FUND managers believe universities are too focused on basic research and do not have a strong commercial outlook. For their part the universities say that a failure to back pure research stifles ‘chance’ commercially viable opportunities.
FUND managers believe universities are too focused on basic research and do not have a strong commercial outlook. For their part the universities say that a failure to back pure research stifles ‘chance’ commercially viable opportunities. At the same time, however, the unis say they are becoming more commercially aware and active.
The panel also discussed the gap at the pre-seed funding level – a gap from research completed at a university but still deemed too risky for venture capital investment.
Does this gap then force our WA bred ideas to look elsewhere? According to some, yes.
Ian Murchison – Foundation Capital managing director
“Universities carrying out research projects usually differentiate between humanitarian, in which case there is no necessary commercial outcome, or there is a commercial benefit. So we say lets buy in at the research approval level and say whether we would support this as a commercial project. The universities say that is going to cut across the professors’ prerogative, so you sit there and say: ‘What the hell are they doing justifying research projects for commercial reasons when they don’t have any buy in from the people who are going to commercialise it?’ Raw research, if it is commercially successful, returns 100 times the dollar that’s put into it.”
Andy Sierakowski – UWA Office of Industry and Innovation director
“A research-focused uni is not focused on commercialisation.”
“Then don’t let the researchers put a commercial outcome in their applications. Put up exactly what they are doing.”
Simon Carroll – WA Biomedical Research director
“There are life cycle differences. There are differences in funding needs. We have to understand the different roles of organisations and the different life cycles. If we can take a lot of R&D investment and fund the innovation, then what do you invest in? How do you transfer the knowledge of your research to the community?”
Matt Callahan – QPSX general manager
“There is a big gap between good science and something that is investment ready, and it is partly to do with the fact that the scientists are doing good science and concentrating on that and they do not have their eyes turned to the commercial aspects.
“At UWA there are some simple programs and they are working. There are two courses, Management of Technology and Innovations and Entrepreneurs. They pair-up four students and a project and they give a view, they write a business plan or an information memorandum.”
Bruce Hobbs – Office of Science and Innovation executive director
“It seems to me that the incentive system that has been imposed by the Federal Government that has been imposed on the universities that generates this climate (the non-commercial focus). Yet I pulled out some numbers about a year ago about the external means of each university in Australia and what proportion of that was in the research budget and I was amazed, absolutely amazed.
“At Monash University, 60 per cent of their total research budget is from outside of the university, and most of the other universities are around 50 per cent. Where does all that money come from? It comes from the ARC [Australian Research Council] essentially and that is a Federal agency. What are the criteria for getting a grant? The number of citations, the number of publications [where an academic’s work has been published], what do your peers say about you? It has nothing to do with what you want the research environment within the uni to be. And to some extent it is the same with CRCs.
“When it comes down to it, the selection committee is all about academic ability. So I think the Federal Government could put in place some incentives to make sure that commercialisation really does follow.”
Paul D’Sylva – Murdoch University division of R&D director
“We are feeling the push from government to commercialise our IP. There are incentives. We get funded for research through operating grant budgets from DEST [Department of Education, Science and Training] in part based on our success in protection and commercialising technologies. It’s marginal incentives.
“There are explicit examples, like the CRC program of having a focus on outputs and outcomes in terms of research, and having significant industry investment as a bottom line value.
“We have five CRCs and many of those have multinationals investing in them. The participation of those is very important to the decision-making process. If you try and get funding on technology based upon its market potential there is no reason why you should not have the VCs involved and the technology pushed.
“But there is basic research and when you stumble on something, like at the ANU recently they discovered how to make oil and water mix. That has major applications in the pharmaceutical industry.”
Marcus Christian – TechStart Australia venture manager
“I still think there is a gap between what comes out of a university and what a VC will fund. In terms of WA’s slice of the pie
it is not getting any better because the government has identified that gap and they are established the pre-seed funds, which are dollar-for-dollar schemes, and none of those funds is based in WA.
“Because of the nature of those funds it is a very hands-on process and none of them is going to be prepared to invest in WA projects. I know because I’ve put projects in front of them and I’ve been knocked back for exactly those reasons.
“There is a gap between taking something out of the university and getting it investor ready and that is getting it VC investor ready.”
Greg Riebe – Entrepreneurs in Residence CEO
“This is one of the few times where you have people representing various stages of the development of something through to commercialisation. We need to understand the various roles and how they think.
“We are the creation of the Federal Government and we wouldn’t exist if it weren’t for the Federal Government support and the IIF program.
“At the present time there are nine licences and I think there are four that have funding available and we are one of those and we are at the last stage so there is not a lot of capital out there. We see about 350 deals a year that would fit into this IIF program and we do about three or four, so 1 per cent are getting funded. This covers Northern Territory, South Australia, and WA.”
“I have no problems commercialising opportunities. But it’s from overseas. We have high-profile disciplines and research areas but there is nowhere to go in WA. I try and engage with the SMEs but they haven’t got time for it.”
“There are so many examples of companies that started out being research based and are now moving away from WA because of a lack of infrastructure support. Examples are that of SIRTeX and Tinnitech. It is a WA project and a listed company and it is about to be acquired by an international and again at the biotech conference very few people knew it was WA based research. Tinnitech is another that I am involved in and it is moving its corporate operations to Sydney because there is more infrastructure.”