CHECK AGAINST DELIVERY
I’d like to begin by acknowledging the traditional owners of the lands we’re gathered on here today, the Gadigal people of the Eora nation, and pay my respects to their elders, past and present.
I also want to thank Michelle Simmons for that brilliant conversation.
I’ve been privileged to have been part of Michelle’s entrepreneurial journey for a number of years now.
I’ve watched her achieve impressive feats of science as she bends silicon to her will to create a new paradigm in quantum computing right here in Australia.
But I’ve also been frustrated for her – although not because the science is hard, the science should be hard because it truly is new to the world, and powerful.
I’ve been frustrated for her because something is not right in Australia when, as a nation, we make it is easier for a scientist to invent a quantum computer than to create a company from that invention.
Now, I appreciate this room is not full of Michelles – you’re not all scientists trying to become CEOs to commercialise your benchtop research.
In Australia, we do this a lot: we put people in boxes based on their training or expertise. You’re a scientist. You’re a business person. But you can’t be both.
Today I want to challenge that thinking.
You can be a businessperson who harnesses the power of science to give your business an edge in a tough market.
You can be a scientist who understands enough of the business world to create a company or to lead one.
And you can be an investor who sees the untapped opportunity Australia has, to grow our economy and lead globally by making better use of our world-class scientific research.
In fact, not only can you, but in today’s innovation age, you must.
Before I try to convince you all of the power of science in business, let me briefly tell you about how I came to be so convinced.
After all, I grew up in Sydney, I went to a local Sydney high school and I studied physics at Macquarie Uni – so how did I become so sure Australia needs to do things differently?
I was fortunate to spend the final year of my PhD at Stanford University, in the heart of Silicon Valley, where science breakthroughs were being turned into the companies that would power the US economy for decades to come.
After finishing my PhD, I started six science-driven startups before moving into venture.
One of those startups enabled lasers to be used safely in public without eye risk.
Another stopped millions of diabetics going blind.
One enabled telecommunications to connect New York to LA without signal degradation.
Another enabled high-definition video streaming before Netflix but wirelessly.
They each harnessed a benchtop breakthrough to create a real-world benefit for a real-world buyer.
Cumulatively, they created billions in value and thousands of jobs.
But the secret of Silicon Valley isn’t science, it’s market vision.
Each of my startups saw a way to change the future by solving a problem that was thought to be impossible until science solved it.
Market vision is rare in Australia.
So in 2007, I was part of the team that built Southern Cross Ventures, a fund designed to bridge the Australian research sector with the Silicon Valley investment ecosystem using market vision.
About a year after Southern Cross was up and running, we started to hear rumblings of what would become the GFC in 2008.
Southern Cross lost about half of its portfolio, but the startups that survived were the science-driven ones that had set out to do impossible things and their uniqueness saved them.
One of them was called Quantenna. Quantenna was developing the next generation of WiFi that could beam through stone walls, completely eliminating the need for cable in a home or even in a large enterprise.
The excitement around what Quantenna was going to do meant that by the time the GFC hit, it had five funds around the table with a lot of capital and a lot of belief, so we all chipped money in to carry the company through the GFC.
Quantenna became a unicorn and was the first Aussie venture capital-backed deep-tech startup to IPO on NASDAQ.
WiFi was a 20 year old technology when we invested in Quantenna – yes we made it better, but it was the market vision that nailed the right product that got Quantenna deployed across America.
In fact, Quantenna’s connection with WiFi led me back to CSIRO.
I’ve been trying to crack Australia’s innovation dilemma for a long time.
But 9 years ago, I had an epiphany, that CSIRO could become an innovation catalyst for Australia.
So I did something I hadn’t done since graduation – I applied for a job.
I pitched myself to CSIRO’s then Board Chairman Simon McKeon, then the whole board, and they trusted me.
They took a pretty big risk on me; I was definitely not a CEO from central casting to run our national science agency, CSIRO.
Why Australian entrepreneurs need science
Why CSIRO and why solve Australia’s innovation dilemma?
Science adds unique value to raw commodities, creating smart materials for renewable energy, and adding life-saving properties to unique food products.
Science-driven innovation can build layers of resilience into an economy that have so far eluded Australia’s reliance on things we dig or grow out of the ground.
Today, Australia stands at a critical crossroads.
We must solve the challenge of getting to net zero, while maintaining a prosperous Australia where our mineral wealth and generational smarts are protected.
If we don’t innovate, we could lose 40 per cent of our tax base in the energy transition.
If we don’t innovate, we could 40 per cent of our jobs to automation and Artificial Intelligence.
If we don’t innovate, we won’t solve 40 per cent of our hardest to abate emissions.
But science tells us – as it has told us throughout history – that we can invent the answers we need as long as we don’t stop at invention, but go on to turn invention to innovation.
This is Australia’s innovation dilemma.
This month Australians faced their 12th interest rate rise in just over a year, as our economy slows along with the rest of the world.
But science-driven innovation is the cure to inflation because it creates new value that grows the economy, not the price.
It’s a scary time to invest in risky ideas, but not if you have the right market vision.
Back in 2019, CSIRO created that market vision in our Australian National Outlook report, which forecast Australia could reach net zero by 2050 but, instead of forecasting a 40 per cent drop in our GDP, we showed how we could deliver a 36 per cent gain.
CSIRO’s Market Vision has been our guiding light, and the reason we were able to create a dedicated Health group which, only 4 years later, enabled Australia to mass produce one of the world’s first vaccines to COVID-19.
We built Australia’s largest digital and AI group to mitigate the 40 per cent job disruption we saw coming.
And we shifted from predicting how bad climate change would be, to instead delivering real solutions from science to 30 per cent of Australia’s hardest to abate emissions.
But everything we did, we did with people like you – CSIRO was a catalyst for innovation, but it was industry and academia that made it happen.
CSIRO gives entrepreneurs unique value
We catalysed innovation through a series of initiatives that I’ll briefly explain.
Before I went to Stanford, I actually spent a summer at CSIRO as a student intern working at our Lindfield site in north-west Sydney.
That’s where I first learned that until you’ve delivered a real-world solution, you haven’t really done anything.
So today, CSIRO has a program for PhD students to teach them exactly this lesson and share their knowledge with businesses, called our Industry PhD.
It pairs science PhD students with a local company and CSIRO to solve a real-world challenge the company is facing.
UNSW student Timothy Zurrer is doing his Industry PhD with CSIRO and a small Australian company called Eco Mag, which produces magnesium salts from seawater.
Eco Mag is a classic science company – they have a new product in these salts, but they now need real-world applications for it.
So Timothy’s PhD is finding Eco Mag a market-leading opportunity.
In addition to giving today’s PhD students the commercialisation experience I had, we’re also giving more entrepreneurs access to the facilities I had.
When Australia’s Chief Scientist Cathy Foley was still part of Team CSIRO, she had the idea to turn our tired old Lindfield site into the first of CSIRO’s Collaboration Hub spaces, where hundreds of startups and SMEs can use our specialist equipment and work with our experts to develop new products and prototypes for market.
Some even base themselves there, like autonomous driving startup Baraja with their brilliant LiDAR invention.
They needed access to specialised scientific equipment that’s beyond the budget of a startup to buy, as well as access to researchers with specialised expertise – including our very first LiDAR Zebedee.
CSIRO sites around the country are increasingly becoming Collaboration Hubs for local businesses and universities to co-locate staff.
So our Industry PhD and Collaboration Hub initiatives are close to my heart, because they echo my experiences with CSIRO all those years ago.
When I returned to CSIRO from Silicon Valley at the beginning of 2015, I had learned more than CSIRO could teach me: I had learned how to create a market vision, and how to become a scientist CEO.
Our ON program is the first step in this journey. ON has supported over 3,000 researchers from more than 50 organisations to take their inventions from benchtop to beta.
One of the graduates of our first ON cohort really struggled to position their product but ON solved that, so today FutureFeed is being sold around the world addressing 15 per cent of global emissions.
The secret sauce of ON is the Aussie entrepreneurs and market experts who donate their time to help teach scientists – people like Tony Surtees, David McKeague or David Wright who learned the same lessons I did in Silicon Valley and brought them back home – it’s an extraordinary collaboration.
So far I’ve told you about the supply side of the Valley of Death, and how we’ve helped scientists lean in more towards business.
The next step in this journey is the hardest: crossing the Valley of Death – and that needs traditionally risk averse Australian business and investors to lean in more from the other side.
That’s why CSIRO created the Main Sequence venture fund, a fund for all Australian deep-tech startups that understands the unique trajectory of taking science to market.
Since 2017, the Fund has helped to build 51 deep technology companies, which have created over 1,800 technology jobs.
Every dollar invested has attracted 4 times more in co-investment from traditional investors, drawing them in a little earlier.
We’ve also attracted Australian super funds like HostPlus into the fund, and this is critical to bridge the other side of the Valley of Death.
Some of the promising companies Main Sequence has invested in are on today’s agenda.
Jamila Gordon is the founder and CEO of Lumachain, applying cutting edge technology and AI to illuminate, transform and provide traceability at every step of the food production journey.
Josh Ismin, the co-founder and CEO of Psylo, using psychedelic-inspired medicine to treat mental illness.
Jamila and Josh are not scientists, they are business leaders overcoming traditional Aussie risk aversion to help pull science across the Valley of Death from the other side.
Lumachain and Psylo participated in another CSIRO program called Kick-Start, which plays matchmaker between startups and SMEs needing science, by pairing them with researchers, expertise, and facilities from across CSIRO and provides dollar-matched funding.
Since 2017, the Kick-Start program has helped more than 200 start-ups and small businesses across Australia.
Kick-Start alumni have raised almost $600 million in capital.
Alumni like Siobhan Savage, co-founder and CEO of Reejig, a workforce intelligence platform powered by ethical AI, and she will also be on a panel this afternoon.
But innovation isn’t just for startups.
CSIRO’s national missions show that innovation can actually deliver on government policy in fact, government policy can create the market vision to target the innovation of science.
Missions target our nation’s greatest challenges and bring together diverse coalitions of partners to tackle challenges like Ending Plastic Waste, and transitioning Australia’s industries with the hardest-to-abate emissions Towards Net Zero.
The first mission we launched aimed at creating Australia’s Hydrogen Industry and brought together partners as big as Andrew Forrest’s Fortescue Metals Group and as small as a new hydrogen storage startup called Endua, which was co-created by Main Sequence and Ampol petroleum company.
Australian missions are funded predominantly by industry, opposite to the EU missions where government foots the bill.
It’s true that the business partners in missions will make money, but it’s even more true that these missions will deliver the profound environmental and societal benefit we need to solve our national challenges – to me that’s Aussie innovation at its finest!
Invention to innovation
In closing, I will complete my third and final term as CSIRO’s Chief Executive at the end of this month, closing one of the most challenging and rewarding chapters of my career so far.
It has been an honour and a privilege to work alongside passionate and brilliant people at CSIRO every day and be part of solving Australia’s innovation dilemma.
The AFR Entrepreneurs Summit is the perfect place to talk about our future, because the stories we tell ourselves about success vs failure, competition vs collaboration, science vs business, and other national innovation narratives are at the heart of whether we will overcome Australia’s innovation dilemma.
You may have guessed that this is a topic I could talk about for days, but I’m conscious I’m standing between you and morning tea.
So instead let me refer you to my final prop, this book called Invention to Innovation: How Scientists Can Drive Our Economy.
It includes stories and my lessons from three decades of trying to solve Australia’s innovation dilemma, as well as the generous contributions of luminary voices in Australia and internationally.
It teaches how to transform a scientist into a CEO, then how to transform a company, and finally how to transform the system. Market vision is the key ingredient to it all.
I started this talk with CSIRO’s market vision for Australia – net zero and 36 per cent GDP growth.
But 8 and a half years ago when we started our transformation, CSIRO was at the end of a 30-year decline, having lost about 30 per cent of our people over that time – hard for anyone to believe our forecasts of national growth.
But today, CSIRO has grown for the first time in 3 decades – recovering half of our 30-year losses.
Despite this growth, we still took our entire enterprise 80 per cent of the way to net zero – proving profits can go up even when emissions go down.
By following our market vision, we have doubled the value CSIRO produces each year, last year alone delivering $5 billion more than we ever have before.
If this was a public company, its share price would have doubled.
CSIRO’s proxy is public trust – which doubled relative to the most trusted iconic brand – and 4 years ago CSIRO finally became the most trusted icon against the peers we benchmark against, and remains so today.
The key was market vision, which this book is all about.
But the secret of market vision is diversity, because you can’t create a better future by asking the same people who brought you the past.
So we changed – shifting our culture and diversity faster and further than ever before – almost doubling our First Nations population and our female leadership.
These diverse minds enabled us to see a different future and deliver solutions from science to make it real.
So I place my hope for Australia’s innovation future in the hands of our diverse minds, our scientists, and our entrepreneurs.
As a small token of my thanks to you, we have a number of complementary copies of the book available at the CSIRO booth for the first 100 people to drop by.
While you’re there, we have a few CSIRO folks who would love to talk to you about how we can help you succeed.
I’m also delighted to be officially launching the book in partnership with the AFR this evening as part of the summit’s networking drinks, so I hope to see many of you here at the end of the day.
If I can leave you with one thought, let me return to my friend, 2018 Australian of the Year, Professor Michelle Simmons, who was up here before me this morning.
Different people see different things when they look at Michelle – some see a brilliant professor, others see former Australian of the Year, and others see a brilliant role model for women in STEM – but most see a brilliant inventor.
When I look at Michelle, I see the future, because when a brilliant professor leaps into the void away from the safety of tenure, so she can focus 110 per cent of her time on her startup to turn her invention to innovation – then I see someone who can change the world – and that’s how we will re-write Australia’s future from invention to innovation.