Max Whitten was Professor of Genetics at the University of Melbourne, and Chief of CSIRO's Division of Entomology from 1981 - 1995. He is a Fellow of the Australian Academies of Science and Technological Sciences & Engineering.

    Professor Whitten's article, "Don't Cry for Me Australia" in the July 2002 Australasian Science stimulated wide ranging comment.

Journalist Bill Pheasant (Fin Rev Wed 15 Oct) suggests an ailing CSIRO can be rescued by a commercialisation refit. Even veteran CSIRO critic, Peter Farrell, the Australian US-based CEO of ResMed, sees light at the end of the tunnel – now that he has entered a commercial arrangement that offers CSIRO some $50 million in corporate funds from a new $250m venture with his own company, Scientiaus. 

Perhaps Mehrdad Baghai, CSIRO Executive Director of Business Development and Commercialisation, and Farrell can make a quick quid for CSIRO and Scientiaus from trawling through CSIRO’s 3500 patents. Certainly someone needs to rescue Baghai if the recently released CSIRO Annual Report accurately portraits the income to CSIRO from Intellectual Property.  Revenue from IP declined from a meager $16.9m to $13.8m during 2002/3. The accompanying text said this actually represented an increase if you allowed for a one-off item during 2001/02.  No mention was made of this unsustainable gain when highlighting an increase from $9.3m to 16.9m from IP in the last Annual Report.  Real ivy league ‘rabbit back in the hat’ stuff!

There is a legitimate place in the world for science entrepreneurs like Baghai and Farrell; and they should be encouraged to rummage through CSIRO’s treasure chest to make a quick buck for all.  But this in no way justifies the underlying thesis of Pheasant’s article that CSIRO should be commercialised.  To do that might well create a scientific corporation which will pursue knowledge pathways that generate valuable IP.  However, doing just that with CSIRO would mean that this nation would have to create another scientific and industrial research organization to serve Australia in the same effective manner, i.e. not primarily driven by imperatives for earning external income, which CSIRO had done for over 50 years.

Let me illustrate my argument with just one example.  I list some of the accomplishments of but one creative scientist in CSIRO’s Division of Entomology, Dr Jim DesMarchellier.  Some highlights of his life’s achievements show the different ways that inexpensive research can create real economic benefits, without putting immediate ‘commercialisation’ first.

In the late 1980’s DesMarchellier, a researcher in CSIRO’s Stored Grain Research Laboratory (SGRL) – a section of the Division of Entomology – convinced me as the then Chief of the Division that the Wheat Board had a policy that was costing farmers tens of millions of dollars each year.  Farmers were not allowed to deliver grain to bulk handling silos unless its moisture content was less than 11.5%.  There was a sound scientific basis for this figure as fungi and insects have difficulty surviving at lower moisture levels. But Jim was able to show that, as farmers wait for ripe wheat to fall to the 11.5% moisture target, certain unrecognized costs were incurred:

• The crop could lose one percentage point of protein each day;

• summer rain could cause significant losses; and

• farmers required expensive harvesting equipment to collect the grain at the ‘optimal’ time – a significant opportunity cost. 

By insisting on the 11.5% target, some growers delivered wheat that was well below this level; and by the time it was all mixed in the bulk storage, the percentage was unnecessarily below the threshold. Many countries harvest wheat at higher moisture contents and then lower it to the desired level by various means. All in all, farmers would save tens of millions of dollars if a more flexible policy was put in place. Trouble was we were challenging a Wheat Board policy that had been in place for decades.  How would the Board appear in the eyes of farmers if this revered policy was shown to be flawed?

When the possibility was raised with the Board of the SGRL, whose chairman was a representative of the Wheat Board, DesMarchellier and I were roundly criticised by the Chairman (as well as my boss in CSIRO) for messing in commercial matters – our job was to do the science.  Perseverance at our end eventually led to a policy change and the moisture content of grain on receival has risen, with farmers reaping real economic benefits. An economic assessment of the benefits to grain growers of this research (May 2002) put the benefits between $21.8m and $171.1m per annum.  So here is a case of research generating no intellectual property, indeed no one knew there was even a problem, but huge economic benefits have been captured by growers – and the community.

During his career, DesMarchellier’s research protected Australia’s gluten export market to the USA by showing that it did not contain residues of the prevailing grain protectant in use as the time.  The USA accepted our research because of CSIRO’s reputation as independent, objective and credible experts – saving a valuable export industry for Australia. Again, no IP but real economic impact.  Finally, DesMarchellier, with a colleague, also invented carbonyl sulphide, a fumigant suitable to replace methyl bromide, an ozone-depleting chemical now banned internationally.  He also played a role in inventing other fumigants that may never be used in the farming sector!  But the fumigants have been patented and will undoubtedly generate IP revenue. 

On the national political scene, DesMarchellier’s credibility was also influential.

In 1994, when the Senate was deliberating whether to establish an enquiry into CSIRO’s shrinking agricultural research, the suggestion was strongly opposed by CSIRO’s senior management. They lobbied the National Farmers Federation and were pressuring John Anderson, then Shadow Minister for Primary Industries, to oppose establishing the enquiry. Anderson visited the Division of Entomology to discuss with me the pros and cons of the mooted Enquiry.  I took him to see just one scientist – Jim DesMarchellier.  At the end of the interview, Anderson said to me “We will support establishment of the enquiry”. The result was a bipartisan report “CSIRO: the case for revitalization” – unanimously supported by all members which led to major changes in the upper management structure of CSIRO – i.e. the abolition of CSIRO’s dysfunctional upper management structure.

There is room in CSIRO for both the creative scientist like DesMarchellier and the entrepreneurial Baghai.  But the real CSIRO should be more about the DesMarchelliers, and less about the Baghais.   Yet there is little room in  CEO Geoff Garrett’s CSIRO for the creative geniuses like DesMarchellier who create real economic and social wealth for Australia.

CSIRO’s history has been built on such folk, doing as Pasteur would say, good science with an eye to its application.

Brad Collis’ book about CSIRO - Fields of Discovery – illustrates the case for CSIRO’s relevance and value on nearly every page.  Much of the research described by Collis was not capable of creating IP. In several cases it clearly could have but was not covered by patents, e.g. domestic solar hot water systems, and fibrous cement to replace asbestos cement.  Nevertheless, these innovations were taken up by Australian industry with large economic benefits for the country.

Farrell has always wanted to destroy the ‘iconic’ CSIRO simply because he cannot understand that there are many pathways beyond the narrow IP route to create lasting economic and social benefits. Farrell is probably even more damaging to CSIRO now because his new enthusiasm for the commercialised CSIRO will only hasten the demise of the traditional public good CSIRO with its pluralistic approach to creating real wealth for Australia.