Australia tells universities to focus on commercialising research

Government encourages shift away from reliance on international student revenue, but expert questions whether this is possible

February 26, 2021
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Australia’s universities have come under pressure to reorient their business models around commercial returns from research rather than revenue from international students.

A federal government discussion paper, which seeks ideas on a new scheme to improve the commercialisation of university research, flags “substantial” funding to encourage translational research and develop ideas into “proof of concept” products ripe for industry investment.

The paper says universities may be pressed to put “skin in the game” by identifying research with the best commercial prospects, developing the most efficient “pathways” to monetise them and skewing career reward systems to commercial success instead of publication.

“While universities increasingly invest in research that has social and economic impact, they have weak incentives to commercialise research which has commercial potential,” the paper says. “Revenue from international students is influenced by global rankings, which in turn are linked with publication output.

“An innovation culture has not been fostered within Australian universities, with performance management and rewards focused on quality of academic output and citations.”

In a speech at the University of Melbourne, education minister Alan Tudge said he wanted academics to become “entrepreneurs taking their ideas from the lab to the market” and was prepared to change intellectual property laws to that end.

“Now is the time to make this change, not just because our economy and security needs it, but because university business models have been severely disrupted by Covid. I am willing to work with any university that wants to get ahead of the game,” he said.

The speech concluded with a reference to Cochlear Australia, which – along with the Gardasil cervical cancer vaccine and sleep disorder device manufacturer ResMed – is one of the few renowned Australian money-spinners to have emerged from university research.

Mr Tudge’s speech did not address a central concern for university administrators: how to maintain enough research to generate a steady supply of innovations for commercialisation. While the government allocated an extra A$1 billion (£560 million) of research funding in last year’s budget, it will not compensate for an estimated A$3 billion loss of revenue last year alone resulting from the pandemic.

Australian National University policy expert Andrew Norton said that while commercialisation of research was desirable, it was never likely to be a major source of revenue for either universities or the broad economy. While university accounts were “opaque” about commercialisation, revenue from royalties and licences had totalled just A$136 million in 2019, he said.

Consultancy and contracts revenue of A$1.5 billion was “also a sign of engagement with the outside world”, but had supplied just 4 per cent of universities’ income.

Professor Norton said innovation was largely about new ways of doing things and “incremental improvements” on older technology as well as new inventions. “No matter how good Australian universities are, they will only produce a tiny percentage of global new-to-the world technologies,” he said.

“Australia’s prosperity depends much more on access to innovations across the world. In this, the graduates of Australian universities are likely to play a much larger role than researchers in the labs.”

Melbourne vice-chancellor Duncan Maskell welcomed the focus on research translation, saying the onus on universities “to deliver important benefits to real people” had been highlighted by the pandemic and challenges such as extreme weather. He also stressed the need for “investment in research, both basic and applied, in all the disciplines”.

The Group of Eight said the government had “issued a challenge and an economic direction” for business, government and universities. “For our part, the Go8 is committed to it,” said chief executive Vicki Thomson.

john.ross@timeshighereducation.com

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Reader's comments (4)

"expert Andrew Norton said that while commercialisation of research was desirable, it was never likely to be a major source of revenue for either universities or the broad economy. While university accounts were “opaque” about commercialisation, revenue from royalties and licences had totalled just A$136 million in 2019, he said." I wonder if that poor income is because of theft of intellectual property, and commercialisation by others.
The whole point of university research is to do what the private sector cannot - to do the fundamental research required for future challenges. The LNP cannot get its head around the fact that what piece of fundamental research ends up being vitally important for tomorrow's tech simply cannot be predicted. The government's choice is either to outsource fundamental research to other countries and let Australia become a scientific backwater or accept the reality that fundamental research is a public good worthy of tax payer dollars. Do Australian's want to live in a sophisticated, knowledge based society or just make do with mining? I think it's becoming very clear what the LNP would prefer.
I like this quote as an example of pure sophistry: “An innovation culture has not been fostered within Australian universities, with performance management and rewards focused on quality of academic output and citations.” Well, I wonder why that is? Could it possibly have something to do with federal governments of both political persuasions encouraging universities to go down that path? And what does Alan Tudge, or Andrew Norton for that matter, know about those factors which actually encourage innovation and an inventive culture? I would hazard a guess, sweet FA. But likewise, just encouraging the production of fundamental research doesn't cut it, either. Creating and nurturing a culture that's free to explore problems from transdisciplinary perspectives, without interference from self-interested corporations or governments trying to pick winners is what's historically produced innovation, but don't expect to hear any more about that from any of the usual suspects.
How about the Federal Government commit to procuring 50% of its research consulting budget from Universities instead of KPMG, BCG, EY, Delloitte or PWC? There's a start?

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