t mean that all their research has to have an immediate commercial focus.
But it does mean universities should be receptive to partnership opportunities where they make sense. It also means that research with potential value to industry should be easy to find and use.
Business leaders take a keen and legitimate interest in creating wealth and meeting their immediate commercial objectives, but in my experience they are also interested in the broader questions we face as a society.
The industry leaders I deal with are intensely interested in the big picture.
They understand that the preconditions for democracy are also the preconditions for profitability.
They understand that new knowledge creates new economic opportunities.
They understand that social exclusion and intellectual stagnation are bad for everyone – and that everyone therefore has a stake in building stronger communities and a genuine culture of innovation.
The evidence for that is before us here today.
The fact that ANU is reaching out to Victorian business – and that so many high-powered industry leaders have responded – shows that the time is ripe to lift the level of engagement between business and the academy.
Improving our research effort
Apart from commending your example to other universities and business leaders, what is the government doing to bring about the cultural change I’ve been talking about?
For a start, we are tackling the skills shortage in science and research, which is just as grave as the skills shortages elsewhere in the economy.
After growing by 9 per cent a year in the 80s and early 90s, the number of students starting research degrees has flat-lined over the last decade.
With almost half of our tenured academics aged over 50 and moving towards retirement, we need to be increasing the level of research training, not letting it slide.
According to a study undertaken – but ignored – by the previous government, we are heading for a cumulative shortfall of 19,000 scientists and 51,000 engineers and engineering tradespeople by 2013.
It is essential that we turn that around.
With that in mind we are doubling the number of undergraduate scholarships and halving HECS fees for new maths and science students.
We are also doubling the number of Australian Postgraduate Awards for PhD students.
As well as meeting the needs of universities and research organisations, this will increase the supply of highly qualified researchers for industry.
People with PhDs should not be a rarity in business. They should be an integral part of the skills mix.
We are also honouring our election commitment to establish the Future Fellowships program, which will give 1,000 mid-career researchers time out to undertake a major research project. We expect the fellowships to lure some of our gifted expatriates back to Australia.
Our most far-reaching reform, however, will be the introduction of mission-based funding compacts for public universities.
The compacts will set out the government’s expectations in relation to education, research and research training, community outreach and innovation.
They will create a less centralised, more flexible environment in which each university can respond to the needs of the community that sustains it, whether those needs be social or economic. Institutional autonomy and academic freedom are foundation stones for the development of an innovative culture.
These compacts will recognise the breadth of university activities, and the differences between institutions. They will give universities more operational autonomy and flexibility.
Most importantly from the point of view of this gathering, they will give universities a clearer focus on knowledge transfer and industry collaboration.
Some have argued our universities should be more market-driven, but I think we have to be wary of narrowing our horizons.
We certainly don’t want universities hanging on the hourly mood swings of the ASX.
They should remain places where people have time to think. What compacts will do is give them new things to think about.
The hubs and spokes model of research organisation we are developing will have a similar effect.
The idea is to create research networks by identifying one or two university departments as national hubs for each discipline, and linking researchers in other locations spoke-wise with colleagues and resources at the centre.
Any institution can become a national focus for a particular discipline if that’s where the best and most important work is being done.
The aim is to get maximum value for our public research dollars by minimising duplication. It’s to make university research more responsive by encouraging researchers to adopt a national outlook.
An expansion of research training; additional support for research projects; and structural reform to make universities more alert to the wider world will all increase opportunities for collaboration between industry and the higher education sector.
Research policy is not a matter of purely academic interest. It has practical implications for how well we do socially and economically. It drives innovation. It concerns everyone.
That’s why I’d like to take this opportunity to announce important changes to the Australian Research Council’s funding programs.
We can’t demand that business become internationally competitive while shielding our researchers behind protective barriers.
With that in mind – and in keeping with our election commitment to internationalise Australia’s innovation system – we have made “enhancing international collaboration” a priority for all ARC fellowship schemes.
The ARC will award Future Fellowships to the very best applicants, irrespective of nationality. We want to bring these scholars to Australia. This is how our competitors operate.
It will award the ARC’s Australian Postgraduate Awards (Industry) to the highest calibre postgraduate students, regardless of nationality.
And it will remove restrictions on the use of ARC funds for travel by international research partners.
It is incredible that, under the old guidelines, despite all the rhetoric about globalisation, xenophobia stalked our international program. I find it extraordinary that there was an implicit assumption that we should not be spending money on “foreigners” travelling to meet with Australian universities.
Our aim is to attract the world’s best – who may or may not be Australian – and to get them working here on problems that matter to us.
Other initiatives
Research policy is important, but it’s not the only string to our bow.
One of our most significant new programs for industry is Enterprise Connect.
This is a $200 million initiative to give small and medium-sized businesses better access to new ideas, know-how and technologies.
Few of you may come from the SME sector, but I’m sure many of your clients, contractors and suppliers do.
Their productivity affects your bottom line.
With productivity growth struggling along at below-average levels for the last five years and slumping to zero in 2007, the need for action on this front is more urgent than ever.
Enterprise Connect will create a network of knowledge-creation and knowledge-transfer sites around the country. There will be five new manufacturing centres and five dedicated innovation centres.
There will also be a $10 million scheme to support the placement of university and public research agency researchers in businesses with new ideas that will benefit from expert input.
Beyond that, we are waiting on the findings of the national innovation system review chaired by Dr Terry Cutler, which began in January and reports in July.
The review panel has been asked to make recommendations on principles, priorities, programs and regulation.
It has established working groups to look at two areas of particular importance to business innovation.
The first is the R&D tax concession. It’s time to consider how well it is working and how it might be changed to improve innovation outcomes.
Australia reduced its support for industry R&D a decade ago at a time when most other OECD countries were maintaining or increasing theirs.
As a result, business expenditure on R&D fell in 1996-97 for the first time since ABS records began – and kept falling for four years running.
Although private R&D investment is rising again, we are still a long way behind, and we need to think carefully about the future structure of the concession.
I have already asked the innovation review to consider the merits of a premium concession for public-private research collaboration.
We also need to look at the R&D tax offset. It is only available to companies doing less than $1 million worth of R&D a year, and there is some evidence that firms are actually limiting their R&D expenditure in order to keep getting it.
The second working group is looking at the design and direction of the Cooperative Research Centres Program.
This is one of the great legacies of the last Labor government, and it is of paramount importance to universities as well as to business.
It has been instrumental in forging strategic links between industry, the academy, government agencies and public research institutes since 1991.
I’m keen to restore the original focus of the program, which was on long-term capacity-building and public benefit rather than short-term commercialisation.
ANU has been prominent in the CRC program, with current or recent involvement in centres devoted to photonics, mineral exploration, dairy products, communication surfaces, automotive technology, forestry, cotton and more.
Dr Cutler and his colleagues have called for submissions, which must be made by the 30th of April. Everyone here has something to contribute, and I urge you to have a say.
Working on the relationship
There are many ways to innovate.
Incremental innovations in organisation and processes in can driven by skilled workers on the shop floor. Incremental innovations in products and services can be driven by customers.
But radical innovations are generally science-based – and by science I mean knowledge in all its forms, including the humanities and social sciences.
It’s hard to come up with something really new without expert input and a serious R&D effort.
And the more science-based innovation becomes, the more sense it makes for the business and research communities to work together.
More than that, we need to start seeing universities and industry – including the service industries so well represented here – as elements of a single innovation system.
Australia produces about 3 per cent of the world’s scientific papers with 0.3 per cent of the world’s population.
But the huge quantity of knowledge generated by our researchers is not having the impact it should outside the academy.
Of course there are exceptions, and ANU itself is a party to many successful collaborations, including:
- its partnership with Progen Pharmaceuticals to develop the breakthrough cancer treatment discovered by Professor Chris Parish at the John Curtin School of Medicine
- its work with Origin Energy and Wizard Power to develop the university’s innovations in solar energy
- and its training programs for IBM and others.
This is all good news, but we need to do more.
It’s no good universities going out and cold-calling industry with their latest bright idea. It’s no good industry cold-calling universities with their latest problem.
What we need is an ongoing relationship in which people feel comfortable with each other.
The best university-industry relationships are based on shared trust, share goals, and shared respect for each party’s expertise.
Establishing trust and defining goals doesn’t cost much. Communication is the key.
That’s why bridge-building exercises like this one are so important. They give us a chance to unlock new capabilities.
Industry can extend university capabilities by steering research in fresh directions.
Universities can extend industry capabilities by transferring knowledge, providing training, or simply being ready to help when the phone rings.
There is a great deal that can be shared without money changing hands or IP being put at risk.
The result will be new research, better-focused research, and research that makes a difference in the real world.
That’s what we all want.