Thursday, 22 May 2008

Science, Governments and Industrial Impact

The still new Rudd government in Australia has announced deep cuts in funding for the Commonwealth Scientific and Industrial Research Organisation (CSIRO), one of the few research bodies to receive consistent funding under the previous anti-intellectual Howard government.

The CSIRO and to a lesser extent universities are suffering from the misplaced desire by governments for research entities to function as commercial operations. If what they were doing had a clear and obvious low-risk commercial outcome, business would be doing it.

The purpose of government funded research is longer-range outcomes which may not have immediate economic impact but when they do turn into something economically viable are game-changing. At Stanford, rightly acknowledged as a world leader in not only blue sky research but in industrial outcomes, the university does not try to hoard IP. If a grad student or academic has a great commercialisable idea, they are encouraged to go out and start a business.

By trying to merge the concepts of blue sky research (needs the stability of a large organisation with deep pockets) and innovative start-ups (need the nimbleness of a small organisation without deep bureaucracy) you end up with neither.

As to the question of the Rudd government's commitment, look no further than the "means test" on solar panels. This is a government which is focused on what it takes to win the next election, not what makes sense for the environment, academia, or anything else long term – despite anything they say to the contrary.

But back to the CSIRO.

From what I know of the organisation, it does some really good work, but has an excessively bureaucratic culture, with an emphasis on booking everything against a project, whether it makes sense to do so or not. This emphasis arises from a desire to appear to be operating "commercially".

What should a government wanting to make best use of a resource like this do?

I would take away the imperative to commercialise, and institute benchmarks similar to those for research academics. I would base funding on outcomes against these benchmarks. Some of these benchmarks would include long-term impacts (e.g., the fraction of research that resulted in a commercial outcome; the fraction of research that was highly cited). But I would not require that the organisation itself do the commercialising. If the CSIRO publishes some breakthrough concept which results in a major new business being started, why should the government care who owns the business, as long as there's a return to society?

The same applies to universities. The University of Queensland proudly compared its income for patents and royalties with that of Stanford, at a talk I attended a few years ago. However, that's not how Stanford operates. The university seldom tries to claim ownership of IP. Academics and grad students have formed many successful start-ups (HP, Sun, SGI, FedEx, to name a few).

The big difference in the US which makes the Stanford approach work well for them is the generous tradition of alumnus donations. However, even without this, a switch to separating commercialisation from research would be beneficial. In the absense of donations, the government could add successful spin-outs as a factor in funding research.

By making this change, the CSIRO – and universities – could revert to doing what a large government funded organisation does best: providing job security for those developing ideas for the long term. Unfortunately, cutting funding without a structural change is likely to have the opposite effect: an increased emphasis on commercial outcomes.

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