Submission By The CRCA To The Productivity Commission Study On Public Support For Science & Innovation

Executive Summary

The key issues of interest to the Productivity Commission in its study into Public Support for Science and Innovation, as noted in the Issues Paper released in April 2006, are:

• the economic, social and environmental impacts of public support for innovation;

• impediments to the effective functioning of Australia’s innovation system; and

• evaluation of decision making principles and program design for public support for science and innovation.

• provides an overview of the CRC Programme;

• sets out the role of the CRC Programme within the broader innovation system;

• details the evolution of the CRC Programme since its inception in the 1990;

• outlines the types of benefits delivered by the CRC Programme;

•  presents the measured economic impact of the CRC Programme to date;

•  discusses the future evaluation of the CRC Programme; and

•  puts forwards a number of issues for future CRC Programme performance and suggestions for how these issues should be addressed to optimise future Programme performance.

The CRC Programme has played a pioneering role in bringing together public and private sector researchers and research end users to focus on solving real challenges of importance to Australia. The breadth of the CRC Programme across its six focus areas, the wide range of channels through which the Programme delivers benefits for Australia and the Programme’s unique role in encouraging long-term focused collaboration between research providers and research users together explain the high profile that the CRC Programme has had compared to the relatively small proportion it represents of total Australian Government science and innovation funding.

Due to the changes to the CRC Programme over its nine funding rounds, and in particular the changes made in the two most recent funding rounds, the CRC Programme has steadily evolved in terms of both how successful applicants are selected and how CRC outcomes are evaluated. Changes have been made with a view to steadily enhancing end user engagement within CRCs, ensuring that there are clear pathways for the adoption of the CRCs’ research, and to adding increasing rigour and transparency to evaluating the performance of the CRCs within the Programme.

The CRC Programme delivers benefits to Australia through a number of mechanisms including the direct commercialisation of research, the application of research outcomes by industry or public sector end users, enhanced access to international knowledge networks, skills formation and the generation of “industry ready” post-graduates, and through establishing long-term collaborations between public and private sector researchers.

The 2005 CRC Impact Study commissioned by the Association demonstrated that the CRC Programme is meeting “third stream” objectives and the prima facie case for its continuation is clear. The Programme has made a strong positive net contribution to Australian’s economic welfare. The CRC Programme’s performance also appears to be improving over time with the majority of benefits from past investment still to be delivered.

Given Australia’s relatively high levels of public funding for research compared to its levels of business investment in research, the central role of the CRC Programme in encouraging public-private research collaboration and in enabling research end users to access and apply the excellent research generated by our strong public research base remains as important as ever.

Notwithstanding its strong track record in delivering outcomes, a number of issues now confronting the CRC Programme need to be successfully addressed in order to ensure strong performance into the future. These issues include the:

•     level of future CRC Programme funding and funding certainty;

•  forthcoming Research Quality Framework and its potential impact on the Programme;

•  taxation environment for CRCs and for research commercialisation in general; and

•  the importance of proper integration of the CRC Programme with other Federal and State R&D funding programmes.

To address these issues, the CRC Association puts forward the following five recommendations for the consideration of the Productivity Commission study team.

Recommendation One

The CRC Programme should be funded at the level required for each bi-annual funding round to award at least fifteen to twenty grants per round with each grant carrying an average value of at least $40 million in current dollar terms. This would provide a strong incentive for Universities, CSIRO and industry to continue to engage in the CRC Programme and would, by directing additional resources into highly outcomes focused research, help deliver a better return for Australia on such resources.

The early announcement of the 2006 and 2008 funding rounds for the Programme has engendered confidence and encouraged investment by industry and research parties. Such medium term planning and announcement of funding rounds should be continued.

Recommendation Three

To ensure that the RQF encourages research of highest benefit to Australia, the CRC Association recommends that within the RQF the end impact of research is given a weighting of 50 per cent within overall RQF funding outcomes and that the impact of research is reported separately from the academic quality of research within the RQF.

Recommendation Four

The potential for improved alignment between Government innovation policy objectives and Australian Taxation Office interpretation of legislation relating to the taxation treatment of business R&D expenditure should be investigated.

Recommendation Five

The potential for better integration of the CRC Programme with other Federal and State R&D funding programs should be investigated.

Overview of the CRC Programme

The CRC Programme was established in 1990 to improve the effectiveness of Australia's research and development effort through bringing together researchers in the public and private sectors with the end users of research. The overall objective of the Programme is to enhance Australia's industrial, commercial and economic growth through the development of sustained, user-driven, cooperative public-private research centres that achieve high levels of outcomes in adoption and commercialisation.

The CRC Programme links researchers with industry and government to focus R&D efforts on progress towards research application. The close interaction between researchers and the users of research is the defining characteristic of the Programme. Moreover, it allows end users of research to help plan the direction of the research as well as to monitor its progress. This facilitates a more rapid uptake and use of the research – it avoids the situation of “technology looking for a market”.

This provider/end user collaboration is borne out in the strong and steadily rising levels of industry researcher involvement within CRCs. Industry researchers within CRCs now represent over 20 percent of all researchers involved in CRCs. This reflects a doubling in the representation of industry researchers over the past decade. Strong industry contribution to CRC education programs, with a view to producing “industry-ready” graduates, is another manifestation of the focus on provider/end user collaboration within the CRC Programme.

Since the commencement of the Programme, there have been nine CRC selection rounds, resulting in the establishment of 158 CRCs over the life of the Programme. There are currently 54 CRCs in full operation across the six industry sectors in which CRCs operate (Manufacturing, ICT, Mining & Energy, Agriculture & Rural Based Manufacturing, Environment, Medical Science & Technology).