Evaluating our impact

[CSIRO logo appears on screen and then changes to show the panel members seated at tables at the front of a large room of participants]

[00:00:08]

Ticky Fullerton:

I am absolutely delighted to be here.  It’s not often as a journalist you get to wrangle a panel of such clever cats.  And indeed thinking about it, the Chief Scientists, the Head of CSIRO, a Vice-Chancellor and three or four industry bigwigs, it’s a very exciting discussion that we’re going to have. Now there’s been a lot of work put into this panel by people other than myself. There was crowd surfing done of questions, I think some of you will have participated. 

[Camera zooms in on Ticky and then back out on the panel members]

We had 100 different specific questions which we shifted, sifted through and hopefully be able to get to touch on most of them. There’s 250 people in this room, there’s versus 350 more on webinar.  Lynette jump to you because data mining and, you know, Larry and that to me is your central role of S.A.S., can you explain for those of us, who don’t really know what S.A.S. is and does, what it does.    

[00:01:18]

Lynette Clunies-Ross:

Sure Ticky. So S.A.S. doesn’t stand for Scandinavian Airlines. It stands for Statistical Analysis Systems, we were founded 40 years ago in North Carolina State University by Dr Jim Goodnight. 

[Camera zooms in on Lynette]

And believe it or not, the first problem he had to solve was the problem of agricultural yield, and so he applied statistics to that. And now you would call that AGTech. Why? Because that’s the trendy thing to call it now. But in those days it was applying statistics to agricultural yield problems. So largest privately owned software company in the world. It’s the number one leader in advanced analytics and data mining and analytics. And what else can I say? 

[Camera pans out to show the rest of the panel members]

[00:02:06]

Ticky Fullerton:

And it’s here, and it’s here obviously.  It’s here.

[00:02:07]

Lynette Clunies-Ross:

And it’s here. And we spend 25% of our, in profits on research and development.

[00:02:16]

Ticky Fullerton:

How much?

[00:02:16]

Lynette Clunies-Ross:

Twenty five percent of our R&D goes back into… and that’s what you can do when you privately own your own company, you can spend what you like on innovation and innovation’s been very much part of the D.N.A. of S.A.S.

[00:02:32]

Ticky Fullerton:

Alright, now that sounds very upbeat. And I just want to pick you up on something because at that conference that you mentioned, the A.F.R. Conference that you were at, another innovation conference, I think you were saying that you were slightly concerned that maybe the innovation agenda, the government agenda have slightly perhaps gone off the rails. Now, and that it seemed to be a lot about the sort of hipster start-ups and that had kind of lost traction with the electorate. There seems to be a bit of a shift in government thinking, in leaders thinking at the moment that it’s just a much bigger thing than that. Is that right now?

[00:03:11]
Alan Finkel:

I think that’s correct. I’m not sure that I would’ve used terms like ‘having gone off the rail’ but I do agree with the sentiment of what you’re saying. The discussion did become a bit narrow and focused on what I call… I invented an acronym, I called S.V.T., innovation in the S.V.T. sector where S.V.T. is Silicon Valley Technology. 

[Camera zooms in on Alan]

And we’ve just had months, maybe a few years, where we’re comparing the whole of the country to Silicon Valley or television and saying, ‘gosh, we don’t compare favourably to that therefore there’s something wrong.’ And by this focus on high tech, if you like, digital technology, which is important, we have been not talking up the value and thinking about how we can invest and improve in the value of the other sectors of the economy. And one thing I’ve been talking about a lot in speeches is the fact that we are innovative across the economy. 

[00:04:13]
Ticky Fullerton:

So do you think we talk ourselves down a bit on innovation?

[[00:04:16]
Alan Finkel:

I think we talk ourselves down a lot on innovation. I think there’s a huge amount of negativity out there and people find their favourite O.E.C.D. or World Bank metric to criticise ourselves on… you see a lot more criticism than you do see encouragement and recognition of achievement. But if you look at the big sectors in our economy, such as mining and banking, tourism and agriculture, I think they’re built on innovation. 

[Camera pans out to show the rest of the panel members]

Now there are people in those sectors of the economy who might never have heard the word innovation until the last few years. I ran a company, which I think was quite innovative and successful in America in high tech, I don’t think in 24 years that I would’ve uttered the word innovation. It was all about finding a better way, relentless commitment to quality, market pull, being satisfied by technology push. It was just different language. We were very successful. And all of sudden you’ve had this almost a mantra that we have to talk about innovation in order to be innovative. And you could argue that the least innovative thing you can do is to talk about innovation, rather than just to get out there and do. 

[00:05:33]

Ticky Fullerton:

Alright, well let me talk about a big subject, which is investment from the private sector into this whole space.  Now I may be a bit out of date, 2015 I think there was only 12,500 businesses out of two million in Australia pre-registered for government tax breaks on R&D. Why is there, Geoff, so little interest from business in investing in R&D?

[00:06:07]

Geoff Culbert:

Well it’s hard for me to hear you talk on behalf of other companies, but I know from G.E.’s perspective it’s been the single reason why we’ve survived 130 years as a company. 

[00:06:21]
Ticky Fullerton:

So how much do you put into R&D?

[Camera zooms in on Geoff]

[00:06:23]

Geoff Culbert:

So we invest between 5% and 10% of our revenues every year back into R&D. So, you know, when you consider our revenues are upwards of $150 billion a year, you’re talking a lot of money. During the financial crisis our investment in R&D was the one thing that was preserved. Actually two things, training our people, and that’s worthy of a conversation as we go through this panel around developing a culture as well as just talking about change, transformation, innovation. We preserve those two because we know that as a company that is involved in high tech industrial equipment that we just cannot afford to stop our reinvesting back into our organisation, back into our technology. And we have horizons out 5/10/20 years. You know Boeing can talk this as well but we’re looking at technology now in aircraft engines that won’t see the light of day for 20 or 30 years. So we’re making investments now in R&D and technology that will find its way onto a Boeing wing in the year 2030/2035.

[00:07:35]

Ticky Fullerton:

So you’re a multinational obviously. Why is Australia a place for you to commit to spending R&D? What’s attractive about Australia?

[00:07:45]

Geoff Culbert:

Well Australia’s always been just a great place to pilot ideas and try ideas. So it’s a really interesting question. So, you know, G.E. operates in 175 countries around the world and it’s a knife fight internally for investment. Really is.  Like it’s… I’m competing against 174 other countries for every ounce of oxygen I can get from G.E. to invest here into Australia. So I have to differentiate Australia from everywhere else and I do that by showing G.E. that Australia is a place where you can trial and pilot and really interesting ideas. We’ve got smart and talented people. If it works here, it’s going to work around the world. We can get it up and running and scale it quickly and we’ve got the track record of success in that. Just this year, and this is a very interesting story, this year we invested in a company based out in Scoresby, out in the suburbs of Melbourne, called Daintree Networks. We invested $100 million to acquire that company. This is a company that does building automation software. They were set up from day one to develop software that they were going to sell into Fortune 500 companies in the U.S.

[00:08:55]

Ticky Fullerton:

So this was about keeping the lights on, or not keeping the lights on?

[00:08:58]

Geoff Culbert:

It’s about driving more efficient energy consumption in buildings, right.  So… and they have developed a platform that are now selling into Fortune 500 companies in the U.S., big companies that you’d know like, you know, building, big buildings occupied by the likes of J.P. Morgan. Their software engineers sit out in Scoresby, they do all their software R&D development out in Scoresby, and Scoresby’s not known as the epicentre of innovation. And I grew up out that way, out in Ringwood and I can tell you there wasn’t a lot of innovation going out there when I was growing up. But it shows you that innovation can happen anywhere. They have not moved their R&D team and their software development team to the U.S. because the talent here is sticky, it’s loyal, they’re smart and they get stuff done.

[00:09:40]

Ticky Fullerton:

But that is so important I think that they haven’t moved because, as you say, it’s going global. It’s owned by you guys though. It’s going global but it hasn’t moved, it’s stayed here. 

[00:09:52]

Geoff Culbert:

So now we will take… we will invest in them and we will scale their stuff globally, right. We can give them the investment to take it global. But we are adamant that we’re going to keep the R&D and software engineers here because they’re just as good as the talent that sits in Silicon Valley and they’re more loyal. 

[00:10:10]

Ticky Fullerton:

Yeah, and Michael, do you agree with that? I mean do you have similar sentiments?

[00:10:12]

Michael Edwards:

Oh, I can probably tell almost a replica story in fact. And the Boeing company, 100 years old, not 130, 100 years old. But has been here in Australia in its heritage form for nearly 90 years so there’s a long term footprint. It’s actually the largest footprint for the company outside the U.S. here in Australia. 

[Camera zooms in on Michael]

So there’s a real body of business around our Defence interests, out of the commercial manufacturing and so forth. So the research that we’ve been doing here is really primarily about underpinning the competitiveness of the local industry but then experimenting with focused areas and then replicating that anywhere around the world.

[00:10:52]

Ticky Fullerton:

And you actually have been working with U.Q., with Peter’s university, for, what, a decade or…

[00:10:57]

Michael Edwards:

And a number of… definitely U.Q. CSIRO in fact, we’ve been working with for 27 years now. I mean CSIRO’s just turned 100, Boeing’s just turned 100. For more than a quarter of our lives we’ve been working together in research with CSIRO. Ten plus years with U.Q., Q.U.T., R.M.I.T., Swinburne, Deakin around here in Melbourne too. Very strong networks. And that comes with, you know, time, energy, investment but also champions. And just to tell the CSIRO story briefly, I mean the champions that took up the executive focal roles back in the late 90s to form a steering committee, which still exists today, is still very active and energetic today, were really the champions that set the tone then for the buy-in that the two organisations had together to be able to work together for that long period, and still very significantly today. 

[Camera pans out to show the rest of the panel members]

[00:11:56]

Ticky Fullerton:

So Peter, from your point of view, how have you seen business investment in your people? Because of course we have to remember it’s not just, as wonderful as CSIRO is, I’m sure there’s lots of researchers out there who are not CSIRO as well. But where do you see business investment tracking in terms of investing in students, researchers, PhDs?

[Camera zooms in on Peter]

[00:12:18]

Peter Høj:

There’s probably more happening than you think and I do see a positive development. And just to put some stats on it, and this is not an advertorial but the use of the stats I know, last year we signed 1100 research contracts with business out of U.Q., and if you take the material transfer agreements and the C.D.A.s then there’s 2700, so it’s ten a day, a working day that we sign. So it’s a lot.  But what is interesting to us is that we have more industry investment in U.Q. from overseas companies than from Australian companies.

[00:12:55]

Ticky Fullerton:

Why?

[00:12:56]

Peter Høj:

I believe, and I don’t want to offend anybody here, but universities are getting a little bit better at looking out. But I’m not sure all companies are equipped staff wise to be able to look in. And I actually hope that the large cohorts of highly trained graduates we have now, particularly at PhD level, will find employment in companies because once they’re in companies, they’ll be able to spot the opportunities that we can’t even see are relevant for the companies. And if we really want to get the economy firing, that’s what has to happen. 

[Camera continues to move between Ticky and Peter]

[00:13:34]

Ticky Fullerton:

Yeah so this is talking really more about collaboration which we’ll come to in a bigger way. Do you see any passive investment in innovation around the place? Anything from a couple of trillion dollars’ worth of superannuation that’s sitting out there and needs a home?

[00:13:53]

Peter Høj:

We don’t see that so much in Australia. There is a sense… this is my observation that Australian superannuation companies are not really keen to go high risk. But they’re clearly…

[00:14:07]

Ticky Fullerton:

Is that because they don’t understand or because…?

[00:14:10]

Peter Høj:

No I think it’s because the motivation is that they have an obligation not to risk super annuitant’s money. So I think they’re driven by the right sentiment but I think there are ways to get around that and if we get bored we can talk about that a little bit later.

[00:14:25]

Ticky Fullerton:

Oh we won’t make you bored. Well let’s explore this a little bit more because I mean does anybody… please jump in everybody on the panel but…

[00:014:32]

Peter Høj:

OK so I have an idea. 

[Camera continues to move between Tiki and Peter]

[00:14:33]

Ticky Fullerton:

Go for it.

[00:14:34]

Peter Høj:

So I have an idea, many of us at this table, we’ve been fortunate enough in life that we always run into the threshold of how much you can contribute to Super. I would think that you could actually say to somebody like me, ‘Peter, you can put another $25,000 in each year but you must put it into a high risk innovation fund in this particular Super fund. And they will be in the full right to risk it on early stage innovation.’ So I think there are things we can do. 

[Camera zooms in on Geoff]

[00:15:05]

Geoff Culbert:

Can I just jump in because I have a similar idea and I think part of the problem with the Super Funds is they get measured on total returns and they’re worried that if they put some, of that investment into high risk stuff and it doesn’t work out, then they’re going to get dinged for it. I personally, if I was given a choice in my superannuation fund to tick a box which says, are you OK if I invest 2%/3% of your Super into high risk start-up companies, I would tick that box all day long. Then the Super super companies aren’t measured on that but they’re measured on everything else. There may be a path… so the whole thing is between Peter and I, we’ve just raised two different ideas for how you could potentially unlock the $3 trillion that sits in superannuation. I just think it requires a little bit of creative imaginative thinking and collaboration with the industry.

[Camera pans out to show the rest of the panel members]

[00:15:52]

Ticky Fullerton:

And isn’t now the time? Because we’re in a situation where frankly to get good returns at the moment, on anything, certainly on the bond side’s a disaster, even on the equity side, people are… they don’t understand risk anymore. They’re putting in a lot of money for low returns, a lot of which is quite high risk. Why not put some of your money in something which is high risk/high return that you know will be high risk/high return?

[Camera zooms in on Larry]

[00:16:18]

Larry Marshall:

Sorry Ticky, don’t want to derail this part of the conversation but just as a former player in that space, just to give a little credit to the Australian Superannuation industry, they actually do invest in venture, they just don’t do it domestically. But even the Future Fund, because I had breakfast with Peter Costello years ago to talk about venture and it was just a waste of time. But two years after that breakfast, they started investing in U.S. venture, they invested in the top six U.S. venture firms, they put $60 million to $80 million each into those firms. 

[00:16:48]

Ticky Fullerton:

But that was because there was a little law in America that encourages them to do so isn’t it?

[Camera continues to move between Larry and Ticky]

[00:16:51]

Larry Marshall:

No, not at all. In fact generally U.S.V.C.s don’t want Australian healthy money, they can get plenty of money, money’s not their problem, investible deals is their challenge. But during the Global Financial Crisis and after that, there was a window of opportunity for some Australian L.P.s to jump in to U.S. venture, and they did. And if you saw the returns from the Future Fund and their venture portfolio, they were unbelievable in this last year. 

[00:17:17]

Ticky Fullerton:

So what is stopping them from investing in Australia?

[00:17:20]

Larry Marshall:

We don’t have much of a venture capital industry here in Australia, and we have this fundamental gap between the nearly $10 billion that goes in the front end of the system to fund science and the $2 trillion kind of at the other end, but there really isn’t much in the middle. Despite all of the news about new funds, there’s probably about $300 million, $297 million last year of actual venture money and most of that doesn’t go into science based innovation, it goes into internet or replication of successful U.S. business models and translation of them to Australia. 

[Camera pans out to show the rest of the panel members]

[00:17:58]

Ticky Fullerton:

Alan.

[Camera zooms in on Alan]

[00:17:59]

Alan Finkel:

So one thing I would say is success breeds success and so we’re starting to see a change, just in the last few months we’ve seen three venture capital funds get up that have at least some of their money coming from superannuation investors, that’s Blackbird, Aintree and Square Peg, to the point that the A.F.R. is now writing articles saying, ‘oh my gosh there’s too much venture capital funding around and there are not enough investible deals.’ Success breeds success. Super Funds are in a difficult position. I mean their primary responsibilities are fiducial responsibility to protect peoples’ money. If you make it voluntary, that’s terrific. But things are changing.  Historically Australian venture capital funds didn’t return well. If you look at the I.I.F.s, they were pretty flat. 

[00:18:47]

Larry Marshall:

Except for the first one, Bill Ferris’s one was…

[Camera pans out to show the rest of the panel members]

[00:18:47]

Alan Finkel:

Bill Ferris’s did very, very well. But overall they were a bit flat and so the Super Funds were quite rightly cautious.  But they’re seeing a change. 

[00:18:59]

Ticky Fullerton:

And what about the Future Fund itself? 

[00:19:02]

Alan Finkel:

They’ve got a huge fiduciary…

[00:19:03]

Ticky Fullerton:

I mean shouldn’t it be investing in our future?  Isn’t that what we’re talking about?

[Camera zooms in on Larry]

[00:19:07]

Larry Marshall:

No, so… that’s what I thought too but it isn’t named for that reason and their fiduciary responsibility is to protect the Public Service’s Pension Funds. But the returns they’ve got in the top 6 U.S. venture funds have been great.  Alan’s mostly right, the returns haven’t been stellar. They’ve been better, I think, than people realise but they haven’t been tier one U.S. venture. And as a Fund Manager their job is to maximise the financial return, not advance Australia’s agenda. They’re motivated differently. One of the reasons that we created the CSIRO Innovation Fund and will credit the Medical Translation Fund was that is a national agenda based mission. Science in this country is seen as uninvestible, too risky. Things that we spend out of Stanford as entrepreneurs, which were literally science off the lab bench, raw and unproductised, there’s a whole vibrant ecosystem that’s around Stanford that’s willing to jump in and take risk. We don’t have that here. We need to develop that here.

[00:20:06]

Ticky Fullerton:

But what is going to change that?  Peter, do you want to jump in?

[Camera zooms in on Peter]

[00:20:11]

Peter Høj:

I just wanted to jump in because I do think that there is a notion that Australian science is not investible. And I just want to give you an example, we had a Spinard company that was running out of funds and we had to raise $42 million. This is only two years ago. And we managed to raise $2 million from Australia from U.Q. into our own company and Canadian partners, Novo and Nordic, put $20 million in each and one year later Novartis bought it for $1 billion. So they walked away and Novartis has just, one week ago, done a series of fundraising with us for $22 million. 

[00:20:55]

Ticky Fullerton:

That’s the Infazone thing?

[00:20:56]

Peter Høj:

Yeah, Infazone. So what is happening there is, and we get repeat business from overseas investors who can see the quality and investibility of Australian science and I would’ve wanted that money to stay in Australia because then it would’ve reinvested. So I do think we have a sell job because there are things happening, there are movement at the stations and I mean Alan is a fantastic advocate for that. But we’ve got to tell these stories all the time because otherwise people never hear them. 

[Camera zooms in on Michael]

[00:21:26]

Michael Edwards:

Maybe if I can jump in there. There’s another dimension to this and the venture capital world and spin-off world is not my world but some of the fundamental science that was done right here in Australia that created the type of composite systems that are now the basis of the manufacturing out at Fishermans Bend formed a $5 billion export contract for the country on 787 trailing edge over 20 years. And that’s home grown technology developed, matured, qualified, and then ultimately now commercialised by way of a multi-decadal multibillion dollar export contract. So there’s different ways to think about it too in terms of whether…

[Camera pans out to show the rest of the panel members]

[00:22:11]

Ticky Fullerton:

And what about the whole… if you got a sort of soup… I’ve just been in Cambridge, England and couldn’t believe the excitement there. They’re all calling themselves the alternative Silicon Valley, AstraZeneca’s put their global headquarter there, they’ve got their university, they’re this great big hub that they… and they’re puffing their chest out now and everybody’s got really excited about it. 

[00:22:33]

Michael Edwards:

Yeah, catapult Centres, yeah. 

[00:22:34]

Ticky Fullerton:

Yeah. I’m just wondering whether, you know, if you create a hub and, you know around the… I mean Lynette, what do you think of hubs?

[00:22:45]

Lynette Clunies-Ross:

Well I like the term ecosystem and Larry spoke to this ecosystem that surrounds Stanford and I think it’s the development of that ecosystem that we need. 

[00:22:57]

Ticky Fullerton:

Where would you put it?

[Camera zooms in on Lynette]

[00:23:00]

Lynette Clunies-Ross:

I wouldn’t know where to put it. I mean there are… there’s a lot of literature around geographical clustering as an example, and a lot of good theory about co-location but I think it does come to critical mass, it does come to bringing likeminded people together and mobilising people around a shared vision and a shared problem. I like, to quote David Thodey, he defined collaboration as having a shared problem, a shared ambition, shared targets and a complementarity… it’s a big word… of skills. And I think that’s what we mean by collaboration in this context, it isn’t just about… it is about partnerships but it’s more about having a shared goal and I think there isn’t one cluster that we’re going to have, there are many clusters that we can have around Australia that bring out the uniqueness of a problem.

[Camera zooms in on Lynette]

[00:24:03]

Ticky Fullerton:

Is that going to attract the investment, or are we going to have a, you know Melbourne/Sydney, no well let’s build Canberra, type problem? Are we big enough in Australia to…?

[Camera zooms in on Geoff]

[00:24:14]

Geoff Culbert:

It’s going to unlock ideas Ticky and I think that’s a really important thing. I just think that when you get really smart people who are likeminded and are trying to get something done together, it’s amazing how often you come up with ideas and I would back Australia in as a country to be able to turn those ideas into something real. So we’ve just opened a centre in Redfern in Sydney, which we’re calling the Generator because it’s got like G.E., generator of ideas, and we’ve wedged between Data 61 and the University of Sydney. And I’m not sure whether this thing is going to work but I felt like as a leader of my company down here I had a responsibility to do something. Just do something to bring people together rather than just talk about it. And the first thing we’re going to do is we’re going to invite university students to come in and work on real problems and they’re going to get course credits for it. And if we can get Data 61 or CSIRO to come in, all the better. And it’s just about getting a group of people from research institutes, universities, the private sector, to be sitting in a room together trying to solve problems that we think will deliver value. And you start those conversations and I think it can lead somewhere. 

[00:25:33]

Ticky Fullerton:

And do you think that government… it was a very impassioned speech by the Minister there, do you think government is doing enough in this direction? I know after Rio you made the comment I think about the difference between the amount we spent on sport as compared with what we spend and where we are in the innovation index.

[00:25:57]

Geoff Culbert:

I thought that conversation post the Olympics was kind of comical because everyone was… everyone was kind of like wringing their hands about the fact that we finished 10^th on the medal tally and, you know, why didn’t we finish 5^th.  And I just thought, you know, the notion that we finished 5^th was incredible, 25 million people, we finished 5^th on the medal tally. And it wasn’t just because we put investment into it, it was because people prioritised it. People prioritise sport in this country and they get their kids personal coaching and tutoring in soccer from the age of five and my comment is if we as a country bring the same amount of passion for science and technology…

[00:26:36]

Ticky Fullerton:

And personal tutoring.

[00:26:37]

Geoff Culbert:

… in math rather than other things, we could really, really do something incredible. But I’m a huge believer in our capability. I just think we got to get everyone together. And, look, the government can’t solve it by themselves.  And we can’t look to the government to fix this or to create an innovation culture, they have a role to play but we also have to just get off our butts and do something ourselves. 

[Camera zooms in on Larry]

[00:27:03]

Larry Marshall:

Can I just add something to what Geoff said, because right at the start… all that was visionary but right at the start did you notice what he said? I don’t know if this is going to work but I’m going to do it anyway. I mean that’s the spirit of innovation. I mean we do tend to have a bit of a chip on our shoulder about failure and fear of failure here, but more leadership like that and we’d see a lot more profound breakthrough innovation. 

[Camera zooms in on Alan]

[00:27:29]

Alan Finkel:

So as I listen to the conversation I hear some fantastic case studies of excellent collaboration with U.Q., Boeing, G.E., CSIRO’s got a huge number going. But there’s also a thread of what aren’t we doing and why are we missing out? And I think we just have to focus more on what we’re doing well and build on that rather than look for these imaginary gaps. So you talked about Cambridge, Cambridge is doing an extraordinary job in England of building a precinct around themselves. Well downtown Melbourne in the Parkville District now with Bow 21, the University of Melbourne and Monash University, and others, they’ve just put together an $80 million fund for commercialising pharmaceutical and medicinal discoveries. And big international companies are investing in it, Servier and Glaxo, they see the value. And we need to recognise that and say, ‘what are we doing right?’ And do more of it rather than keep looking for what we’re not doing. So…

[00:28:31]

Ticky Fullerton:

What about the difference…?

[00:28:32]

Alan Finkel:

Let me finish another point. We have a fantastic record now that just became crystallised in the last few weeks of 25 years in a row without a recession. There’s no other country in our position and yet we keep saying to ourselves, ‘what’s wrong with us?’ Instead of saying, ‘what’s right with us?’ And as I said in my opening remarks, so much of what we do that is fantastic, is invisible as conventional high tech. You know the mining industry is staggering in terms of what they do. You go to the Rio Tinto control centre and you walk in… in Perth, and that’s where they’re controlling their Pilbara operations. And I went there with my wife about two months ago and I walk in there and I think, NASA eat your heart out. This place is fantastic. It’s 200 metres long and television screen… you know monitors all over the place and they are controlling the world’s largest private railroad, 3000 kilometres away. 

[Camera pans out to show the rest of the panel members]

[00:29:32]

Ticky Fullerton:

I do think mining is one area… I know government’s got, what, six different areas that they’re looking at innovation, mining is probably going to be the lead area.

[00:29:45]

Alan Finkel:

It should be but most people think about mining is digging dirt out of the ground and they think of it as low tech because the product is just dirt, or iron ore. 

[Camera zooms in on Alan]

But getting it out economically and shipping it in volume with minimum impact on the environment safely and economically is a staggeringly difficult challenge. And the trouble is none of the international metrics from the O.E.C.D. or the World Bank or the Global Innovation Index, none of them value that embodied technology in the $90 billion worth of exported minerals. But if they could look at embodied technology in the same way as we look at embodied carbon dioxide when you make an electric car, everybody’s got that in their mind, they understand the concept of embodied emissions during manufacturing, but they don’t get it that that dirt as embodied innovation. 

[Camera pans out to show the rest of the panel members]

[00:30:38]

Ticky Fullerton:

Can I move to a different, staggeringly difficult challenge, which is research industry collaboration, which a lot of people I’m sure talk about and are frustrated by. If we look at it, again the latest stats I’ve got, the U.S… in terms of how research is commercialised, the U.S. 70%, the U.K. 40%, Australian 4%, below Mexico apparently. Why are we no good at this? Does anybody want to jump in?  Peter or Michael?

[Camera zooms in on Peter]

[00:31:08]

Peter Høj:

Well I will just repeat what I said before, I think there is much more happening now than we’re given credit for.  However, I do believe that there has not been a tradition of Australian business and industry to educate PhD educated people in that workforce. And I do believe that if you look at economies like in the Nordic countries, in Germany, in the U.S. as well, you’ll probably find that only 30% of the PhDs stay inside academia or government research labs, and the rest go out and work in the economies. So they do their own innovation where they’re actually able to understand what happens inside the universities and spot an opportunity that traditional academics can’t see and suggest to the academics, you know, we think you can use this for something, rather than the academic saying, ‘I’ve done something really great, now I just need to find a problem for it.’ And that’s what we have to do.

[Camera zooms in on Ticky]

[00:32:11]

Ticky Fullerton:

Well on that front, Peter, what about… I mean a lot of people in this room possibly waiting for the research grants to come out, they’re all just about to be dished out I think, or some of them. Now does that, the way those research grants are allocated need to be completely rethought in terms of whether industry and researchers are working towards similar goals?

[Camera pans out to show the rest of the panel members]

[00:32:42]

Peter Høj:

OK, I will say… can I say one more thing and then I’ll try to pull…

[00:32:46]

Michael Edwards:

I’d like to make a comment after you.

[00:32:47]

Peter Høj:

You do it first. 

[00:32:49]

Michael Edwards:

Do they need to be rethought?  I think one of the things that has been rethought and is a good thing and makes a difference for us is linkage grants. 

[Camera zooms in on Michael]

And we do… and find those very attractive and a great opportunity to then get funding from three different sources for a common problem, both the A.R.C., or the A.R.C. funding, university funding and the industry funding, it makes it very attractive as part of that longer term investment. But linkage grants are always a relatively longer horizon activity. But for those of my former CSIRO colleagues in the room that will remember Jim Peacock, the good thing about linkage grants that… and a predecessor of Alan’s… the Jim Peacock theory, the solar system theory where you can actually really revolve around an expert and a professor in some particular area and we try to do this very actively where we seek out and build relationships with professors in their particular area of expertise and then you can start to have revolving around that sun the sort of solar system of post-docs, PhDs, and you start to get… and particularly in our area of aerospace, which is usually a pretty interesting space for them to work in, you start to get a real ecosystem around a particular area of expertise. That grows on itself, we can build upon that. But that’s some of the longer term horizon stuff. We’re also working and try to be very focused and not to try to do everything. So one of the peculiarities of Boeing Australia’s story is that where we’re investing down here in our technology development, it’s quite discreet and a small number of them, and we try to stay critical mass around those, to become the go-to group for the Boeing company in the investment round here. We’re not trying to do everything. In fact we’ll deliberately import some technologies that we could do here, but we haven’t got a critical mass around them. And when we start to build around that critical mass, not only are we investing internally but we’re investing with the universities, with CSIRO in areas of expertise, what we can grow there, expertise as well that success builds success as Alan mentioned before. And we then invest in things like PhDs in those areas where we can start to grow.

[Camera pans out to show the rest of the panel members]

[00:35:01]

Ticky Fullerton:

OK, would you like to pick up on that?

[Camera zooms in on Lynette]

[00:35:03]

Lynette Clunies-Ross:

Yeah, I’m just been thinking about this research industry collaboration and maybe just to speak about S.A.S. experience and working with academia in particular. Because that’s again a heritage of ours and maybe that it is a sort of poster child S.A.S. in terms of having commercialised from a university context and having a founder who’s still very much an applied statistician. So a lot of the source of our R&D comes from our customers in terms of solving really problems. In fact the genesis of our high performance analytics product three years ago was a bank with a problem to solve.

[00:35:45]

Ticky Fullerton:

So that’s one of the big issues, so going back to the customer as you move?

[00:35:49]

Lynette Clunies-Ross:

So going back to the customer, and so the closer that we can bring research to the customer and I can see that we can be a bridge in that, and very simple examples, a very micro example is that we’ve been collaborating with universities, we help them embed S.A.S. analytics curriculum into their undergraduate and postgraduate degrees so that they produce job ready graduates because that fills the analytics professional pipeline that helps us grow our industry and helps our customers with skills. But more recently, I mean I’m sensing that’… maybe it’s an anticipation of some change to the metrics, I’m not sure but I’m certainly getting a sense that universities are coming to us to move into that how do we move closer from research into applied research? And we’re bringing our teams together in the near future around this topic. Because we commissioned a piece of research from this particular university about 18 months ago. They’ve come out with the results. We gave them a research problem around help us understand why our customers are not getting the return out of, a return on investment from their investment in analytics. And so that’s a great mobilising piece of research for our teams to come together around how they can help us move that research forward and how we, with our advisory teams, can apply that in a customer situation. 

[Camera pans out to show the rest of the panel members]

[00:37:13]

Ticky Fullerton:

OK, so it seems to me that we’ve got three businesses here, all are doing excellent work with their collaborative efforts. However, some of the questions coming at us thick and fast are this is a problem and questions like the one I’ve just asked about the remodelling of funding, equally is the C.R.C. model really the right way to go? I mean I was on the Board of a C.R.C. for seven years and I can tell you my answer would be no, because the bottom line was that there was never enough cash and all the games were played, CSIRO and the universities and research was sort of offered in kind, which was already channelling in one direction, thank you very much, and the tiny bit of cash that was there got sucked up, industry got ticked off and there wasn’t much industry there anyway. This was on irrigation futures. And I think it’s finished long enough ago for me to say this sort of stuff. But there was, not to say we didn’t do some very good work but there was enormous tension there to actually deliver that good work.  So is the C.R.C. model worth it?

[Camera zooms in on Alan]

[00:38:26]

Alan Finkel:

There have been some fantastic successes in areas you might not think of. There’s the C.R.C. for capital markets which has sold software to exchanges all round the world and has redefined the ability of exchanges to identify fraudulent transactions, and that would never have come out of a university by itself. It was a very commercially focused C.R.C. and it’s been tremendously successful. You asked about the grant model, you know where does that stand? If you’re thinking about competitive grants for universities and then medical research institutes, the biggest problem we have is, besides the funds perhaps not being sufficient, is that the granting system follows siloed fields of research and it makes it very difficult through pure competitive grant funding to get up a project such as a prosthetic, you know an exoskeleton or a bionic eye which requires expertise from, like a bionic eye from neuroscience, the psychology, the industrial design, electronic software, et cetera, et cetera. But that’s where entities like the CSIRO and the C.R.C.s come into it. The CSIRO has… Larry, you’ve got a luxury, you’ve got budget that you can, to some extent, allocate to do long term or broad research, depending on what the interests are in a way that universities can’t. And so I see a lot of complementarity going forward between what universities do and how the CSIRO can work with the university, use your budget capability to bring together technologies from different disciplines, from different universities, to make fantastic things that markets want.

[Camera pans out to show the rest of the panel members]

[00:40:20]

Larry Marshall:

We’ve contributed to… sorry, we’ve contributed to 139 of 200 C.R.C.s and I guess two of the latest six that got funded. It’s a lot of exposure to C.R.C.s. I think we’re a little bit dancing around the issue though. And what I mean by that, there’s a gap between science, universities, CSIRO, the research community and Australian business. And if you compare to the U.S., 21% of the U.S. G.D.P. comes from venture back innovation start-ups, 21%. According to Stanford and then separately to Harvard, about 100% of the job growth in the last forty years has come from those companies, that cohort. According to the Australian Venture Capital Association, less than 0.1% of Australian G.D.P., apples to apples to their comparison, comes from that source. So imagine if we did generate 21% of our G.D.P. from innovation, say from the nearly $10 billion that we invest into science, that’d be a wonderful thing if we could close that gap. It’s not the fault of universities or the CSIRO or the P.F.R.A.s and it’s not the fault of Australian business, it’s just that Australian business hasn’t benefited from that type of innovation, the science based innovation in the same way that U.S. business has. Now we have a couple of visionary U.S. companies here that invest on a much longer timescale than most companies do, and that’s really well aligned to science. Because science takes sometimes a decade or more to cook.

[00:41:53]

Ticky Fullerton:

But these are businesses that know what they... vaguely what they want to research. 

[00:41:58]

Larry Marshall:

Because they’ve felt the benefit of innovation somewhere else.

[00:42:00]

Ticky Fullerton:

So how does the knowledge exchange go the other way? In other words, if you are a scientist either working in a university or indeed in CSIRO and you’ve got a great idea, how do you physically go find and then convince somebody with a bucket of money to help you?

[00:42:20]

Larry Marshall:

Well this is going to be a shameless plug for the CSIRO ON program, but one of the most transformational things that we’ve done since I’ve been running CSIRO is this process of teaching scientists how to engage customers, how to actually put the customer first and understand the customer using the same disciplines and treating customer interaction as an experiment, the same disciplines that they use that serve them so well in science. 

[00:42:45]

Ticky Fullerton:

So find your market?

[00:42:47]

Larry Marshall:

Well understand the problem. What problem are you really trying to solve? And customer can really tell the real problem. They can tell you the one that’s staring them in the face. But it usually takes someone from coming from outside with a bigger vision of technology or science to kind of see the future, to see what could be created.

[Camera zooms in on Ticky]

[00:43:07]

Ticky Fullerton:

A couple of questions that we had from the audience about why isn’t there more of a role for the middle man, the tech broker, to operate between the scientists and business? Why aren’t we facilitating that?

[Camera pans out to show the rest of the panel members]

[00:43:25]

Larry Marshall:

So the internet exists, apart from D.A.R.P.A.’s contribution and Dan Quayle… sorry… because of two professors from Stanford who were working on an esoteric piece of technology that ultimately became the Cisco Router. Two uninvestible professors by the way, husband and wife. Fundamental rule in investment is never invest in husband and wife unless it’s Cisco. The internet wouldn’t exist without that profound innovation spawned by the way out of left field. So that’s another thing, you can nudge science, you can encourage science to go explore in areas where you think might be really commercially interesting or interesting to solve a national challenge. But you’ve also got to kind of let scientists follow their instincts because otherwise you miss the profound, the big breakthroughs.  Things like Wi-Fi didn’t happen because CSIRO was trying to invent Wi-Fi, it happened because we were trying to solve a communications problem.

[00:44:21]

Ticky Fullerton:

I thought you’d been captured by the CSIRO Larry, Stockholm syndrome. No, very good, yeah. 

[Camera zooms in on Alan]

[00:44:29]

Alan Finkel:

One of the things that is happening right now… first of all there’s a hugely elevated awareness amongst university academics of the need to reach out and engage and it’s been encouraged by, firstly, the results of the Watt Review into university funding which has said that the formula for block grant funding has to take into account the success that universities have had in attracting industry funding. So we’ll reward those universities that are doing active work with companies, and that encourages more of that. But at the same time the A.R.C. has been tasked with developing a new metric for impact and engagement. And they’re not going to do that to the exclusion of other things. So as Larry was saying, you can’t just focus on one and lose that blue sky research. So the A.R.C. already has a metric, which is very effective, called the E.R.A. which measures the excellence of Australian research. And the last thing you’d want to do is get rid of that, that is truly motivated universities from the Vice-Chancellor down to the coalface researcher to sharpen their research capability into meaningful areas and do it really well. As we try to get them to look at reaching out and engaging with industry, we don’t want to lose that research quality. So the A.R.C. has got to play a nuancing game to maintain the focus on conventional research quality and encourage engagement. And I’m part of the Steering Committee that’s been led by Aidan Byrne on doing that. And I think they’ve got the right systems being evolved and that will help the reach out. The issue that was talked about a moment ago though is the reach in, how do you encourage companies to recognise the value of what Australian institutional research can offer? And there are a lot of discussions about can you incentivise that through the R&D tax incentive? That could be one way through encouraging PhD placements or collaborative research. But there are other programs…

[00:46:41]

Ticky Fullerton:

So you could actually bend the R&D incentive a bit?

[00:46:45]

Alan Finkel:

Well you could, you could. I mean, you know, decisions haven’t been made but there is a lot of discussion around on doing that. There are programs overseas that have been actively considered for Australia. There’s a French program that’s been running since 1983 under which 10% of all PhDs are actually placed as full-time employees in companies but supervised through the university with all the full academic requirements on those PhDs. And we can’t do that in Australia for two reasons, the regulations don’t allow it and the funding’s not there. But again there’s discussion of this kind of thing. There are moves in the right direction to get the balance between fundamental research and reach out engagement for academic researchers at the… well not through the CSIRO because you’re already doing that, but at universities and M.R.I.s.

[00:47:39]

Ticky Fullerton:

Well we’ve heard, Larry and Alan, perhaps… I was going to say Peter, but yes, Lynette you go first.

[Camera zooms in on Lynette]

[00:47:45]

Lynette Clunies-Ross:

No, I was thinking back to your term tech broker, middleman and I was cringing because I thought the idea of some middleman having to translate for a scientist to take their idea forward I was…

[Camera pans out to show the rest of the panel members]

[00:48:01]

Ticky Fullerton:

I was thinking more an angel, an angel middleman like in Israel, you know there seem to be a lot of those.

[Camera zooms in on Lynette]

[00:48:07]

Lynette Clunies-Ross:

I thought about it in the context of a bit of skills gap actually and I say that in the context of the scientists that we work with in S.A.S. are data scientists. And some of them are really… I’m going to call them hard-core statisticians and then there are others that can bridge the divide between the maths and the programming and business. And in fact I was at Melbourne Business School just recently and they talked about a trilinguist, which is that maths, programming and business acumen. But it isn’t just one individual, it takes a team, it takes a multidisciplinary team and, again, I come back to this ecosystem, is to build the right people around our best scientists, and they’re not suddenly going to turn into commercial entrepreneurs tomorrow. Some of them can and will and do, but not all of them will and want to. But if we can sort of bring those skills to bear… I mean I just think that there are a lot of scientists out there who become excellent data scientists. And by the way, we’ve got a big shortage of data scientists around the world and they inherently get the data and analytics. So…

[00:49:28]

Ticky Fullerton:

Peter, can I possibly ask you your views on the A.R.C. and whether you feel it should change as a model? And indeed, whether those sorts of organisations need to be thinking about taking more risks?

[Camera zooms in on Peter]

[00:49:42]

Peter Høj:

So I could probably name the first 20 companies in the world who have a research budget in excess of US$6 billion per annum. The A.R.C.’s budget is 10% of that. So if we believe that we can run an innovative country on a tenth of what a company feels is necessary to keep their shareholders happy, we’re dreaming. So for what the A.R.C. has, I think it’s doing a fantastic job, particularly after I left.  And the one thing I will say, Ticky, we have to be really careful about here is that if there is no absolute leading it fundamental research capability in whatever discipline we are after, eventually industry will walk away from you. I was very proud at U.Q. when we managed to… we’re a big university, we think we’re good at everything… we managed to say to our researchers, ‘we’re only good at 30 research areas.’ My colleagues thought it was 70 but we got it down to 30. And one of my good friends, David Knox who used to run Santos, he was on our Industry Advisory Board, and he said, ‘Peter, you’ve got to get it down to three because if I have to go to your area number 12, I know I have to go to another institution.’ So you got to have… if industry’s going to be interested in and you’ve got to be able to tell them, ‘we are leading in this particular field and that’s why you will win when you go with us.’ And if you don’t have an A.R.C. who actually… and a M.R.C. who keep some of that absolute leading edge thing alive, the cupboard will be bare after ten years and industry will flight to another country.

[Camera pans out to show the rest of the panel members]

[00:51:28]

Ticky Fullerton:

Alan, can I just ask you one, I was reading about the Monash research that Scott O’Neill was doing, the Wolbachia, bacteria I think it is, in mozzies to counter dengue and zika and things. And it seems to be the most amazing work and he was less concerned about, that the lack of Australian investment, enthusiasm with the dollar and more frustrated it seemed to me about this was such a big deal if they could make it work and yet there seems to be no ability to really get the message out. Internationally in particular. 

[00:52:07]

Peter Høj:

He got a lot of our A.R.C. funding when he started up.

[Camera zooms in on Alan]

[00:52:11]

Alan Finkel:

So the program you’re talking about that Scott O’Neill has been running on eliminating dengue fever, it’s been going for a number of years and it’s mostly funded from international sources such as World Health Organisation, particularly the Gates Foundation. And I come across people who say, ‘that’s terrible, why isn’t Australia funding it?’ I look at it and I say, ‘it’s fantastic that these international sources are funding it, it’s an international problem, the expertise is here.’ You don’t look like Larry. The expertise is here and we should be celebrating that. But the story should be told here even if the funding’s coming from overseas.

[00:52:54]

Ticky Fullerton:

Yeah, and the marketing of it doesn’t seem to be getting out there.

[00:52:56]

Alan Finkel:

Right, and there’s skilled workforces here. One of the things that we forget is, you know, what underpins innovation, it’s… yes it’s money… I talked about financial capital… that human capital, we do it really well. The Australian education system gets criticised all the time but it’s actually very, very good. I mean you look around all the people who are successful at the CSIRO today and universities, they went, most of them went through the Australian education system. And it’s a success story that we should be celebrating, but we’re criticising all the time. I ran a company in America and for many, many years employed engineers and scientists in a relatively high tech company, and then came back and multiplexed my time between keeping a branch of that company going here and the bulk of it going over there, and I employed a lot of engineers here. And they were every bit as good as the counterparts in America. And they worked hard and they enjoyed what they were doing. And yet if you went and asked people how do American engineers compare to Australian engineers, the average person who didn’t know them both would probably say, ‘oh American engineers for sure. They have to be better.’ Our workforce is fantastic. I had the pleasure, from time to time, working with people from C.S.L. and C.S.L. is absolutely committed to keeping its R&D here in Australia even though the bulk of its sales and its manufacturing are overseas because of the extraordinary workforce in the Parkville Precinct that it’s working with all the time. Workforce and collaboration between the universities and the Parkville Precinct and C.S.L.

[Camera zooms in on Ticky]

[00:54:33]

Ticky Fullerton:

So what does this call for in order for us… we seem to be talking about the need for a critical mass which, because that then sort of attracts… we’ve got these sort of six areas which we’re focusing. Defence isn’t one of them.  Government’s just put $50 billion over how many years, can’t remember how many decades, but a lot of money in one particular place. Maybe I could ask both Michael, Geoff, what do you think about that? I mean I know your competitor, Lockheed is very excited about it. But presumably that will build a new research opportunity. 

[Camera zooms in on Michael]

[00:55:13]

Michael Edwards:

Well I’ll make a quick couple of comments but I’m sure Geoff can too. Whether it’s not named as one of the priorities, it obviously is one of the ongoing and enduring priorities of investment. And, you know, to be frank, from a Boeing point of view, this is certainly one of the more attractive markets for us. We are already very well embedded within it and we’re going to continue to try and grow that from the Australian base. Boeing Defence Australia is the largest defence group outside the U.S. anywhere for Boeing and it has grown very significantly over the last few years, very successfully. 

[00:55:46]

Ticky Fullerton:

Geoff.

[Camera zooms in on Geoff]

[00:55:48]

Geoff Culbert:

Well I agree and G.E.’s engines are on the Hornets and the Super Hornets. They’re flown by the Australian Military, something we’re extremely proud of to have a long association with the Australian military and there is a lot of investment in there. I do like the idea though, I think the conversation’s changed, Ticky, and I think that we are now talking about the right stuff. I think that when we first started talking about innovation, to go back to your very first question, it was the conversation’s certainly out there and the street was about the consumer app world and we weren’t focusing enough on the areas and the industries where we have significant investment where we have global competitiveness and where a very small increase in productivity or efficiency can drive real wealth for the Australian economy. So $1 increase in the price of iron ore is worth about $250 million of revenue to the Australian government. So you think about that in terms of increasing productivity…

[00:56:50]

Ticky Fullerton:

A year?

[00:56:51]

Geoff Culbert:

Yeah… productivity and efficiency and what that can deliver in terms of wealth and revenue and prosperity for Australia. It just shows you, and Alan was talking about it before, that if we’re focusing on technology, if we’re focusing on innovation in those industries, we get an immediate dividend, a significant dividend that we’ll all benefit from.

[Camera pans out to show the rest of the panel members]

[00:57:13]

Ticky Fullerton:

And so to move on to sort of the last big area that I want to talk about, which is obviously education, STEMM and all that sort of stuff. If I am now going through university thinking about whether I should do a PhD or not in engineering, or something like that, should I be, you know feel more empowered to go and do so, because I mean the jobs are going at the big research organisations? It’s not… you know there’s this sort of pressure from the government down say STEMM, STEMM, STEMM, but where are the opportunities? Does anyone want to pick up on that?

[00:57:51]

Peter Høj:

So I’ll start with that. I think, as I tried to allude before, there is a credential creep all the time. David Murray became C.E.O. of the C.B.A. and I think he left Year 12, did a teller job and then educated himself on the way up. 

[Camera zooms in on Peter]

That is probably no longer possible and society will be smarter and more adaptive if a bigger proportion of the population is more highly educated. So I think you should look at a PhD as something that allows you to be an incredibly valuable employee, not necessarily in the field in which you took the PhD. For others, you use it exactly because you just like nanotubes, or you like social structures. So I just think it’s a more abled population and you should feel free to do a PhD and know that you’ll have a better chance of making a contribution in whatever field. 

[Camera pans out to show the rest of the panel members]

[00:58:52]

Michael Edwards:

You wrote an article on this just recently, Alan.  There’s the…

[Camera zooms in on Lynette]

[00:58:55]

Lynette Clunies-Ross:

But it doesn’t always lead to working in academia, which I think it has that connotation if you’re going to do a PhD that you’re going to be an academic and you’re going to work in a research organisation. But to your point, I think we have to break that and we have to value PhDs in everyday jobs and we’ve hired several PhDs and many of them I wouldn’t even know that they are, and I‘d be wearing a badge saying, Dr Lynette Clunies-Ross if I could, I’d be wearing it proudly. But you know… and they bring amazing research skills with them and they love it because they’re applying it to real world problems too.  And they’re actually seeing it, results.

[Camera pans out to show the rest of the panel members]

[00:59:41]

Ticky Fullerton:

So you’re very passionate, I know, Lynette about STEMM. How do you see… well and indeed women in STEMM which is an even smaller group?

[00:59:52]

Lynette Clunies-Ross:

Yes.

[Camera zooms in on Ticky]

[00:59:52]

Ticky Fullerton:

But how do you see that growing and flourishing?

[Camera zooms in on Lynette]

[00:59:58]

Lynette Clunies-Ross:

Well you’re right, I am passionate about women and STEMM and in fact the reason I’m here today is because I was in a Women in Leadership STEMM, a STEMM leadership summit recently and I certainly felt like a minority in being the T in STEMM, being from a technology background, because there’s not nearly enough women in technology.  But we have many women in maths and science and I see them as a very attractive pool of talent to get into, into analytics and data science for one thing, to help to us with a gap around data science, professionals, chief data officers, chief analytics officers. 

[01:00:40]

Ticky Fullerton:

Why are there are so few women on the tech side? After all there are lots of female actuaries, there are lots of female accountants.

[01:00:45]

Lynette Clunies-Ross:

Well, yeah, I mean I still think it’s quite a young profession relatively speaking. I also think it’s… well it’s certainly a male dominated profession and I think we need to give women better role models. So, again, recently we were in a Women in Data lunch and we had some amazing women in the room and we all called… it was a call to action for all of us to be role models, to just not wait and I think there’s a critical mass now that we’ve got this movement happening and we need to give our girls better role models. And boys for that matter. The other thing we need to do systemically in the schools is to really encourage maths and we’re doing some work in that area as well.

[Camera zooms in on Ticky]

[01:01:23]

Ticky Fullerton:

And you talk about, Peter talks about the importance of the PhD and sticking around for your PhD and maybe going off anywhere, it’ll benefit you whatever you do in life. Still it won’t be the majority of Australians that go and do that. A couple of questions that we had about TAFE, V.E.T., what’s happening for innovation in that sort of space? Anybody want to pick up on that?

[01:01:52]

Elizabeth Eastland:

I actually want to go back to something previously said, I think it’s really important and that is about STEMM education. By the way, Larry asked me to particularly say he’s invited me up here to balance the gender on this table. 

[01:02:02]

Ticky Fullerton:

Fantastic.

[Camera zooms in on the new female that’s joint the other panel members at the table. She is seating in Larry’s place]

[01:02:03]

Elizabeth Eastland:

I appreciate it very much Larry, thank you very much. And I’m a STEMM background; I’m a computer scientist and have had a long career in high tech my whole life. Anyway, so I support your ambitions for Women in STEMM. But actually I want to go back to the question previous to that and that is about all this emphasis on STEMM education.  STEMM graduates will architect our future; I think we have to accept that. I think that’s why women should participate in that future because they need to participate, they need to have a voice, they need to reap the benefits of that as well by the way. There’s a lot of money in big large start-ups that go public. I mean we have to address that as well. But I actually think that what we’re saying about all these STEMM jobs going is missing a really fundamental point which is profound and that is graduates today have to think about creating their own future, they have to think about creating their own business. The average lifetime of a business on the top 500 businesses of Standard & Poor’s is 20 years whereas some 50 years ago it was 80 years. So already, you know Apple is old actually. So when you have a STEMM, when you graduate with a PhD, you can be equally thinking about creating your own endeavour, creating your own future, creating your own… you know you’re going to be an employer, not necessarily an employee and I think that’s really important.

[Camera pans out to show the rest of the panel members]

[01:03:28]

Ticky Fullerton:

And are these STEMM jobs of the future going to drive our productivity? I mean there are people now who say that actually Facebook has done a lot of damage to the productivity of the Western world. Seriously if you look at it in terms of…

[01:03:45]

Geoff Culbert:

I don’t buy into that. 

[01:03:47]

Ticky Fullerton:

You don’t.

[Camera zooms in on Geoff]

[01:03:48]

Geoff Culbert:

I think we that we are creating the jobs. If I look at G.E. as a company, we’ve got 15,000 software engineers in the company globally. That number would’ve been a tenth of that five years. I’ve got 50 software engineers in Australia. I probably had zero two or three years ago. I think we can get caught up around trying to protect the jobs of today when we should be boldly going after creating the jobs of the future. And I think that the human race has always found a way to work it out. If we hadn’t then we would’ve all ridden to here tonight on horses and I’d probably be a blacksmith, right. So we’ve got to just have faith and trust in our ability to work this out and not be afraid of the future, which maybe a little bit unknown but we know is going to happen anyway. 

[Camera zooms in on Ticky]

[01:04:37]

Ticky Fullerton:

And so how is this going to present itself? How are we actually going to get right down to young ages and get this sort of imbued? Because I think this is what a lot of people talk about, getting young people interested in coding. I mean my nine year old goes to free coding at the library. There was a question saying why aren’t we investing more in libraries to change libraries, free access to this sort of stuff.

[Camera zooms in on Geoff]

[01:05:00]

Geoff Culbert:

I personally think you’ve got to make it more interesting. So I’ve got some… my kids are interesting case studies because they spent the first seven or eight years of their life in the American school system. And we came back to Australia and I saw the difference between the systems. And I think one thing the American school system does very well is that they do teach creativity, they do teach entrepreneurialism, they put an emphasis on getting the ideas out as opposed to the rote learning. I think you need to match STEMM education with entrepreneurialism and help kids understand that it actually can be really fun, you can create stuff and it’s not just about the periodic table.

[Camera pans out to show the rest of the panel members]

[01:05:37]

Ticky Fullerton:

And you can teach entrepreneurialism can you?

[01:05:40]

Geoff Culbert:

I certainly think you can, yeah. 

[01:05:41]

Ticky Fullerton:

You can.

[Camera zooms in on the female who took Larry’s place at the table]

[01:05:42]

Elizabeth Eastland:

There was an interesting comment that she was the President of the Women in Engineering Society at University of Sydney and I was there to give an address. And I asked her, ‘why did she like engineering?’ And she said, ‘because she was top at mathematics’ but she said, ‘in engineering there’s no one right answer, that there’s all sorts of different pathways’ and that speaks to that creative potential that exists, particularly in engineering and applied sciences. 

[Camera zooms in on Michael]

[01:06:08]

Michael Edwards:

Can I just pick up on the making it fun? I think absolutely the fundamental thing, in fact, and a real end to end making it fun and if I quickly explain. I mean I’ve had the pleasure of actually throwing paper planes with Grade 2 kids in a primary school with Larry one day and we’re talking about the principle of lift and so forth with Grader two-ers and they love it and making it fun. But anything through that primary school, into high school when they go through their work experience, when we bring them in and we have work experience kids, you know we’re getting them involved in things like the virtual reality work that we do and really getting experience from it. They think it’s cooler than cool. They want to be part of it and they grow further from that.  When graduates come in for us, we tend to give them a full experience, we tend to have them program through. We have the luxury of doing that and we give them the year to be able to learn and grow across the business. And then of course when postgrads, when we’re working with U.Q. and others in PhD scholarships and the like, we really bring them inside our business, we give them a Boeing badge, we get them as part of the team and they’re working on something that really is meaningful to us, and that makes a difference. It really is fun for them.

[Camera pans out to show the rest of the panel members]

[01:07:20]

Ticky Fullerton:

And Chris Pyne’s idea of the mandatory Year 12 science or maths, is that dead, buried and cremated?

[Camera zooms in on Alan]

[01:07:27]

Alan Finkel:

Well a couple of comments. I think making maths mandatory would be probably, or definitely unfair to a lot of kids who just don’t have the interest or the aptitude, and so that’s a stick approach. But a carrot is important. One thing we’ve lost over the years is prerequisites of university which absolutely encourage young people to do maths and if you take away those prerequisites, principals stop encouraging deeply maths in their schools because it’s just not important, it’s known to be hard. So if we could reintroduce prerequisites, give bonus scores to the ATAR system for kids who do advanced maths, I think that would help a lot. But could I just go back to your comment about Facebook and the terrible damage that Facebook has done? Because you know you don’t see it in the even macro-economic numbers, if you go back five or six years when unemployment was quite high in America and certainly in Europe and not that great in Australia, there was huge concern that automation and these highly concentrated high world companies would create permanent disruption to employment. Permanent unemployment effectively forced by technological disruption. But it hasn’t happened. I mean people prognosticating a about this all the time and if you went back to 2011, unemployment in America was just under 10%. Now it’s down to 4.9%. And then people say, ‘oh yes, but it’s the way they measured the statistics.’ But the way they’ve measured it hasn’t changed, and even if you look at the alternative unemployment figures, they do tons and tons of different metrics in America and the one you normally read about is the U3 unemployment statistic, but that doesn’t take into account people… that includes people working part-time. But even if you look at the so--called U6, which eliminates the people who are working part-time, the improvement has been dramatic.  The reduction in unemployment has been dramatic. And that’s driven by companies like Facebook being successful and reinvesting their wealth. Because there’s this constant drive to reinvest, to innovate, to invent and do new things. And so the process has actually been quite productive.

[Camera pans out to show the rest of the panel members]

[01:09:46]

Ticky Fullerton:

And you actually are just... going back to the education for a moment, you actually think… I know you’ve got a vested interest in this, but online education will be very much a thing of the future. I mean in classrooms using tools…

[01:09:57]

Alan Finkel:

No I don’t. No I don’t, so you’re misinterpreting the fact that I believe that technology in classrooms…

[01:09:59]

Ticky Fullerton:

Oh, these double helix lessons I’m talking about…

[01:10:03]

Alan Finkel:

Yeah I know, technology in classrooms is really important but the double helix lessons that are being developed, and it’s just recently gone public, are using technology, they’re being delivered out of the cloud but the whole intention of the kids are in the room with the teacher and the teacher is interacting. Whereas if you just use the term online it normally means working solo, like on a M.O.O.C., or something like that. 

[Camera zooms in on Alan]

So using technology wisely is probably the biggest challenge that teachers have. They get technology thrown at them and they don’t know how to use it effectively.

[Camera pans out to show the rest of the panel members]

[01:10:39]

Ticky Fullerton:

I’m just going to throw a couple of… if anybody wants to make… we’re going to wind up in the next few minutes but anybody wants to make a couple of sort of key comments that they don’t feel have sort of sprung out before but I would just like to ask Alan about his national research infrastructure roadmap and what on earth that means for us all. Because presumably it… is it going to be like the research equivalent of the N.B.N.? I mean what is it?

[Camera zooms in on Alan]

[01:11:02]

Alan Finkel:

So the phrase national, or the research infrastructure, in this room probably most people would recognise it for what it is but when I’m talking outside of the scientific circle, no-one has a clue what I’m talking about. So I’ve invented a new acronym Ticky, I call it… in honour of my dog, I have a dog named Bessie, so I’m now referring to it as the Bessie project and it’s Big Expensive Scientific Instruments, so B.E.S.I. So research infrastructure is just the underpinning equipment, networks, computers, expert personnel that enable us to do good science. And the premise for why we’re doing this roadmap, and I’ve been asked by the government to lead a road mapping process for the next ten years’ worth of investment… the premise is Australia needs good science to feed the pipeline of innovation. And good science depends on good equipment. And if you define equipment broadly as being networks, expert personnel, physical equipment, computers and data, then that becomes research infrastructure.  It’s critically import and Australia’s done it very, very well in the last ten years. We have a system called N.C.R.I.S., the National Collaborative Research Infrastructure Strategy, and several billion dollars have been invested by Federal and State governments and it has served Australia superbly well and contributed to the very successful research outputs from universities and CSIRO and the Medical Research Institutes. And it’s part of the reason that our international university rankings have been improving and that, to some extent, underpins our international export market in education. And so what I’m doing is building the foundation for the economy, if you like.

[Camera pans out to show the rest of the panel members]

[01:12:55]

Ticky Fullerton:

OK. Anybody else want to make a final comment or an area that… I did want to ask one about agriculture. I know we’ve talked about a lot of different areas. To me agriculture is the one area where Australia and research and water, climate, soils, food should be leading the way and yet we’re not on the research side as strong, I don’t think, as we could be. Why is that? Is it because the funding is difficult to get? Or do you disagree with my…?

[01:13:33]

Peter Høj:

I would totally dispute that. Australian agricultural research is very strong. I know, certainly my university’s ranked in the Top 20 in the world in agricultural research. CSIRO does a lot.

[01:13:45]

Ticky Fullerton:

Sorry, why is it not getting traction I suppose is really..

[Camera zooms in on Peter]

[01:13:48]

Peter Høj:

Well I think it is getting traction. I think it’s amazing that we can grow wheat where the European said, ‘you’re absolutely mad to grow it.’ I think it’s amazing that we can grow cotton with… Roundup resistant cotton. I think it’s amazing that we have built a wine industry that is globally regarded, probably the most sophisticated wine industry in terms of drip irrigation. I actually think your premise is wrong.

[Camera pans out to show the rest of the panel members]

[01:14:19]

Ticky Fullerton:

OK, good, great. And are the… is the wine industry putting enough into research, for example? Is T.W.E. throwing huge amounts of money?

[Camera zooms in on Peter]

[01:14:29]

Peter Høj:

Yes, I think one of the great successes in Australia is actually the Rural Development Corporations where they have had a very strong ethos of just investing year in and out through the cycles the same amount, matched by the government and then run through a competitive funding scheme. I think they’ve done it very well. I think we have a huge opportunity with cattle and cattle genomics, we’re very, very strong in that in Australia. So Ticky I’m a great admirer of you and your program but I think you got that one wrong. 

[01:14:59]

Ticky Fullerton:

Good to hear.

[Camera pans out to show the rest of the panel members]

[01:15:01]

Alan Finkel:

Can I add to that? I strongly agree with Peter, I think that the innovation, the adoption of technology and the use of that to empower our fantastic agricultural industry has been wonderful. What we don’t have though, Peter, is the equivalent of the METS sector. 

[Camera zooms in on Alan]

So in the mining industry you’ve got the mining equipment, technology and services sector which exists in parallel to the actual mining exports that we create. And we actually have an export industry in the parallel technology.  And we have some of that in the agricultural industry but I don’t think it’s as big as it could be. We’ve got a fantastic agricultural sector, it’s a big market and we do developments that’s used here but we don’t get enough corporate products that can be sold. 

[01:15:50]

Ticky Fullerton:

I’m just reflecting some of the questions… my question was reflecting some of the questions that have come in.

[01:15:51]

Alan Finkel:

Yeah, in venture capital around the… last year there was US$4.6 billion, so about… I don’t know… AUD6 billion invested into Ag Tech companies. And I don’t think that there’s a proportional investment in Australia into these Ag Tech companies. These are companies that are trying to develop that parallel sector of equipment and technology and services. That’s somewhere where we could build.

[Camera pans out to show the rest of the panel members]

[01:16:20]

Ticky Fullerton:

Alright, well anybody like to say last thing at all? Do we think that Alan’s doing a reasonably good job as Chief Scientist? I think we do. 

[01:16:29]

Geoff Culbert:

Yes.

[01:16:31]

Ticky Fullerton:

Anyway, I would like to thank our panel. It was one of the longer sessions that I’ve done and it was a big panel and thank you all very much. I hope you did find it interesting to sit and listen to such an incredible cast of characters here talking it through and for me to have a little bit longer, to go a little bit deeper was really great. So I hope you enjoyed this evening and thank you very much for listening to us. Thank our panel. Thank you very much.

[Applause]