People advocating greater government involvement in directing university research programs should be careful what they wish for, according to CSIRO chief executive officer Larry Marshall, who warns this may be a sure-fire way to stifle creativity.
Dr Marshall, who has presided over a drive to improve the commercial returns to the national science agency of its IP and development capability, says university research should be left to focus on the frontier research.
Direct research toward commercial outcomes or to pressure the universities to produce startups as commercial spin-offs was fraught.
“There is a danger in squeezing the universities too tight on this issue. The beauty of scientists is that they are a lot like artists in the way they create,” Dr Marshall said. “It can be a bit random, and if you try to proscribe [activity] or direct them or steer them, you will probably get a lot less than you expected.”
“You won’t get the benefit, and the risk is that you might lose a lot of the genius and the creativity,” he said.
Dr Marshall told an estimates hearing earlier this month that Australia was ignoring science-based innovation to its detriment, and had not properly exploited the value being created by researchers.
The venture community has been too obsessed with the internet and the next big app-based startup.
The launch of Main Sequence Ventures – the CSIRO-backed venture fund – was starting to have a positive impact, drawing the interest of the capital community, including from overseas, to put more resources into exploring university-based science and tech in sectors that have not yet been dominated by the big VC outfits of Silicon Valley and elsewhere.
“If you look at the startup sector – and it’s the same in Silicon Valley – we’re all obsessed with the internet. Even Australian venture capital, which historically has been fairly risk averse, has been chasing after those deals because they are seen as [having the] massive returns,” he said.
“But my concern is that there’s $10 billion of public money going into publicly-funded science, and we are tenth in the world for science, so what are we missing out on in terms of investment opportunity by focusing on the internet when globally it is a red ocean of competition?”
“You’ve got some of the best entrepreneurs in the world making money in that space. What do we bring to that party that’s different?”
He says in areas of strength like agricultural technology and health and medical – “and even space technologies for that matter” – Australia has science excellence where fewer people are active globally.
Australia had some very quirky deep-tech and science-type innovations, but because our nascent VC community had its attention focused elsewhere, we are missing out.
“That’s the missing piece here. That’s why we started Main Sequence Ventures with a mission to go and find these things and start to get some capital behind them,” he said. “And not to fund them all the way to market, because one fund can’t do that alone, but at least to get them mature enough that the other investors would start to pay attention to them.”
Dr Marshall said the CSIRO’s focused effort to extract greater value from its IP portfolio and to build viable commercial partnerships both here and internationally was having a positive impact on its own research funding.
In announcing this week that CSIRO would invest $35 million into frontier research in Space Technology and Artificial Intelligence as part of its Future Science Platforms, he said the commercial effort was starting to demonstrate research returns – rather than the other way around.
He said there had been a 40 per cent increase in IP revenue and a 20 per cent increase in industry and global returns since he started as CSIRO chief executive.
In 2014, the pure science investment from was in the “single digit millions”, which has now grown to about $50 million and will be $200 million by 2020.
“So that gives you a sense of the quantum reset in IP revenue and global revenue that’s funding it.”
“We have increased our working relationship with the global Fortune 500 and that has started to make a fairly significant contribution to CSIRO research,” Dr Marshall said.
In the past several years CSIRO has “really tried to maximise the portfolio value of our IP” and taken on more risk with customers to try to make bigger research breakthroughs, sharing the risk and ideally sharing the upside.
The messaging back to those customers is similar to the conversations with CSIRO researchers: “To tell them that whatever money we make is going to be an investment back into the science that [they] need in their industry.”