Successful and rapid commercialisation of local intellectual property (IP) is a major challenge facing Australia in the 21st century. Our economic, environmental and social well-being is to a large extent dependent on how we as a nation manage to create and capture value from our significant investment in IP.
The Rudd Government’s document, Powering Ideas: An Innovation Agenda for the 21st Century, setting out innovation pathways over the next 10 years is a case in point. Similarly, Industry Minister Kim Senator Carr has established Commercialisation Australia as the vehicle for supporting the commercialisation of Australian ideas and research and addressing systematic and market failures in the pathway to commercialisation. The new agency will provide multi-levelled assistance to leading researchers, entrepreneurs and innovative firms to take their ideas to market.
The problem with the radical new approach to commercialisation of Australian IP, however, is that it focuses on individual firms and projects. Worse still, it depends mostly on limited government funding and is not linked to strategic procurement.
Governments should be looking to build industry clusters, creating the equivalent of the Barossa Valley for Australia’s manufacturers, their suppliers and funding sources. Governments should tap into private equity and super funds and steer them towards manufacturing. Governments also play a critical role in strategic procurement and helping manufacturers go global through Austrade.
Research by Professor Michael Gilding from Swinburne University sheds new light on the importance and characteristics of successful clusters in the Australian and global biotech industry. A key premise of emerging innovation research is that successful innovation requires stakeholder engagement across the entire innovation cycle from idea to impact. Using Social Network Analysis as a tool for understanding collaboration, commercialisation and innovation, Gilding has demonstrated that it makes sense for government to support high priority and sustainable clusters as vehicles for rapid commercialisation of IP on a global scale. Australia’s Trade Minister Simon Crean, who has just launched Autolink Australia, a consortium of the best interior technology and automotive supply capability in Australia, to help support trade clusters.
“By working together within an industry cluster, individual enterprises can present a much stronger value proposition in a highly competitive international marketplace than they may be able to achieve individually” Crean said in Melbourne recently.
But having an entire innovation system heavily dependent on government co-investment is risky. One could argue that it is unsustainable especially when that funding is very limited. To address this critical issue, the bulk of the funding should come from private industry, super funds, venture capital and other sources. Innovative policies need to be put in place to attract private investment into commercialisation of Australia IP especially when cash injections of $2 to $10 million are required to cross the “valley of death” that destroys our best IP or sends it off shore. The private equity can be local or international, so long as the bulk of the benefits and the positive impact stay in Australia.
Japan and Korea have shown the world that strategic procurement by government and industry can also play a very important role in facilitating the commercialisation of Australian IP.
The best way to create sustainable industry clusters is to have entrepreneurial firms with signed purchase orders from customers. A great idea can quickly become commercially successful if the entrepreneurial firm can demonstrate to the market that is has a sustainable future based on meeting the needs of customers and their customer’s customers. The success can be scaled up if an industry cluster can successfully integrate into global supply chains and win orders.
There is no better way to capture value from Australian IP than exporting the solutions to global customers. Organisations like Austrade, have played and will continue to play an important role in promoting and capturing value from Australian innovations especially in knowledge based industries like advanced manufacturing. Austrade needs to play a role building clusters within and across industries.
The public policy environment in Australia is conducive to innovation of strategies, business practices and performance in support of rapid and successful commercialisation of Australian IP. Cooperative Research Centres like the Advanced Manufacturing CRC can play an important role in facilitating partnering for Australian competitiveness and commercialisation of IP. Let us work together for a preferred future.
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