Transcript source
ON Translate 2026 - Turning Ambition into ActionTranscript
[Music plays and an image appears of a split circle, and photos move through of CSIRO activities in either side of the circle, and then the circle morphs into the CSIRO logo]
[Image changes to show three profile photos in circles across the middle, and text appears above and below the photos: Keynote & Discussion, Turning ambition into action- What needs to change in Australia’s R&D system now, Tennille Eyre, Program Director, ON Innovation Program, Cathy Foley AO PSM, Australia’s former Chief Scientist, CSIRO Board Member, President of ATSE, Dr Kate Cornick, CEO of Tech Council of Australia, 2024/25 Panel Member for the Strategic Examination of R&D]
[Image changes to show a panel of two speakers, Dr Kate Cornick sitting on the left listening to Tennille Eyre sitting and talking on the right]
Tennille Eyre: Okay, now I know that neither of these ladies need much of an introduction.
[Camera zooms out to show the stage with the panel including a third speaker Dr Cathy Foley sitting on the left of Kate as they both listen to Tennille talking on the right and pointing at Kate who gives a wave]
However, what I would like to quickly, quickly introduce, so Cathy is our former Chief Scientist of Australia, current president of ATSE, a CSIRO board member, physicist, inventor and one of Australia's most respected science leaders.
[Image continues to show Tennille talking as she points at Kate, as Cathy and Kate are listening]
And alongside Cathy is Kate Cornick, the Chief Executive Officer of the Tech Council of Australia who's worked across start-ups, venture capital, Launch Victoria, ecosystem development, Government and innovation policy and most recently contributed to the strategic examination of R&D, SERD - the Ambitious Australia report.
[Image continues to show Tennille talking with Cathy and Kate listening]
Between them, they bring incredible perspectives from research, industry, investment and government and system reform, and we're incredibly lucky to have them both here with us today. So please thank them.
[Applause can be heard as the image shows Tennille clapping and Cathy and Kate look at each other smiling and laughing]
[Image continues to show Tennille talking with Cathy and Kate listening]
Now, Kate, the Ambitious Australia SERD report sets out a really comprehensive vision. And I know we discussed this briefly yesterday very much focused around strengthening Australia's R&D system. And many would agree those reforms are intended to work together, rather than as individual recommendations. If we're thinking pragmatically about the next 12 to 24 months, and I know that there's quite a, quite a timeline on us there, in the period of such change, where do you think Australia should focus and to maintain momentum and build confidence?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: Good question. Having spent a year looking at this issue, yes, tackling this issue and thinking about the facets that make up our innovation system, we ultimately landed with a flywheel.
[Image continues to show Kate talking with Cathy listening and Tennille nodding agreement while listening]
And we need our foundational research doing an amazing job to to build the knowledge from which we can build companies.
[Image continues to show Kate talking with Cathy and Tennille listening]
We want to be able to grow those companies. They need to be able to be exporting, creating jobs that creates wealth, which means that both the private sector and government can reinvest into, into research. It sounds quite straightforward, but it's fair to say that flywheel has never really worked effectively in Australia as it could.
[Image continues to show Kate talking with Cathy listening and Tennille having a glass of water while listening]
So we made 20 recommendations. We, as a panel, have strongly encouraged government to address all of them, they are interrelated.
[Image continues to show Kate talking with Cathy and Tennille listening]
We don't want to see cherry picking, but we do see that there are some recommendations that will necessarily happen faster than others. And one of those is we recommended a National Innovation Council, and we as a panel were really pleased to see in the budget that government announced a National Resilience and Innovation Council, a Resilience and Science Council, which we understand will fulfil some of the objectives of the National Innovation Council. And that is a really positive first step because while it is a little bit boring, governance is really critical to getting things right and there are just a plethora of programs that exist in the federal government alone. Our review was covering between 150 and 190 programs in the federal government across 13 ministries, depending on who you spoke to. So having coordination and making sure that there's focus is really important in the system. So that's a really positive first step. But we've also seen changes come forward potentially around the RDTI and the venture capital industry. We also made recommendations around foundational research, the workforce and government as an exemplar. So there's a lot in that report. The executive summary is only eight pages. It's a fairly pithy read, and if you're interested, I highly recommend you have a look at that. But yeah, we certainly see that the Council is a really positive first step.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Fantastic. And Cathy, as a science leader, what of the recommendations really resonated with you that came through?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: Well, I think one of the things we're not good at doing in Australia is focusing on where our strengths are, and we tend to do a little bit of everything instead of saying where can we have a lot of strengths? But I've seen a real change in the last few years, which I think is encouraging, and I can't not raise the idea of how the research community, particularly the physicists in the country, got together after 25, 20 years or so of investment in quantum technologies, got themselves organised, got CSIRO to do a roadmap, then the government to invest in a strategic plan. And in six years we've gone from having less than a handful of companies to having over 50 companies that are quantum based and and we have one of the biggest quantum communities in the world and we are in the top ranking of quantum industries. So we now can say Australia has a new industry that came out of the research sector, and we need to do that more in other areas.
[Image continues to show Cathy talking with Kate listening and Tennille having a glass of water while listening]
So how that was achieved was actually not waiting for the government to do things because governments have a lot on their plate.
[Image continues to show Cathy talking with Kate and Tennille listening]
They've got the evidence there, but we also have a lot that we can empower ourselves to do, and that is to organise ourselves and be coordinated, not be fighting over the crumbs and sort of trying to say, I'm better than you and I should get the money, but saying, how can we grow the pie and be able to do this effectively?
[Image continues to show Cathy talking with Kate and Tennille listening]
Because really one of the things that came out from the SERD grant or Ambitious Australia was that we need industry to also contribute. We have one of the lowest business expenditure in research and development numbers in the world in the OECD. It is the lowest, I think, And, and that's because we are the land of SMEs. 99% of our businesses are small to medium enterprises. 70% of them have less than 20 people. But the thing that's really amazing is we're beginning to see those businesses, particularly which are coming from the research sector, growing at a great rate and ideas are not our problem. It's actually our scale up and our ability to when I was involved with the IISA, which is the industry Innovation and Science Australia, which is going to be merged into the the new, new Council, we did a report on what we call the missing middle. Because the Tech Council said, Australia actually for size of population is on par with the number of start-ups per population. So we've gone from, especially due to the ON program, which we should be very proud of, all being part of it, we’ve seen a real culture change in the research sector from saying “we don't know how to do this” to actually everyone pretty much having a spin out company and a, and a real ambition to commercialise their work. What we now have is that happening but now we have to work out how to support the businesses to really scale up. And we're not quite there yet and I think the Ambitious Australia has really pointed to the things that have to be done in order to get there.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Thank you and no pressure anyone, Cathy has said the change is well underway and so keep, keep up the good work. But it's also really great to know that there are some really fantastic ON alumni in that quantum space.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: In fact, if you talk to many people who have started businesses, they were university professors, some of them still are and doing joint roles, but some have actually jumped ship. And I'll give you one example. I don't know if Q-CTRL was from here, but I know they were supported by Main Sequence Ventures. And you know, Michael Biersuk, who was a professor with a really top track record scientifically, he actually has left the university system and I think it's three weeks ago, his business was was identified as one of the top ten global innovative companies in the world by Time Magazine next to SpaceX and companies like that. So we are able to do it. And I think we need to be in really uplifting everyone and celebrating when anyone is successful, we're all going to be successful. And that’s, we've got to sort of get rid of our tall poppy love and actually put that in the bin and think about how can we celebrate everyone's success?
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Absolutely, absolutely. So Cathy, I'm going to follow on with a question for you around our challenge isn't the shortage of the great research, as you said, but a system that's fragmented and under scaled and how do we support those start-ups with that scaling stage? Is the scale up section the biggest break in that chain that you see today, or is there actually something else that's happening?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: So I think the biggest issue we have is that that scale up and we are missing some of the infrastructure that's needed. I was just talking to one of your, your finalists today and about their company and how do we actually support the businesses to go from that tricky stage of doing cottage industry, which you can do in a lab getting to that proof of concept. I think we're pretty okay at that although, you know, I think we we still need to make sure we keep that consistency of funding happening because we do tend to chop and change our programs so that no one knows what program to follow because they keep changing either their name or their, where they, where they are. So that's, that's a, that's a need. But the other is looking at other infrastructures that we have in place so that businesses can scale up because especially in the deep tech area where you have to get to a certain point to be able to attract the investment, there’s a real sort of gap there, you might call it a valley of death. And so for example, in sensors, which is where where my area is in Australia is really strong in sensor development, it is a very hard area to, to commercialise, same with materials as well.
[Image continues to show Cathy talking with Kate and Tennille listening]
Because you can do this stuff which is a proof of concept, the lab stuff and things which you can use, programs like the National Fabrication Facility, that sort of thing. But then in getting to that point where we're able to do a, enough to be able to get into the market because in the end we have to have people buying this stuff to attract the investors. And so that translation stage of small to medium and then to growth is, we're still working out how to do that. But there’s, I'll give you one example, which is really good. One of my post, post Chief Scientist jobs is being on the Bradfield Development Authority board. So that's building a new city next to the Western Sydney Airport.
[Image continues to show Cathy talking with Kate listening and Tennille having a glass of water while listening]
The airport opens in October. It's ready to go now.
[Image continues to show Cathy talking with Kate and Tennille listening]
And they're building a deep tech city with, the idea is to be a place where businesses can scale up, and they've invested $200 million into building a packaging facility and a manufacturing place. So as an example of where, where governments are putting the money in so that we can do that so that's the beginning of it. But what's really important is that we recognise that we don't need lots of those, there’s only seven of those facilities in the world so we need to make sure that we then don't build another one in another place so that we start to dilute our efforts. So that focus and organisation and realisation that we have to have enough place based stuff and platform things in areas where people will go for that period of time to get to that next stage, but then be able to leave after that and go wherever it is they need to go.
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I think that's a really important point is the amount of competition we have in our federated system really holds us back.
[Image continues to show Kate pumping her fist into the air while talking with Cathy and Tennille listening]
And it's somewhat ironic that I've just come off a decade of running the Victorian Government Agency where we're like, Victoria is fantastic and this is the place to start your start up.
[Image continues to show Kate talking with Cathy and Tennille listening]
But the reality is, is there's a lot of duplication that's happening between States and if you can coordinate and get that focus, we would be a much more powerful country.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: And the thing is interesting is each State is a bit different. You know, even their, their population is different.
[Image continues to show Cathy putting down her notes and drawing shapes with her hands in the air while talking with Kate and Tennille listening]
Their industry sectors are different. And that's what we found with the Quantum was that each State actually had, look, it's a, a bell diagram where, where you've got a bit of everything but where your peak is actually moved. So that you have, you know, sort of different states, so Sydney is really big on silicon quantum computing, say.
[Image continues to show Cathy talking with Kate and Tennille listening]
Victoria is really big on diamonds so they're building a foundry here. And so, and if you go to each state, they've got a little bit of a different one - Queensland photonics, Western Australia sensors so and South Australia as well. So getting an understanding of that, I think, and recognising to focus for those areas in the, in their State, in their place based opportunity will make a big difference.
[Image continues to show Tennille talking with Kate listening and Cathy picking up her notes again while listening]
Tennille Eyre: Yeah. And do you see any other challenges or bottlenecks occurring in the sector at the moment?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: Yeah. I mean I think there's bottlenecks all the way through. And one of the challenges is, is start-up creation. If you are in Silicon Valley, most founders have had an experience of working at a start-up, for a start-up. For some, we've got so many people for this for which this is the first time journey. And so I think there's a lot of support that's needed to help those entrepreneurs. I think sometimes we put too much pressure on the research system.
[Image continues to show Cathy talking with Kate listening and Tennille is pouring herself a glass of water while listening]
The reality is, is that in the US, only 10% of start-ups are directly related to university or research institution spinouts. Yet virtually every AI company exists because of the 50 years of research that's gone before.
[Image continues to show Kate talking with Cathy and Tennille listening]
So it's not about saying to researchers, we now need you to commercialise. If you want to do that, that’s awesome. But we also got to create those pathways where if you're doing amazing research in the lab and you don't want to run a business, we've got the pathways that bring that through. We've got to create the environment where entrepreneurs who, you know, the average entrepreneur is 42 years old, they're sitting in a job in a city or at their home office feeling a bit disgruntled, probably identified a problem. They're saying, do I pay my mortgage? Do I keep my safe job? Or do I take the risk of starting a start-up and helping people take that risk and be rewarded for it is really important. And I think that also goes to tall poppy syndrome, which is pretty diabolical in Australia. We can do it for sports, we can elevate our sporting heroes, but we don't elevate the people who are fundamentally changing, changing our industries or creating people, creating jobs, changing lives, creating products that are, that are changing the world. So we do have some issues there and then we're going to get on to investment as well. And I think that's a real challenge for for the Australian environment.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Which is a really lovely segue to the follow up question I was going to ask you actually was what, what do you hear from industry that they need from the research sector to lean in? What’s, what could the ask be to the room today?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: Yeah, I think it depends where you are at in industry.
[Image continues to show Cathy talking with Kate listening and Tennille is having a glass of water while listening]
If you are a small business that is a, we would say at LaunchVic a traditional small business that is needing to engage with the research community.
[Image continues to show Kate talking with Cathy and Tennille listening]
That's entirely different from a founder that's got a vision for, you know, some sensing technology in the agriculture sector. They're very different needs and they're both really important, and indeed corporates as well. I say small business, you can throw corporates in the mix. So I think it's being sophisticated about what industry engagement means and recognising that different people will have different needs. If you're doing an industry engagement with a Telstra, as I did when I was doing my PhD, that's entirely different from doing an engagement with a founder that's trying to get a product off the ground, which might be a co-founding partnership. It might be a piece of a small scale research because let's face it, early stage founders can't afford to pay a lot of money. There's a variety of different ways that that can roll out. So I think we need to be really sophisticated about what industry engagement is and means and we certainly looked at that through the SERD process. In the process of start-up creation, which is I know why we're here today, I think the translation piece is really important in the context of programs like CSIRO ON and all the things you said up front about making sure you're having lots of conversations, helping people understand how they can really finesse their product market fit. Go out and speak to investors at the right time when it makes most sense is really important. So I think it's a you know, we do have a lot of opportunity in our system, but we have a lot of challenges and we do need to get to a greater level of sophistication in our translation process, I think.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Well, that's an incredibly lovely segue to Cathy around what do you see trying to meet industry expectations for institutions and organisations? What do they need to do differently?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: So I think one of the things we're not very good at is actually talking to the potential user of our new invention and idea so that we align it where there's a market. I think we've been a bit slow at doing that, but we're getting better. And if you are introducing new technologies and I'll use the Quantum one as an example because we're doing so well there, but these are technologies, some are available now but many are in the future. But people can access early stage things now like the noisy intermediate scale quantum computers. You can get access on on, on, on the cloud through to sensor systems and communications and preparedness for, for when quantum computers are going to impact on our communications and our security and so therefore being a post-quantum encrypted ready. So one of the things that's been really interesting is trying to show the awareness to industry as well and bring them together. And what I thought was really an interesting outcome was where we got together with the CSIRO universities when I was in the Chief Scientist role and we just ran without any permission or without any authority or money, we ran a whole lot of quantum meets programs. And what we did was get an industry sector together with the quantum industry, with researchers and say, we've got this coming. how can we solve your problems? They're saying these are our problems and, and it would be great if a quantum technology could solve them. We've had several companies come out of this.
[Image continues to show Cathy talking with Kate listening and Tennille is having a glass of water while listening]
The first one was Quantum Meets Sport, and we saw the Queensland government invest $8 million into quantum research to help them deal with the, with the future 2032 Olympic Games, because it's a big logistics problem and if you can get a quantum problem, a quantum solution to that, that would be an enormous saving for them.
[Image continues to show Cathy talking with Kate and Tennille listening]
So these are the sorts of things where you're sort of showing people pathways, who are going to buy it so that you are creating that that industry pathway early enough. Not at the end where I've got a widget, but no one wants to buy it because we didn't talk to the right people. And that I, and I think that's where the ON program has been so good because it has introduced this idea of not being afraid to say, I've got this idea, how will you use it? And people say, look, it's no good here, but over here is very useful. And becoming part of our everyday of how you do research if that’s, you know, knowing you've got a research, you want to lead to an application and an impact, then having that pathway and the steps to do that is something that exists now. And I mean, when I did my PhD, I finished in 1984/85 and the idea of a researcher then was, you know, do the research, publish a paper and then rinse and repeat. Never the idea of spinning out a company at all. It was just an anathema for any it wasn't, you know, it just wasn't part of it. But now we're getting to a point where we're seeing PhD students actually thinking about a project which they can see as part of the supply chain for something, whether it's quantum or semiconductors or material, and then spinning out a company afterwards. And some of them have been very successful.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Absolutely. And the teams and the cohorts that are going through the program now joining, going to be joining that very successful list I'm sure. Now, Kate, you've recently stepped into the CEO role of Tech Council Australia. What do businesses actually need to see from the researchers?
[Image continues to show Tennille pointing at Cathy and Kate while talking with Cathy and Kate listening]
Oh, actually we've just covered that one, so don't mind me and I don't want to keep keep everyone behind the sides of things.
[Image continues to show Tennille talking with Cathy and Kate listening]
The latest Budgets response to the commercialisation community suggests that there's some early stage transition, translation mechanisms that have been cancelled, paused or weakened. So let's address the elephant in the room. Cathy, what do you think are the practical consequences of that for deep tech and research translation?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: Well, look, the first thing is that I, I found that it's not very helpful going and throwing rotten tomatoes at government actions because you've got to play the long game. And I tell my kids this all the time, always think about playing the long game because things come and go, things change. You can also have a situation where the economic you know, global economic situation can change overnight like it did during the global financial crisis or a war starts or, you know, something, there’s a pandemic. So we have to, I think, be looking at how to make the most of what we've got. That's the first thing. But also being engaging with government in a way to say this is the pathway forward. Look, I have to say, I was super excited when we did have for the first time this idea of, you know, research being supported at that early stage. And then we had the economic accelerator, which gave a pathway to turn that into a proof of concept. And then we had the industry, what is it growth.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Industry growth.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: Program, which then allowed you to start scaling up to be able to be invested in things like Main Sequence Ventures and non, and the National Reconstruction Fund. Look, that it's clear that the government has something in mind and I think you've got to remember that they understand that pathway. And we I, I’m, I'm hopeful that what we're seeing is just a hiccup while they're reorganising things to be able to make sure they're sustainable. Because one of the things which I'm getting a sense of, particularly when you're looking at the government's desire for future made in Australia, is that they want to make sure that we've got things set up, we’ve got businesses and the government support is there, so it's investable and it's because governments only have so much money. We're seeing all the hullabaloo over trying to make some tax changes at the moment to try and make sure they've got money to, to deal with.
[Image continues to show Cathy talking with Kate and Tennille listening]
So working out how we can actually look at other parts of our whole ecosystem to put money in the place so that we're not coming across as just entitled and saying, you know, I often say one of the problems we have in Australia - and this is what government hears a lot - is when we go and meet government or engage with any officials it's our shaking of the hand is like this and and that doesn't go down well. What we have to do is come back with some idea with these are pathways forward and these are the things we need to do to, where the support is there and these are the the, I guess the gaps which no one else will fund and this is what we need government to fund. So having that clarity, I think we're in I think we're sort of caught between the staging and as you were saying, the government can't do everything in one hit as much as we'd like to, but we've got to be a little bit patient. And it's very frustrating knowing that that patience might be at the bad time when I was hoping something might be that bit of magic investment. So we've got to then go and look for magic investment from somewhere else.
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I entirely agree with Cathy, and I think one of the things that we got a lot of pressure through SERD was to encourage government to put more money into the system. And I think what we, as a panel, where we landed was that we actually need to spend the money that's in the system better, then we can better argue to go and spend more money. There is actually an awful lot of money that flows around the broader R&D system in Australia. But as I said before, it's spread across over 150 programs and as Cathy says, we need focus. So if we're going to focus that money in a, in a better way, then we will end up better for it. But as with any change, there's always a little bit of pain along the way. And I think we are in one of those points.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: And I think one of the things is also understanding how the public service works, because different government departments are set up to deliver on different things and being politically incorrect, think of pink batts where it's being delivered by the Department of Environment years ago. Dealing with programs where you're giving out money to industry needs a different sort of support than possibly a different department that's focused on another area. So what I'm getting a sense of is that they're going through a process to try and make sure that we reduce the number of bits popping out so that there is a coordinated way that the overhead costs are are reduced because you've got fewer programs and the, and the stuff that goes around it. But we also have to do that too.
[Image continues to show Cathy talking with Kate and Tennille listening]
Because if you look across the research sector, we've got lots of little bits and pieces all around both in and look, to be honest, if you look at the changes that are happening in CSIRO, they're all announced now, what you're seeing is CSIRO doing exactly the same thing. We're trying to say, look, we've got this much money and how can we use it better so that we have bigger impact and deliver on what the what the country wants. And, and I think we, what we're getting a sense of is exactly what Ambitious Australia was saying is we need to do this across the university sector, across all the different research institutes, and work out how can we reorganise ourselves so that every dollar we invest in research - and it doesn't matter whether it's coming from philanthropic, from industry or from government - that actually turns into things that really do make a difference. And it isn't just keeping us as entitled scientists “because I did a PhD” employed because I think I deserve it. The world isn't like that anymore.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: And then transitioning away from grants from the investment side, Kate, we need to make a shift between just promising research and investable actual opportunities. So what are the policy changes that you're seeing or that are coming that are going to help unlock more private capital for Australian deep tech?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: Well, I think we have to recognise that a lot of the investment actually happens in the private sector. I think it's easy to go to government and say invest. The reality is this government can't afford to invest, we have to activate the private sector. And so the question is who is the private sector? And I think in the software industries we've seen a real development through the last decade, particularly since the introduction of the early stage Venture Capital Limited partnership regime, which has led to a proliferation of VCs, as well as a growing angel investment community. I think the challenge we've got in deep tech is it's additional risk and additional cost and hardware is complicated, there’s greater risks, you’re taking longer term bets and we don't have that patient capital. And so who fills that gap? And we can certainly look to government, in Victoria we’ve got Breakthrough Victoria, we’ve got the National Construction Fund that are filling that gap. But we have to recognise that those on their own are not sufficient. We need to be activating the private sector and in particular that, in a first step, is angels. A lot of people will come to me and say, get super funds to invest. They're not going to be investing in the earliest stages. It's too risky. They can't do it. They've got a responsibility to look after our retirement.
[Image continues to show Kate talking with Cathy and Tennille listening]
So we really need to be thinking how are we activating our angel communities? And a big part of that is actually education. And it's taking angels who are really comfortable with software and saying, actually, there's really exciting opportunities here in quantum, in biotechnologies, in agtech, etc., and medtech. And how do we help those investors get more confident investing in deep tech? That gets your your first check. And then we need to start building the venture capital funds that are going to be comfortable investing in deeper tech. And we've got wonderful funds like Main Sequence and others that are, Branded Capital, that are in this space, but we need many more of them. Having one or two is not enough, and it's certainly, some of the work that I'm really proud of that we did at LaunchVic was bringing multiple new VC funds to market, including in climate tech, in deep technologies, in medical technologies, and we want to see a proliferation of those early stage venture funds. And I think that's really the next stage of where our investment community should evolve to. Having said, we don’t, can't expect super funds to invest in the earliest of stages, it was really positive to see in the budget that government is is making some inklings towards changing some of the regulation around super funds, particularly performance tests. We'd love to see RG 97 in the mix as well, and that will encourage super funds to be able to then become limited partners in those early stage funds and later stage funds. And if we can encourage that, that would be really phenomenal because that's a really untapped resource. And by the time you get to a decent Series A, you're relatively de-risked and I think that's where super funds could play a real role in unlocking the environment that really supercharges our scale up community.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: There's one other area too, which I think there's great ambition to do this across government, but we're not really seeing it come to reality yet, and I think that was just because it will take time to be a culture change and that is procurement by governments. Governments are both, State and Federal, and also Councils, are the biggest procurers in the country and we tend to not buy Australian first because of the actual requirement we have put on our public service about what risk we're willing to accept as a country with investment of government money into buying things, as well as just understanding the role they play in that, that sort of early stage ecosystem and and having a risk appetite which is a little bit higher than they have at the moment. So we are seeing a lot of start-ups are actually getting investment or purchasing from international governments before they're actually bought by Australian governments. And this is something where it's absolutely a priority in that we're just, it's taking a while to actually come through the system because that whole process is, you know, it's a lot of money and it's also one which you don't want to just jump in and end up with it being done in a way that leads to it not being the outcome that we're all seeking to achieve.
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I completely agree. Procurement is a huge leap and we did make recommendations on that in the SERD report. At LaunchVic we had several examples which were just so disheartening, when you see these wonderful start-ups putting in procurement processes getting rejected but then they were, they were being subcontracted by international tech firms and they were applying, clipping the ticket and delivering the same service. And they would lose up to 40% of the contract value to deliver exactly what they put into the procurement process. It just makes no sense. And it is a real inhibitor to the, to the system working effectively.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: It's all about how we perceive risk. And I think as a country It's hilarious. We love betting on the Melbourne Cup, but when it comes to actually betting on our start-ups, we don't necessarily take that risk.
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I grew up in the UK and my impression of the Australian culture was really risk taking. It was the snowboarder, the skydiver, the, you know, guy jumping into the ocean chasing sharks and doing whatever. We're actually an extraordinarily risk averse culture and we do need to think about how we change that. And it was one of the recommendations of the SERD report went to culture, and we had a big debate about whether it should be the first recommendation, because unless we change our appetite to risk and our ability to have confidence to back our own, we really, all the other recommendations aren't going to achieve their full potential. And I know from my own experience when I ran a start-up over a decade ago, it was so much easier selling to the UK than selling into Australia. They just wanted to screw you on price. So long as you could do a cheaper price than the competitor, they will take the risk. In Australia they did not want to take the risk of working with a young company, and we still hear start-ups that are having these problems today. And so I would say procurement is not just a government problem. I think it exists across the community and we really need to encourage our corporates as well who are big procurers to step up to the task and back Australian.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: I'm conscious that we're getting close to the end of our time, and I don't want to prevent Cathy from missing her flight.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: Oh, I know, I have to walk straight out of here.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: But really great discussion. So Cathy, to the researchers that are in the room, they have a high potential idea very quickly, what should they do differently over the next 12 months to improve their chances of getting investment or reaching their next customer?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: So I think the first thing is play the long game, that’s the first thing. Be, I guess don't be afraid to just do it. Don't be afraid to ask for help. Don't be afraid to have pride in what you're doing, but also being part of a system that really wants you to be successful. And also don’t, compare yourself to the world, not to your local partner nearby because I think we've got to stop fighting in, within the country. We've actually got to be globally competitive and think in those ways. There is so much support already there. It's not perfect, but it's still a hell of a lot of support. And I think you see this in reality here. And so make the most of it and enjoy yourself. It’s, it can be, you know, such an uplifting experience to be able to commercialise something and see it make an impact. And apart from anything else, we really need it because Australia has to, between now and 2050 to transition about $300 billion of our exports away from fossil fuels. And if we're going to be a successful, prosperous, prosperous country, developing new industries is absolutely urgent.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: And so thinking ahead, Kate, what, over the next five years, what gives you the most confidence that Australia can become a leading innovation nation?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I actually think it's our people. I think we have phenomenal people. We have phenomenal research ideas. We've just got to unlock them and provide the right supports and networks to help the individuals that make up Australia achieve their full ambition.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: That's great.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Fantastic. Thank you both so much. It's been incredible having the opportunity to have you both here joining us on stage.
[Image continues to show Tennille pointing at Cathy and Kate while talking with Cathy and Kate listening]
Everyone, if you could please thank Dr. Cathy Foley and Dr. Kate Cornick.
[Applause can be heard as the image changes to show the CSIRO logo with text: CSIRO, Australia’s National Science Agency]
[Image changes to show three profile photos in circles across the middle, and text appears above and below the photos: Keynote & Discussion, Turning ambition into action- What needs to change in Australia’s R&D system now, Tennille Eyre, Program Director, ON Innovation Program, Cathy Foley AO PSM, Australia’s former Chief Scientist, CSIRO Board Member, President of ATSE, Dr Kate Cornick, CEO of Tech Council of Australia, 2024/25 Panel Member for the Strategic Examination of R&D]
[Image changes to show a panel of two speakers, Dr Kate Cornick sitting on the left listening to Tennille Eyre sitting and talking on the right]
Tennille Eyre: Okay, now I know that neither of these ladies need much of an introduction.
[Camera zooms out to show the stage with the panel including a third speaker Dr Cathy Foley sitting on the left of Kate as they both listen to Tennille talking on the right and pointing at Kate who gives a wave]
However, what I would like to quickly, quickly introduce, so Cathy is our former Chief Scientist of Australia, current president of ATSE, a CSIRO board member, physicist, inventor and one of Australia's most respected science leaders.
[Image continues to show Tennille talking as she points at Kate, as Cathy and Kate are listening]
And alongside Cathy is Kate Cornick, the Chief Executive Officer of the Tech Council of Australia who's worked across start-ups, venture capital, Launch Victoria, ecosystem development, Government and innovation policy and most recently contributed to the strategic examination of R&D, SERD - the Ambitious Australia report.
[Image continues to show Tennille talking with Cathy and Kate listening]
Between them, they bring incredible perspectives from research, industry, investment and government and system reform, and we're incredibly lucky to have them both here with us today. So please thank them.
[Applause can be heard as the image shows Tennille clapping and Cathy and Kate look at each other smiling and laughing]
[Image continues to show Tennille talking with Cathy and Kate listening]
Now, Kate, the Ambitious Australia SERD report sets out a really comprehensive vision. And I know we discussed this briefly yesterday very much focused around strengthening Australia's R&D system. And many would agree those reforms are intended to work together, rather than as individual recommendations. If we're thinking pragmatically about the next 12 to 24 months, and I know that there's quite a, quite a timeline on us there, in the period of such change, where do you think Australia should focus and to maintain momentum and build confidence?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: Good question. Having spent a year looking at this issue, yes, tackling this issue and thinking about the facets that make up our innovation system, we ultimately landed with a flywheel.
[Image continues to show Kate talking with Cathy listening and Tennille nodding agreement while listening]
And we need our foundational research doing an amazing job to to build the knowledge from which we can build companies.
[Image continues to show Kate talking with Cathy and Tennille listening]
We want to be able to grow those companies. They need to be able to be exporting, creating jobs that creates wealth, which means that both the private sector and government can reinvest into, into research. It sounds quite straightforward, but it's fair to say that flywheel has never really worked effectively in Australia as it could.
[Image continues to show Kate talking with Cathy listening and Tennille having a glass of water while listening]
So we made 20 recommendations. We, as a panel, have strongly encouraged government to address all of them, they are interrelated.
[Image continues to show Kate talking with Cathy and Tennille listening]
We don't want to see cherry picking, but we do see that there are some recommendations that will necessarily happen faster than others. And one of those is we recommended a National Innovation Council, and we as a panel were really pleased to see in the budget that government announced a National Resilience and Innovation Council, a Resilience and Science Council, which we understand will fulfil some of the objectives of the National Innovation Council. And that is a really positive first step because while it is a little bit boring, governance is really critical to getting things right and there are just a plethora of programs that exist in the federal government alone. Our review was covering between 150 and 190 programs in the federal government across 13 ministries, depending on who you spoke to. So having coordination and making sure that there's focus is really important in the system. So that's a really positive first step. But we've also seen changes come forward potentially around the RDTI and the venture capital industry. We also made recommendations around foundational research, the workforce and government as an exemplar. So there's a lot in that report. The executive summary is only eight pages. It's a fairly pithy read, and if you're interested, I highly recommend you have a look at that. But yeah, we certainly see that the Council is a really positive first step.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Fantastic. And Cathy, as a science leader, what of the recommendations really resonated with you that came through?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: Well, I think one of the things we're not good at doing in Australia is focusing on where our strengths are, and we tend to do a little bit of everything instead of saying where can we have a lot of strengths? But I've seen a real change in the last few years, which I think is encouraging, and I can't not raise the idea of how the research community, particularly the physicists in the country, got together after 25, 20 years or so of investment in quantum technologies, got themselves organised, got CSIRO to do a roadmap, then the government to invest in a strategic plan. And in six years we've gone from having less than a handful of companies to having over 50 companies that are quantum based and and we have one of the biggest quantum communities in the world and we are in the top ranking of quantum industries. So we now can say Australia has a new industry that came out of the research sector, and we need to do that more in other areas.
[Image continues to show Cathy talking with Kate listening and Tennille having a glass of water while listening]
So how that was achieved was actually not waiting for the government to do things because governments have a lot on their plate.
[Image continues to show Cathy talking with Kate and Tennille listening]
They've got the evidence there, but we also have a lot that we can empower ourselves to do, and that is to organise ourselves and be coordinated, not be fighting over the crumbs and sort of trying to say, I'm better than you and I should get the money, but saying, how can we grow the pie and be able to do this effectively?
[Image continues to show Cathy talking with Kate and Tennille listening]
Because really one of the things that came out from the SERD grant or Ambitious Australia was that we need industry to also contribute. We have one of the lowest business expenditure in research and development numbers in the world in the OECD. It is the lowest, I think, And, and that's because we are the land of SMEs. 99% of our businesses are small to medium enterprises. 70% of them have less than 20 people. But the thing that's really amazing is we're beginning to see those businesses, particularly which are coming from the research sector, growing at a great rate and ideas are not our problem. It's actually our scale up and our ability to when I was involved with the IISA, which is the industry Innovation and Science Australia, which is going to be merged into the the new, new Council, we did a report on what we call the missing middle. Because the Tech Council said, Australia actually for size of population is on par with the number of start-ups per population. So we've gone from, especially due to the ON program, which we should be very proud of, all being part of it, we’ve seen a real culture change in the research sector from saying “we don't know how to do this” to actually everyone pretty much having a spin out company and a, and a real ambition to commercialise their work. What we now have is that happening but now we have to work out how to support the businesses to really scale up. And we're not quite there yet and I think the Ambitious Australia has really pointed to the things that have to be done in order to get there.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Thank you and no pressure anyone, Cathy has said the change is well underway and so keep, keep up the good work. But it's also really great to know that there are some really fantastic ON alumni in that quantum space.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: In fact, if you talk to many people who have started businesses, they were university professors, some of them still are and doing joint roles, but some have actually jumped ship. And I'll give you one example. I don't know if Q-CTRL was from here, but I know they were supported by Main Sequence Ventures. And you know, Michael Biersuk, who was a professor with a really top track record scientifically, he actually has left the university system and I think it's three weeks ago, his business was was identified as one of the top ten global innovative companies in the world by Time Magazine next to SpaceX and companies like that. So we are able to do it. And I think we need to be in really uplifting everyone and celebrating when anyone is successful, we're all going to be successful. And that’s, we've got to sort of get rid of our tall poppy love and actually put that in the bin and think about how can we celebrate everyone's success?
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Absolutely, absolutely. So Cathy, I'm going to follow on with a question for you around our challenge isn't the shortage of the great research, as you said, but a system that's fragmented and under scaled and how do we support those start-ups with that scaling stage? Is the scale up section the biggest break in that chain that you see today, or is there actually something else that's happening?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: So I think the biggest issue we have is that that scale up and we are missing some of the infrastructure that's needed. I was just talking to one of your, your finalists today and about their company and how do we actually support the businesses to go from that tricky stage of doing cottage industry, which you can do in a lab getting to that proof of concept. I think we're pretty okay at that although, you know, I think we we still need to make sure we keep that consistency of funding happening because we do tend to chop and change our programs so that no one knows what program to follow because they keep changing either their name or their, where they, where they are. So that's, that's a, that's a need. But the other is looking at other infrastructures that we have in place so that businesses can scale up because especially in the deep tech area where you have to get to a certain point to be able to attract the investment, there’s a real sort of gap there, you might call it a valley of death. And so for example, in sensors, which is where where my area is in Australia is really strong in sensor development, it is a very hard area to, to commercialise, same with materials as well.
[Image continues to show Cathy talking with Kate and Tennille listening]
Because you can do this stuff which is a proof of concept, the lab stuff and things which you can use, programs like the National Fabrication Facility, that sort of thing. But then in getting to that point where we're able to do a, enough to be able to get into the market because in the end we have to have people buying this stuff to attract the investors. And so that translation stage of small to medium and then to growth is, we're still working out how to do that. But there’s, I'll give you one example, which is really good. One of my post, post Chief Scientist jobs is being on the Bradfield Development Authority board. So that's building a new city next to the Western Sydney Airport.
[Image continues to show Cathy talking with Kate listening and Tennille having a glass of water while listening]
The airport opens in October. It's ready to go now.
[Image continues to show Cathy talking with Kate and Tennille listening]
And they're building a deep tech city with, the idea is to be a place where businesses can scale up, and they've invested $200 million into building a packaging facility and a manufacturing place. So as an example of where, where governments are putting the money in so that we can do that so that's the beginning of it. But what's really important is that we recognise that we don't need lots of those, there’s only seven of those facilities in the world so we need to make sure that we then don't build another one in another place so that we start to dilute our efforts. So that focus and organisation and realisation that we have to have enough place based stuff and platform things in areas where people will go for that period of time to get to that next stage, but then be able to leave after that and go wherever it is they need to go.
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I think that's a really important point is the amount of competition we have in our federated system really holds us back.
[Image continues to show Kate pumping her fist into the air while talking with Cathy and Tennille listening]
And it's somewhat ironic that I've just come off a decade of running the Victorian Government Agency where we're like, Victoria is fantastic and this is the place to start your start up.
[Image continues to show Kate talking with Cathy and Tennille listening]
But the reality is, is there's a lot of duplication that's happening between States and if you can coordinate and get that focus, we would be a much more powerful country.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: And the thing is interesting is each State is a bit different. You know, even their, their population is different.
[Image continues to show Cathy putting down her notes and drawing shapes with her hands in the air while talking with Kate and Tennille listening]
Their industry sectors are different. And that's what we found with the Quantum was that each State actually had, look, it's a, a bell diagram where, where you've got a bit of everything but where your peak is actually moved. So that you have, you know, sort of different states, so Sydney is really big on silicon quantum computing, say.
[Image continues to show Cathy talking with Kate and Tennille listening]
Victoria is really big on diamonds so they're building a foundry here. And so, and if you go to each state, they've got a little bit of a different one - Queensland photonics, Western Australia sensors so and South Australia as well. So getting an understanding of that, I think, and recognising to focus for those areas in the, in their State, in their place based opportunity will make a big difference.
[Image continues to show Tennille talking with Kate listening and Cathy picking up her notes again while listening]
Tennille Eyre: Yeah. And do you see any other challenges or bottlenecks occurring in the sector at the moment?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: Yeah. I mean I think there's bottlenecks all the way through. And one of the challenges is, is start-up creation. If you are in Silicon Valley, most founders have had an experience of working at a start-up, for a start-up. For some, we've got so many people for this for which this is the first time journey. And so I think there's a lot of support that's needed to help those entrepreneurs. I think sometimes we put too much pressure on the research system.
[Image continues to show Cathy talking with Kate listening and Tennille is pouring herself a glass of water while listening]
The reality is, is that in the US, only 10% of start-ups are directly related to university or research institution spinouts. Yet virtually every AI company exists because of the 50 years of research that's gone before.
[Image continues to show Kate talking with Cathy and Tennille listening]
So it's not about saying to researchers, we now need you to commercialise. If you want to do that, that’s awesome. But we also got to create those pathways where if you're doing amazing research in the lab and you don't want to run a business, we've got the pathways that bring that through. We've got to create the environment where entrepreneurs who, you know, the average entrepreneur is 42 years old, they're sitting in a job in a city or at their home office feeling a bit disgruntled, probably identified a problem. They're saying, do I pay my mortgage? Do I keep my safe job? Or do I take the risk of starting a start-up and helping people take that risk and be rewarded for it is really important. And I think that also goes to tall poppy syndrome, which is pretty diabolical in Australia. We can do it for sports, we can elevate our sporting heroes, but we don't elevate the people who are fundamentally changing, changing our industries or creating people, creating jobs, changing lives, creating products that are, that are changing the world. So we do have some issues there and then we're going to get on to investment as well. And I think that's a real challenge for for the Australian environment.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Which is a really lovely segue to the follow up question I was going to ask you actually was what, what do you hear from industry that they need from the research sector to lean in? What’s, what could the ask be to the room today?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: Yeah, I think it depends where you are at in industry.
[Image continues to show Cathy talking with Kate listening and Tennille is having a glass of water while listening]
If you are a small business that is a, we would say at LaunchVic a traditional small business that is needing to engage with the research community.
[Image continues to show Kate talking with Cathy and Tennille listening]
That's entirely different from a founder that's got a vision for, you know, some sensing technology in the agriculture sector. They're very different needs and they're both really important, and indeed corporates as well. I say small business, you can throw corporates in the mix. So I think it's being sophisticated about what industry engagement means and recognising that different people will have different needs. If you're doing an industry engagement with a Telstra, as I did when I was doing my PhD, that's entirely different from doing an engagement with a founder that's trying to get a product off the ground, which might be a co-founding partnership. It might be a piece of a small scale research because let's face it, early stage founders can't afford to pay a lot of money. There's a variety of different ways that that can roll out. So I think we need to be really sophisticated about what industry engagement is and means and we certainly looked at that through the SERD process. In the process of start-up creation, which is I know why we're here today, I think the translation piece is really important in the context of programs like CSIRO ON and all the things you said up front about making sure you're having lots of conversations, helping people understand how they can really finesse their product market fit. Go out and speak to investors at the right time when it makes most sense is really important. So I think it's a you know, we do have a lot of opportunity in our system, but we have a lot of challenges and we do need to get to a greater level of sophistication in our translation process, I think.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Well, that's an incredibly lovely segue to Cathy around what do you see trying to meet industry expectations for institutions and organisations? What do they need to do differently?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: So I think one of the things we're not very good at is actually talking to the potential user of our new invention and idea so that we align it where there's a market. I think we've been a bit slow at doing that, but we're getting better. And if you are introducing new technologies and I'll use the Quantum one as an example because we're doing so well there, but these are technologies, some are available now but many are in the future. But people can access early stage things now like the noisy intermediate scale quantum computers. You can get access on on, on, on the cloud through to sensor systems and communications and preparedness for, for when quantum computers are going to impact on our communications and our security and so therefore being a post-quantum encrypted ready. So one of the things that's been really interesting is trying to show the awareness to industry as well and bring them together. And what I thought was really an interesting outcome was where we got together with the CSIRO universities when I was in the Chief Scientist role and we just ran without any permission or without any authority or money, we ran a whole lot of quantum meets programs. And what we did was get an industry sector together with the quantum industry, with researchers and say, we've got this coming. how can we solve your problems? They're saying these are our problems and, and it would be great if a quantum technology could solve them. We've had several companies come out of this.
[Image continues to show Cathy talking with Kate listening and Tennille is having a glass of water while listening]
The first one was Quantum Meets Sport, and we saw the Queensland government invest $8 million into quantum research to help them deal with the, with the future 2032 Olympic Games, because it's a big logistics problem and if you can get a quantum problem, a quantum solution to that, that would be an enormous saving for them.
[Image continues to show Cathy talking with Kate and Tennille listening]
So these are the sorts of things where you're sort of showing people pathways, who are going to buy it so that you are creating that that industry pathway early enough. Not at the end where I've got a widget, but no one wants to buy it because we didn't talk to the right people. And that I, and I think that's where the ON program has been so good because it has introduced this idea of not being afraid to say, I've got this idea, how will you use it? And people say, look, it's no good here, but over here is very useful. And becoming part of our everyday of how you do research if that’s, you know, knowing you've got a research, you want to lead to an application and an impact, then having that pathway and the steps to do that is something that exists now. And I mean, when I did my PhD, I finished in 1984/85 and the idea of a researcher then was, you know, do the research, publish a paper and then rinse and repeat. Never the idea of spinning out a company at all. It was just an anathema for any it wasn't, you know, it just wasn't part of it. But now we're getting to a point where we're seeing PhD students actually thinking about a project which they can see as part of the supply chain for something, whether it's quantum or semiconductors or material, and then spinning out a company afterwards. And some of them have been very successful.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Absolutely. And the teams and the cohorts that are going through the program now joining, going to be joining that very successful list I'm sure. Now, Kate, you've recently stepped into the CEO role of Tech Council Australia. What do businesses actually need to see from the researchers?
[Image continues to show Tennille pointing at Cathy and Kate while talking with Cathy and Kate listening]
Oh, actually we've just covered that one, so don't mind me and I don't want to keep keep everyone behind the sides of things.
[Image continues to show Tennille talking with Cathy and Kate listening]
The latest Budgets response to the commercialisation community suggests that there's some early stage transition, translation mechanisms that have been cancelled, paused or weakened. So let's address the elephant in the room. Cathy, what do you think are the practical consequences of that for deep tech and research translation?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: Well, look, the first thing is that I, I found that it's not very helpful going and throwing rotten tomatoes at government actions because you've got to play the long game. And I tell my kids this all the time, always think about playing the long game because things come and go, things change. You can also have a situation where the economic you know, global economic situation can change overnight like it did during the global financial crisis or a war starts or, you know, something, there’s a pandemic. So we have to, I think, be looking at how to make the most of what we've got. That's the first thing. But also being engaging with government in a way to say this is the pathway forward. Look, I have to say, I was super excited when we did have for the first time this idea of, you know, research being supported at that early stage. And then we had the economic accelerator, which gave a pathway to turn that into a proof of concept. And then we had the industry, what is it growth.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Industry growth.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: Program, which then allowed you to start scaling up to be able to be invested in things like Main Sequence Ventures and non, and the National Reconstruction Fund. Look, that it's clear that the government has something in mind and I think you've got to remember that they understand that pathway. And we I, I’m, I'm hopeful that what we're seeing is just a hiccup while they're reorganising things to be able to make sure they're sustainable. Because one of the things which I'm getting a sense of, particularly when you're looking at the government's desire for future made in Australia, is that they want to make sure that we've got things set up, we’ve got businesses and the government support is there, so it's investable and it's because governments only have so much money. We're seeing all the hullabaloo over trying to make some tax changes at the moment to try and make sure they've got money to, to deal with.
[Image continues to show Cathy talking with Kate and Tennille listening]
So working out how we can actually look at other parts of our whole ecosystem to put money in the place so that we're not coming across as just entitled and saying, you know, I often say one of the problems we have in Australia - and this is what government hears a lot - is when we go and meet government or engage with any officials it's our shaking of the hand is like this and and that doesn't go down well. What we have to do is come back with some idea with these are pathways forward and these are the things we need to do to, where the support is there and these are the the, I guess the gaps which no one else will fund and this is what we need government to fund. So having that clarity, I think we're in I think we're sort of caught between the staging and as you were saying, the government can't do everything in one hit as much as we'd like to, but we've got to be a little bit patient. And it's very frustrating knowing that that patience might be at the bad time when I was hoping something might be that bit of magic investment. So we've got to then go and look for magic investment from somewhere else.
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I entirely agree with Cathy, and I think one of the things that we got a lot of pressure through SERD was to encourage government to put more money into the system. And I think what we, as a panel, where we landed was that we actually need to spend the money that's in the system better, then we can better argue to go and spend more money. There is actually an awful lot of money that flows around the broader R&D system in Australia. But as I said before, it's spread across over 150 programs and as Cathy says, we need focus. So if we're going to focus that money in a, in a better way, then we will end up better for it. But as with any change, there's always a little bit of pain along the way. And I think we are in one of those points.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: And I think one of the things is also understanding how the public service works, because different government departments are set up to deliver on different things and being politically incorrect, think of pink batts where it's being delivered by the Department of Environment years ago. Dealing with programs where you're giving out money to industry needs a different sort of support than possibly a different department that's focused on another area. So what I'm getting a sense of is that they're going through a process to try and make sure that we reduce the number of bits popping out so that there is a coordinated way that the overhead costs are are reduced because you've got fewer programs and the, and the stuff that goes around it. But we also have to do that too.
[Image continues to show Cathy talking with Kate and Tennille listening]
Because if you look across the research sector, we've got lots of little bits and pieces all around both in and look, to be honest, if you look at the changes that are happening in CSIRO, they're all announced now, what you're seeing is CSIRO doing exactly the same thing. We're trying to say, look, we've got this much money and how can we use it better so that we have bigger impact and deliver on what the what the country wants. And, and I think we, what we're getting a sense of is exactly what Ambitious Australia was saying is we need to do this across the university sector, across all the different research institutes, and work out how can we reorganise ourselves so that every dollar we invest in research - and it doesn't matter whether it's coming from philanthropic, from industry or from government - that actually turns into things that really do make a difference. And it isn't just keeping us as entitled scientists “because I did a PhD” employed because I think I deserve it. The world isn't like that anymore.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: And then transitioning away from grants from the investment side, Kate, we need to make a shift between just promising research and investable actual opportunities. So what are the policy changes that you're seeing or that are coming that are going to help unlock more private capital for Australian deep tech?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: Well, I think we have to recognise that a lot of the investment actually happens in the private sector. I think it's easy to go to government and say invest. The reality is this government can't afford to invest, we have to activate the private sector. And so the question is who is the private sector? And I think in the software industries we've seen a real development through the last decade, particularly since the introduction of the early stage Venture Capital Limited partnership regime, which has led to a proliferation of VCs, as well as a growing angel investment community. I think the challenge we've got in deep tech is it's additional risk and additional cost and hardware is complicated, there’s greater risks, you’re taking longer term bets and we don't have that patient capital. And so who fills that gap? And we can certainly look to government, in Victoria we’ve got Breakthrough Victoria, we’ve got the National Construction Fund that are filling that gap. But we have to recognise that those on their own are not sufficient. We need to be activating the private sector and in particular that, in a first step, is angels. A lot of people will come to me and say, get super funds to invest. They're not going to be investing in the earliest stages. It's too risky. They can't do it. They've got a responsibility to look after our retirement.
[Image continues to show Kate talking with Cathy and Tennille listening]
So we really need to be thinking how are we activating our angel communities? And a big part of that is actually education. And it's taking angels who are really comfortable with software and saying, actually, there's really exciting opportunities here in quantum, in biotechnologies, in agtech, etc., and medtech. And how do we help those investors get more confident investing in deep tech? That gets your your first check. And then we need to start building the venture capital funds that are going to be comfortable investing in deeper tech. And we've got wonderful funds like Main Sequence and others that are, Branded Capital, that are in this space, but we need many more of them. Having one or two is not enough, and it's certainly, some of the work that I'm really proud of that we did at LaunchVic was bringing multiple new VC funds to market, including in climate tech, in deep technologies, in medical technologies, and we want to see a proliferation of those early stage venture funds. And I think that's really the next stage of where our investment community should evolve to. Having said, we don’t, can't expect super funds to invest in the earliest of stages, it was really positive to see in the budget that government is is making some inklings towards changing some of the regulation around super funds, particularly performance tests. We'd love to see RG 97 in the mix as well, and that will encourage super funds to be able to then become limited partners in those early stage funds and later stage funds. And if we can encourage that, that would be really phenomenal because that's a really untapped resource. And by the time you get to a decent Series A, you're relatively de-risked and I think that's where super funds could play a real role in unlocking the environment that really supercharges our scale up community.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: There's one other area too, which I think there's great ambition to do this across government, but we're not really seeing it come to reality yet, and I think that was just because it will take time to be a culture change and that is procurement by governments. Governments are both, State and Federal, and also Councils, are the biggest procurers in the country and we tend to not buy Australian first because of the actual requirement we have put on our public service about what risk we're willing to accept as a country with investment of government money into buying things, as well as just understanding the role they play in that, that sort of early stage ecosystem and and having a risk appetite which is a little bit higher than they have at the moment. So we are seeing a lot of start-ups are actually getting investment or purchasing from international governments before they're actually bought by Australian governments. And this is something where it's absolutely a priority in that we're just, it's taking a while to actually come through the system because that whole process is, you know, it's a lot of money and it's also one which you don't want to just jump in and end up with it being done in a way that leads to it not being the outcome that we're all seeking to achieve.
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I completely agree. Procurement is a huge leap and we did make recommendations on that in the SERD report. At LaunchVic we had several examples which were just so disheartening, when you see these wonderful start-ups putting in procurement processes getting rejected but then they were, they were being subcontracted by international tech firms and they were applying, clipping the ticket and delivering the same service. And they would lose up to 40% of the contract value to deliver exactly what they put into the procurement process. It just makes no sense. And it is a real inhibitor to the, to the system working effectively.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: It's all about how we perceive risk. And I think as a country It's hilarious. We love betting on the Melbourne Cup, but when it comes to actually betting on our start-ups, we don't necessarily take that risk.
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I grew up in the UK and my impression of the Australian culture was really risk taking. It was the snowboarder, the skydiver, the, you know, guy jumping into the ocean chasing sharks and doing whatever. We're actually an extraordinarily risk averse culture and we do need to think about how we change that. And it was one of the recommendations of the SERD report went to culture, and we had a big debate about whether it should be the first recommendation, because unless we change our appetite to risk and our ability to have confidence to back our own, we really, all the other recommendations aren't going to achieve their full potential. And I know from my own experience when I ran a start-up over a decade ago, it was so much easier selling to the UK than selling into Australia. They just wanted to screw you on price. So long as you could do a cheaper price than the competitor, they will take the risk. In Australia they did not want to take the risk of working with a young company, and we still hear start-ups that are having these problems today. And so I would say procurement is not just a government problem. I think it exists across the community and we really need to encourage our corporates as well who are big procurers to step up to the task and back Australian.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: I'm conscious that we're getting close to the end of our time, and I don't want to prevent Cathy from missing her flight.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: Oh, I know, I have to walk straight out of here.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: But really great discussion. So Cathy, to the researchers that are in the room, they have a high potential idea very quickly, what should they do differently over the next 12 months to improve their chances of getting investment or reaching their next customer?
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: So I think the first thing is play the long game, that’s the first thing. Be, I guess don't be afraid to just do it. Don't be afraid to ask for help. Don't be afraid to have pride in what you're doing, but also being part of a system that really wants you to be successful. And also don’t, compare yourself to the world, not to your local partner nearby because I think we've got to stop fighting in, within the country. We've actually got to be globally competitive and think in those ways. There is so much support already there. It's not perfect, but it's still a hell of a lot of support. And I think you see this in reality here. And so make the most of it and enjoy yourself. It’s, it can be, you know, such an uplifting experience to be able to commercialise something and see it make an impact. And apart from anything else, we really need it because Australia has to, between now and 2050 to transition about $300 billion of our exports away from fossil fuels. And if we're going to be a successful, prosperous, prosperous country, developing new industries is absolutely urgent.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: And so thinking ahead, Kate, what, over the next five years, what gives you the most confidence that Australia can become a leading innovation nation?
[Image continues to show Kate talking with Cathy and Tennille listening]
Dr Kate Cornick: I actually think it's our people. I think we have phenomenal people. We have phenomenal research ideas. We've just got to unlock them and provide the right supports and networks to help the individuals that make up Australia achieve their full ambition.
[Image continues to show Cathy talking with Kate and Tennille listening]
Dr Cathy Foley: That's great.
[Image continues to show Tennille talking with Cathy and Kate listening]
Tennille Eyre: Fantastic. Thank you both so much. It's been incredible having the opportunity to have you both here joining us on stage.
[Image continues to show Tennille pointing at Cathy and Kate while talking with Cathy and Kate listening]
Everyone, if you could please thank Dr. Cathy Foley and Dr. Kate Cornick.
[Applause can be heard as the image changes to show the CSIRO logo with text: CSIRO, Australia’s National Science Agency]