News & Views item - November 2006

 

 

Productivity Commission Issues Draft Research Report on "Public Support for Science and Innovation. (November 2, 2006)

    The Australian Government Productivity Commission's draft report on Public Support for Science and Innovation was released today. The initial findings of the commissioned study are given in the 700 page report, available online as well as in hard copy, and submissions regarding the report are requested from interested members of the public by Thursday, 21 December 2006. The Commission intends to present its final report to the Government in early March 2007.

 

Laudatory comments have already been released by the Group of Eight, Federation of Scientific and Technological Societies (FASTS) and the Australian Vice-Chancellors' Committee.

 

AVCC President Professor Gerard Sutton said, "Importantly, the report recognises that research not only provides positive economic benefits, but also substantial social and environmental dividends. It stands to reason, therefore, that the nation would get an even better return if it was prepared to invest more on research. For example, we believe there is a clear case for an increase in the block grants to universities to support research infrastructure." And the AVCC was appreciative of the commission's recognition of the difficulties associated with current “proof-of-concept” commercial arrangements for research within universities, and the need to provide universities with additional funding to help them demonstrate promising technologies so that they could more easily be commercialised.

 

The Chairman of the Group of Eight, Melbourne University Vice-Chancellor Glyn Davis, said the report, "...provides an insightful analysis of the current contribution of university research to the economic, social and environmental wealth of the nation." He noted that the commission has recognized the importance of basic research in the innovation cycle and added, "Importantly the report identifies problems with the current structure of university research funding and notes the risks to ‘meaningful strategic choices at the institutional level’."

Professor Davis then brought up the place of the Federal Government's proposed Research Quality Framework. "We agree with the Productivity Commission’s findings that the proposed Research Quality Framework has some benefits. We do need to review the current measures of research excellence. However it is very important that any new research assessment model is robust and tested to ensure it is accurate and cost-effective before implementation. It will be difficult to achieve this in the proposed 2008 implementation time-frame. The suggestion in the report that the RQF be delayed while other options are explored has our strong endorsement."

 

The President of FASTS, Professor Tom Spurling said, "The report does us all the considerable service of stating the obvious; that a major benefit of public support for science and innovation is ensuring national preparedness for emerging economic, social and environmental challenges such as climate change, drought or low carbon energy.," and emphasised the commission's "key message that the current pressure on universities and public research agencies like CSIRO to pursue a narrow view of commercialisation understates the crucial social benefits that science provides through identifying, understanding and minimising risks.”

Professor Spurling also pointed out, the commission’s "finding that the Co-operative Research Centres (CRC) program should be improved by reinstating the original policy objectives of translating research into broad social, environmental and economic benefits rather than a focusing of public support on industrial research alone," and he concluded, "The Commission is right to question the value of public sector research doing the job of industry R&D especially if there aren’t the business receptors for such research. Rethinking how best to encourage industry R&D though improvements to the tax concession and more agile CRC-type arrangements are important and sensible suggestions."

 

Not surprisingly all commentators point out that the 700 pages will require additional careful assessment before they will make definitive comment.

 

The Minister for Education, Science and Training as well as the Chief Scientist are yet to comment publicly.

 

 

 The key initial findings as set out by the commission are:

 

 
Productivity Commission - Home Page

Key Points

Issued with the draft research report, Public Support for Science and Innovation on 2 November 2006. See also: media release, Science and Innovation Pay Dividends for Australia.

" Australia is well served by its public funding support - some $6 billion in 2002 03 - for science and innovation.
  • It is not possible, given a host of measurement and methodological issues, to provide accurate estimates of the contributions of such R&D to the economy, but indications are that they are significant.
  • There are also important social and environmental dividends for Australians.

There are no grounds for a radical overhaul in total public funding or in the allocation of that funding. However, incremental improvement is needed in some areas.

The adequacy of existing evaluation arrangements is mixed, with some notable shortcomings in business programs.

The net payoff from the R&D Tax Concession could be improved by orienting the program towards its 175 per cent incremental component. This offers the prospect of increasing the amount of new R&D encouraged per dollar of revenue allocated to the program. The design of the incremental component could also be improved to make it more attractive and efficient.

Strong public support of Rural R&D Corporations with a public good orientation is justified, but the level of government subsidies for some more narrow industry-focused arrangements may crowd out private activity and produce only weak external benefits outside the supported rural industry. However, no changes should be made while persistent drought conditions remain.

Although, collaboration can generate significant benefits, the CRC program is only suited to longer-term arrangements. The Commission has outlined some complementary options for business collaboration with public sector research agencies and universities that could provide more nimble, less management-intensive, arrangements than the present CRC program.

There is a wide range of perceived obstacles to commercialisation by universities, but only some of these warrant policy action.

  • There may be a case for providing universities with some additional funding to demonstrate promising technologies so they can be more easily transferred to businesses. However, there are several options for supporting such transfer that do not involve a new dedicated funding stream.

The structure of funding for higher education research has increasingly eroded the share of block grants. Further erosion would risk undermining their important role in enabling meaningful strategic choices at the institutional level.

" While the proposed Research Quality Framework has some benefits, it also has considerable costs. The Commission suggests that a final decision about its implementation should be delayed pending the exploration of some other options.


Background Information: Ralph Lattimore, Assistant Commissioner, (02) 6240 3242