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     Commercialisation frameworks

This page considers commercialisation frameworks and issues. It highlights public/private sector studies and statistics.

It covers -

• introduction
• commercialising public sector research
• government support for commercialisation
• entrepreneurial science?

There is a broader discussion of innovation and incentives in the Intellectual Property guide and the Information Economy guide.

     public sector

The 2002 National Survey of Research Commercialisation (PDF) under the auspices of the Australian Research Council, National Health & Medical Research Council and Commonwealth Scientific & Industrial Research Organisation suggests that Australia's performance in commercialising public sector research continues to be spotty.

It claims that Australia is likely to have generated 250 new start-ups from publicly funded research organisations in the five years to 2004.

Relative to expenditure on research and size of the national economy measures such as start-up company formation and income from licences were better than those for the US and Canada. Performance was weaker when measured by number of licences executed and US patents issued.

Australia's performance was below that of both the USA and Canada: relative to GDP Australia's share of US patents was low compared to Canada, Japan and several EU states. In 2000 for every one billion US$ in research expenditure around 128 US patents were issued to US institutions, 86 to Canadian institutions and a mere 34 Australian institutions. 143 licences were executed by US institutions, 183 in Canada and 115 in Australia.

16.2 start-ups were formed by Australian institutions per US$1 billion research, 37.5 in Canada and 13.8 in the US. US$31.6 million income from licences was received by institutions in Australia, US$44.9 million in the US and US$17.2 million in Canada.

The survey report argues that -

• ability to grant exclusive licenses is important to company start-up activity by publicly funded research organisations in Australia
• researcher involvement is an important element in the strategies employed by Australia 's publicly funded research organisations to manage their commercial licensing activities
• there is a positive relationship between an institution's experience in managing commercial licensing activities and its income from licences
• there is scope for improved practice in management of invention disclosures in Australian publicly funded research organisations.

Other perspectives are provided by documents on the Australian Institute for Commercialisation site, established under Queensland government auspices.

     government support for commercialisation

Australian federal and state/territory government support for commercialisation, particularly relating to digital technologies, is a confusing, volatile and often rather threadbare patchwork of incentives, advice and other initiatives.

At the national level three major programs have been the Commercialising Emerging Technologies (COMET) and R&D START initiatives within the industry portfolio and the Information Technology Online (ITOL) initiative within the communications & IT portfolio.

COMET is a competitive grants program - under the over-hyped Innovation Statement: Backing Australia's Ability - that is government funded but delivered by private sector 'Consultant Business Advisers'. It aims to support businesses and individuals in "commercialisation of innovative products, processes and services".

R&D START is administered by the Industry Research & Development Board (IRDB) and involved $114 million federal grants to 122 new projects in 2001-2. Its Core Start component offers grants of up to 50% of eligible project costs for Australian companies with an annual turnover of under $50 million. The Start Plus component offers grants of up to 20% of eligible project costs for larger Australian companies with group turnover of $50 million or more. Grants up to $15 million are available but typically range between $50,000 and $5 million. The Start Premium component offers "high-quality projects the opportunity to obtain further assistance". The program also offers concessional loans to enterprises that employ under 100 people and are involved in early commercialisation: projects must be completed within three years and the loan repaid in the following three years, with loans of up to 50% of eligible project costs.

The federal government Pre-Seed Fund (PSF) for universities and public sector research agencies aims to "address the gap between promising scientific discoveries and commercialisation", financing the development of management and entrepreneurial skills and building "links with the finance and business community".

At a broader level the R&D; Tax Concession scheme offers a "market driven tax concession" that permits companies to deduct up to 125% of qualifying expenditure incurred on R&D; activities when lodging their corporate tax return. A 175% Premium (Incremental) Tax Concession and R&D; Tax Offset are also available in certain circumstances.

Sam Garrett-Jones has argued that Australia is seeing the "the strong rebirth of regionalism" through state government support for science, technology and knowledge-based industries. Their regional innovation policies have supposedly evolved over the past 15 years from support for grand 'technology citadels' to strategies with

a more bottom-up approach to building intense innovation environments, local clusters and knowledge hubs. Some of these trends reflect the influence of the global knowledge economy on regional industries, while others (notably the relative decline of the federal government as an R&D performer) are peculiarities of the Australian innovation system.

In July 2005 the federal Government's high-technology Innovation Investment Fund, launched in 1997, announced that it 'lost' over $40 million on total investment of $175 million, with failure or writeoff of one in six of its investments. The IIF involved provision of money to private venture-capital companies for start-ups, primarily in the ICT, pharmaceutical and medical technology sectors (including employment agency Seek and search service Looksmart).

     entrepreneurial science?

As we noted in discussing innovation policy as part of the Intellectual Property Guide and Information Economy Guide elsewhere on this site, there's now a significant body of literature about regional innovation cultures (eg the Boston and N Carolina Triangle on the US East Coat, Bangalore in India and Silicon Valley in the US West Coast).

Some of the more provocative works are MIT & the Rise of Entrepreneurial Science (London: Routledge 2002) by Henry Etzkowitz, Industrializing Knowledge: University-Industry Linkages in Japan & the United States (Cambridge: MIT Press 1999) edited by Lewis Branscomb, Fumio Kodama & Richard Florida, Universities & the Global Knowledge Economy: A Triple Helix of University-Industry-Government Relations (London: Cassell 1997) edited by Etzkowitz & Loet Leydesdorff, Capitalizing Knowledge: New Intersections of Industry & Academia (New York: State Uni of New York Press 1999) edited by Etzkowitz, Andrew Webster & Peter Healey and Academic Capitalism: Politics, Policies & the Entrepreneurial University (Baltimore: Johns Hopkins Uni Press 1998) by Sheila Slaughter & Larry Leslie.

Innovation, Technology Policy & Regional Development: Evidence from China and Australia (Cheltenham: Elgar 2003) edited by Tim Turpin, Xielin Liu & Sam Garrett Jones offers comparative studies. For the UK see in particular David Gill, Tim Minshall, Craig Pickering & Martin Rigby's 2007 Technology Funding (PDF).

   next page (studies)