In its recent report Securing Australia’s Future, the Australian Council of Learned Academies said a key priority for Australia was to build better links between business and industry and researchers. Among other things, this would require economic, social and cultural changes “driven by visionary leadership and targeted investments in skills, infrastructure and innovation”.

But however fine and sensible this may sound, there could be a problem.

What if there is no relevant industry with which researchers can engage?

What if Australia does not have the industries or policy settings to drive growth in research and development?

These and other critical questions are raised in a recent article by Tim Cahill, associate director of KPMG’s education sector and a member of its Policy, Programs and Evaluations group.

Writing in The AustralianCahill says universities will struggle to deliver greater industry collaboration if there is no relevant industry to engage with – a situation Australia now faces.

Recent Australian Bureau of Statistics figures on R&D expenditure by business revealed “a staggering” 12 per cent decrease in one year, dropping to levels below 2009-10 – a decline, he says, that can be explained by the downturn in the manufacturing and mining industries, which decreased R&D spending by 19 per cent and 34 per cent respectively in 2015-16.

But this highlights a deeper problem – “Australia simply does not have the kind of industries or policy settings to drive R&D growth”.

Australia’s private sector mainly comprises small to medium enterprises: 60.7 per cent of actively trading businesses in Australia had no employees; 39.1 per cent had fewer than 20; and only 0.2 per cent of businesses had 200 or more employees.

Department of Foreign Affairs and Trade figures show that the services sector represents about 70 per cent of gross domestic product and employs four out of five Australians.

He adds: “Australian research in finance, tourism, media, logistics, marketing and education is often world-leading but the problem is that R&D tax incentives currently exclude research in social science, humanities and arts as eligible activities.”

This, he writes, is a strong disincentive for those in the services sector to undertake R&D and translate the benefits that might flow from it.

Domestic businesses

Australia also has “among the lowest proportion of researchers working in business enterprise across the OECD, higher only than Chile, Portugal, Poland and Slovakia”.

Without research-trained employees, he says, it is very difficult for an industry to translate the value from research into a business setting.

“That leaves only a small pool of domestic businesses that universities can work with and the market is already pretty close to saturated.”

A new way of thinking may be required, he says, that involves focusing on the expertise of our academics “and not just the research they are undertaking”.

He asks: How can the unique domain knowledge that researchers possess across a discipline be transformative to a business?

“This might see researchers move away from their fixation on research publications and commercialisation revenue as the twin markers of success, and instead think about deep, long-term engagement and the tacit value of their knowledge.”

Freedom to apply knowledge to the betterment of communities is already legislated in the Higher Education Support Act, he observes, but needs to be underscored by funding and embedded in performance management regimens, beyond counting revenue and publications.

“We will need to look outside the current toolkit of market-driven reforms that have characterised our university and innovation thinking.”

Read the article in full here.