Steering Australia through the Valley of Death

This article was originally published in The List Top 100 Innovators magazine in The Australian on 20 August 2021

There is a myth that universities are no good at commercialisation, but their role is not to create industry. It is to shape the brilliant minds of those who will, because commercialisation happens in the Valley of Death that separates academia from industry.

For decades Australia has faced the same problem: brilliant minds are trained in our universities, but their ideas are often commercialised offshore, because we don’t have the diversity or maturity in our innovation ecosystem to support them. That makes our Valley of Death wider and deeper than others.

Over the last 30 years we have fiddled at the edges of the problem, targeting more funding at research, or tax concessions for industry. Those programs have worked to an extent, but we are still falling in our global competitiveness, which today is at its lowest in 25 years.

In 1926, Australian Prime Minister Stanley Bruce gave a speech that called for the creation of what would become the CSIRO, an organisation formed to “bring about co-operation” between research and industry to solve our greatest challenges.

His speech gave examples of what was possible when science and industry worked together – but overlooked the inventor-entrepreneurs outside of academia making global headlines at the time. By 1926, American Thomas Edison had filed over 1,000 patents, founded the first American industrial research laboratory, and established the company that would go on to become General Electric. The same year, Scotsman John Logie Baird gave his first public demonstration of his new invention, the television.

Perhaps Prime Minister Bruce didn’t mention the likes of Edison or Baird because they didn’t fit his definition of innovation, he was only interested in universities and science institutes. But they did spend time at university – before commercialising their research in industry.

I nearly took the university career track after my PhD, but I decided to spend a year in Silicon Valley instead. Twenty-six years and six companies later, I came home to Australia to see if CSIRO could be the catalyst our innovation system needed.

We steered CSIRO very deliberately into the Valley of Death.

We worked with universities to create the ON Accelerator , which saw almost 3,000 researchers from across CSIRO and 39 universities to take their ideas through to business concepts. We brought them into our labs in Lindfield and Clayton and helped them engineer their ideas into prototypes so customers could test them. This was the secret sauce behind ON, and why it outperformed the best science accelerator in the world – the US iCorps program.

We are continuing to deliver a range of ON programs , which so far have helped to create 66 new companies, thirteen of which have raised more than $43 million of investment capital combined. One was CSIRO spin-out Coviu , a telehealth company that raised $6 million during the pandemic.

We also created the CSIRO Innovation Fund , managed by Main Sequence Ventures , to create, fund and accelerate deep tech companies to leap over the Valley of Death into commercial feasibility.

Our recent Fund 2 raised $250 million from private investors, which will focus on a new model for commercialisation we’re calling ‘Venture Science’. Instead of science as a solution looking for a problem, we start by identifying a challenge, and then bring in industry, investors and research to co-design a brand-new company.

It’s how we created sustainable protein company v2food , which has raised $112 million. It’s also one of the ways we have grown CSIRO’s equity portfolio by ten-fold, and in turn our blue-sky science investment, as the rewards of innovation feed the virtuous cycle of more innovation.

But most importantly, those 66 new companies are now employing graduates right here in Australia.

These initiatives grew in a networked ecosystem of partners, drawing on trust and understanding fostered between universities, businesses, government departments, and communities.

They saw Australia enter the Reuters Global Top 25 list if innovators for the first time in 2017, and there is no question we can play in the global top 10, if we play as Team Australia.

As we approach 100 years since the era of Edison and Baird, we would love the next generation of inventor-entrepreneurs to call Australia home. But we must make sure their ideas can grow up here.

Our approach to supporting innovation needs to be as inventive and agile as the craft itself, but we don’t need to reinvent the wheel to do it.

Sir Isaac Newton was among the many students of Cambridge sent home to continue their studies during the Great Plague of London in the 1660s. During this time, he discovered gravity, early calculus, and optics. He later remarked that if he had “seen further, it is by standing on the shoulders of giants”.

From WiFi to Cochlear to our role in supporting the global COVID-19 response, Australia has been home to giants in the field of innovation. We need to climb onto their shoulders now and look beyond what’s worked before, to what will work next. That’s what innovation is all about.