Head of Australia’s Information and Communications Technology Centre of Excellence, NICTA: Telstra Not Investing Enough in R&D. (September 23, 2008)

Dr David Skellern, is CEO of Australia's national information and communication technology research centre of excellence (NICTA). He has just had an extension of his contract for a further two years, until March 2011. It's also worth noting that the organisation has the distinction of being one of the few federal government entities not to have its funding docked by the razor gang in this year's federal budget.

In an extended interview with Business Spectator's Tony Boyd Dr Skellern was critical of Telstra's lack of contribution to Australia's research and development in information and communications technology.

Here is part of what he had to say:

If you take Telstra... 15 years ago it had a fairly sizeable R&D lab of over 600 people doing really driving innovation and technology in the telco sector. Now with the whole deregulated sort of system in Australia, it’s reasonable that the focus of the R&D could have shifted, should have shifted. But rather than just shifting, what’s happened is it’s been completely closed down.

I’m not aware of any significant development or strategy from Telstra to be able to compete on the basis of innovation, certainly not in service innovation. In fundamental... really basic innovation that’s going to introduce new types of services, new developments and really take the bull by the horns and be a leader. It seems to me that their whole strategy is to buy smart and if you buy smart from other people, you’ll always be lagging the leaders that end up doing their own thing.

We’ve... seen a progressive pulling back from innovation by Telstra over a long period of time. You know they pulled out of standards representation. There was a strong push and a strong involvement by Telstra in standards across the world ensuring that requirements for Australia were heard. That’s backed off.

The kind of support that they gave to encourage people in universities and students to get involved in research activities, in studying telecommunications has dropped off and so there’s a general decline and an apparent lack of interest in innovation and education at the leading edge from Australia’s leading company in the sector and that has a pretty depressing impact I think. If you look at many other countries [they] rely on the largest companies in the country to provide a pull through of what happens at the bottom end of the  "food chain". Innovation happens in small companies and the opportunities to get that taken up and to really go out to the market occur because you get a pull through from a larger company that’s got market power.

And the other thing we’ve seen from Telstra... there’s no aggressive strategy... that I’m aware of to go out and look at offering export. And yet there was such an enormous wealth of knowledge in that company that for whatever reason they’ve been unable to harness and it appears to be a deliberate action not to do it as opposed to one that just they found too hard to do.