Cooperative Research Centers Association

CRC Association responds to the Industry Innovation and Competitiveness Agenda

The Australian Government announced a package of measures yesterday in Canberra aimed at increasing the competitiveness of industry and bringing science and industry closer together.

One of the measures announced - five Industry Growth Centres - has sparked speculation about the future of Cooperative Research Centres.  A Review of the CRC Program has recently commenced, further fueling speculation that CRC Program will fold into the new Growth Centres. Minister Macfarlane said at yesterday's media conference 'Having CRCs as an adjunct to this simply won't work. Some CRCs will continue and complete their contracts, some will be folded into this process, and some will terminate.' The Minister indicated he would await the report of reviewer, David Miles.

Overnight, the CRC Association has been inundated with emails and calls of concern. 

The CRC Secretariat has just released the following statement of clarification. Commentary from the CRC Association follows the government statement.

On 14 October 2014, the Prime Minister and Minister for Industry made a joint statement to release the Industry Innovation and Competitiveness Agenda. This Agenda is a central part of the Government’s Economic Action Strategy to build a strong, prosperous economy for a safe, secure Australia. A major part of the announcement related to the establishment of Industry Growth Centres.

In responding to a question requesting clarification on the differences between the Industry Growth Centres and CRCs, the Minister stated that ”… we want to bring industry research development and the whole policy area into focus and having CRCs as an adjunct to this just simply won’t work. We’ll be looking at how we bring them into this process. Some CRCs will continue and complete their contracts, some will be folded into this process and some will terminate, but I will wait to see David Miles’ recommendations in relation to that.”

As you will all be aware, a review of the CRC Programme was announced by the Minister for Industry in September 2014.  This process will include an opportunity for CRC stakeholders and interested parties to attend public consultations in various cities. It will also include an opportunity to make a submission and a discussion paper will be released shortly. Decisions on the future of CRCs won’t occur until after the review process is complete in early 2015.

The department will keep you informed as further information becomes available.
The Association responds below:
"Firstly, it is important to point out that yesterday's announcement is over a hundred pages with a whole series of proposals and a reasoned case for reform," says Tony Peacock, CEO of the CRC Association.

"Overall, the package is a good one that deserves support. There is a heck of a lot to praise in the package and get on with as quickly as possible. For example, Australia's start-up sector has been held back by the tax on share options and we congratulate the government on fixing that issue - it will make a genuine and immediate difference".

"CRCs specialise in getting research translated into outcomes. We know that the regulatory system is a major barrier in many areas. When you have a small domestic market and a Federated system, the danger is that the cost and complexity of regulation can strangle innovation. That's happening now and has to change. The CRC Association has worked with Josh Frydenberg's office on a number of specific issues already with success and we see a lot more potential for improvements".

"We also welcome any improvements in STEM education and movement towards getting science and industry working more closely together".

"Industry Growth Centres as structured in this policy will be very different to Cooperative Research Centres, even though they have shared objectives," says Dr Peacock.

"The requirement for Industry Growth Centres to be self-funding in four years is a major acid test that will drive a lot of their behaviour".

"One of the models for the Industry Growth Centres, the UK Catapult Centre Program is itself currently under review. In their case, the requirement is for 1/3 of revenues to come from the business sector in five years. The feedback is that this requirement is generally thought to drive business focus for the centres. But it has a few of emerging issues as well that need to be taken into account. (1) It tends to push the centres to prefer to work with large companies, not small ones because the cost of engagement is less; (2) it pushes the Centres towards more contracting-style research than collaborative or cooperative research, which can mean the top researchers are less interested in the work; and (3) feedback in the UK Review is signalling concern that emerging industries can be left out".

The UK requirement is for one third of funding to be from business in five years, whereas the Australian proposal is for 100% in four. 
Click to enlarge.
"There is relevant Australian experience to learn from" says Tony Peacock. "In the 1980's Bob Hawke made CSIRO source one third of its income in outside contracts. The policy certainly shook up the culture but it also had a lot of unintended consequences as well and it was eventually dropped".

"A more recent example is the National Collaborative Research Infrastructure Scheme (NCRIS)".

"The current government is faced with the problem that many of the NCRIS centres are falling off a funding cliff. If we are honest, some of that problem is because overly ambitious business plans that envisaged a hand over from government to business funding were accepted".

"If the government wants Industry Growth Centres to be self-funding in four years, they'll have to impose a lot of discipline in selection and management of the Centres and be willing to let them live or die on that promise. To make them successful, the government will more likely have to contract out some of the business-science connection services to the Growth Centres".

"The CRC Program increases Australia's GDP. It is probably the most intensely studied innovation program on earth. The CRC Association instigated the first deep impact study ourselves in 2003. No one is more interested or committed to maximising research impact than CRCs. So we welcome the opportunity given to us in the Miles Review".

"I encourage all participants in CRCs to make their views known to the Review".

Click here for the Government's announcement on the PM program on the ABC.

Tony Peacock is the 2014 Monash University Churchill Fellow, studying industry-university innovation systems. 
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Cooperative Research News is published fortnightly by the Cooperative Research Centres Association and distributed free of charge. The CRC Association welcomes contributions but does not guarantee the accuracy, reliability, currency or completeness of any material published, or in any linked site. The material in this Newsletter may include the views or recommendations of third parties, which do not necessarily reflect the views of the CRC Association, or indicate its commitment to a particular course of action. Editorial responsibility is accepted by Professor Tony Peacock, Chief Executive, Cooperative Research Centres Association. Inquiries about publication should be directed here.


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