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If innovation is the business of the future, universities are at the centre of that business, Professor Alan Robson, Vice-Chancellor of The University of Western Australia, said today.

"Innovation is the driver of any modern economy and it is the key to international competitiveness, employment growth and social well being," he told the Melbourne Institute of Applied Economic and Social Research Conference today.

"The cycle of innovation must be continually fed by new ideas and basic knowledge, and the outcomes need to be transferable and accepted by end-users. This is the challenge universities have to accept and on which we must deliver if we are to serve the national interest and justify the investment the community makes in us," he said.

He said the role of universities in innovation was twofold: the production of well educated graduates; and, the conduct of research and development (20 per cent of all Australian R&D is conducted within universities).

"Australia's future success at home and internationally will depend substantially on our capacity to be players in the main game of the advancement of knowledge and innovation," he said.

"Much has been made recently of the fact that Australia was ranked last out of twenty-six OECD countries for research collaboration between industry and universities, and second last for research collaboration between industry and public research organisations.

"A particular difficulty in business - research provider interaction is that business seeks solutions to problems or opportunities that are frequently multidisciplinary; whereas research providers (both universities and the CSIRO) tend to be organised along disciplinary lines. Matrix approaches are required such as the CSIRO Flagships program or the Minerals and Energy Initiative at my own University.

"While there has been a significant contribution to Australian innovation through Cooperative Research Centres, we need two quite distinct types of CRC - those directed to public good and those that will deliver commercial benefits to associated industry partners."

He said an indicator of the importance of the university sector to the national innovation system could be gained from the figures for higher education R&D as a percentage of GDP. Australia ranked 8th (behind Sweden, Canada, Switzerland, Finland, Australia, Denmark and The Netherlands), and further, Australia ranks 12th when it came to the percentage of gross expenditure on research and development performed by the higher education sector.

"This is both a good and a bad figure as it means while our universities are important to innovation, it does not say similar positive things about the contribution of other sectors in Australia as countries such as the US, Japan and Korea rank in the mid- to high-20's indicating much greater overall spending on R&D across sectors other than higher education."

The majority of university-based research in our country is carried out by the research-intensive or Group of Eight universities which account for: more than 65 per cent of total research spending; 70 per cent of all invention disclosures; 75 per cent of patent applications filed; almost 80 per cent of licence incomes; and more than 65 per cent of start-up companies formed. High quality university research derived from proper funding leads to quality scientific discovery which can lead in turn to successful economic outcomes.

"It is important to understand that a university's primary goal is not research commercialisation - nor should it be. A university is founded on delivering more fundamental benefits for our society," he said.

"On the one hand, there is the benefit which comes from funding quality work. This is vitally important as resources are scarce, and it would not be sensible to dilute the effects of spending by spreading such funding widely and away from areas of quality and excellence.

"Increases in Government funding for research requires demonstration that the research being conducted is both world-class in its scientific quality and has an economic, social or environmental benefit for the Australian community.

"We must also understand that ‘full funding' means that not only are the direct costs of the research met, but there is also adequate funding to meet the infrastructure costs (currently in Australia less than 20 cents in the dollar; in the US, more than 50 cents in the dollar).

"We need to acknowledge the importance of ensuring that public-good research is adequately communicated to end-users. Fundamental research is the foundation which makes possible much of the innovation and application and the whole range of beneficial impacts that flow from public investment in research back to the community.

"Private business is unlikely to be a major funder of fundamental or long term research projects. This is simply recognition of the necessary imperatives of business life:  for business to invest in research, there must some connection to short and medium returns and a focus on the problems and challenges facing the firm."

Media references

Professor Alan Robson  61 8  6488 2809
Janine MacDonald (UWA Public Affairs)  61 8  6488 5563  /  0432 637 716