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7 December 2020 Speech

Dr Larry Marshall, Chief Executive of CSIRO, delivered this speech at the AFR Innovation Summit on 7 December 2020.

I would like to begin by acknowledging the Gadigal people of the Eora nation as the Traditional Owners of the land that I’m on today, and pay my respect to their Elders past, present and emerging. 

It’s fabulous to be back at the AFR Innovation Summit, albeit virtually. Let’s face it, we all need innovation more than ever after a year like we’ve just had. 

Our morning speakers have outlined the massive disruptions we’ve seen as a result of this horrible pandemic – some have suffered terribly, and others have taken advantage of circumstance to actually prosper. 

Companies that are navigating the crisis well have done so by embracing innovation, like the explosion of telehealth, virtualisation, and the accelerated adoption of digital. 

But most importantly, they used digital where it made sense to help them deliver on their purpose – not in a bid to become something they were never actually meant to be.

I think that’s one of the secrets of digital innovation.

CSIRO has been part of Australia’s successful navigation, because our purpose has always been to support Australian industries through disruption, and so we were very well prepared for this crisis and others in our history.

Five years ago, we launched our Strategy 2020, which saw us transform CSIRO around the big challenges and opportunities we saw coming square on to hit Australia.

That included shifting to climate mitigation and adaptation, digital transformation, shifting to agile manufacturing, and the need for a One Health approach to protecting Australia from biosecurity threats, like pandemics.

All that change meant we were right there on the front foot since bushfires hit last year.

As you heard from Adrian and Richard this morning, we delivered innovations like the world’s lightest and most technologically advanced fire protection cladding, made right here in Australia, for Australian buildings.

And of course, when COVID-19 arrived this year, as you heard from Andrew and Paul from CSL and UQ this morning, we used our science to support rapid vaccine development, scale up, and now manufacturing of vaccines.

We focused our world-class research on COVID-19 to understand virus strains, detection of the virus, and its survivability, so we could kill it in its tracks.

And as you heard from Gabrielle this morning, we’ve supported state governments with predictive analytics to inform public health decisions.

So that’s just the frontline response to COVID-19 – what I want to talk about today is what comes next. 

How do we use science and technology to drive real innovation – innovation that will grow our economy out of recession and earn our way into future prosperity and sustainability?

How do we use our science to harness Australia’s strengths and give us an unfair advantage in an unfair world?

It’s easy to say we do it by using science to predict what’s coming, and technology to deliver the solutions from science that we need to grow and be competitive – but it’s wickedly hard to deliver.

Australia’s unique unfair advantage

We won’t beat the global tech companies that are rewriting the operating system for the world; not if we play them at their own game. 

It’s unlikely we’ll be the world’s best in Artificial Intelligence, or AI, especially given the hundreds of billions being invested in China and the United States. 

But we could be the world’s best at AI for an Australian purpose – AI to predict drought, AI to outthink bushfires, and AI to predict the instabilities of renewables and stabilise our energy grid.

Precision agriculture, unique foods that enhance health and prevent disease, and unique materials transmuted from the commodities of old – these are Australia’s unique unfair advantage. 

You can’t eat a bit or a byte, but you sure can use it to predict the best strain of crops to breed to beat out climate change – and we’ve demonstrated that already. 

For example, we can grow crops more efficiently under more extreme drought conditions using precision agriculture innovations, like this WaterWise sensor, which monitors soil, weather, plant conditions – pretty much everything that you need to know – and more importantly, everything the plant needs to know so it can literally order its own drinks.

When we applied decades of our genomics expertise in plants and animals to humans, and combined it with predictive analytics, we discovered that it’s the human genome that gives us our immunity. 

Preventative medicine is another uniquely Australian unfair advantage.

Using those decades of breeding experience, we again used predictive analytics not to breed a physical organism, but using primitive AI to breed and simulate and then create a whole new type of material, that literally transmuted beach sand from a commodity into this unique, world first, programmable stent, to save lives. 

Australian science transmuting a commodity into a high value, unique Australian product. 

Now, we might be a small population, but we are a smart one. We certainly can’t compete on size or scale – but we can compete when we use science to play to our strengths, and to reinvent those strengths using science to solve the seemingly impossible, because that’s what Australian science has done, time and time again. 

The game is changing 

I’m pleased to see this year’s AFR Summit tackling the idea of ambidextrous organisations and economies – that is, being able to balance the demands of the present while still having a clear vision of the future.

That is what will drive our recovery, and it’s something CSIRO has been delivering on for the past five years, well before COVID-19 and back when there was, frankly, very little appetite for innovation from science.

How do we know that this bold idea will work?

Well, over the life of our Strategy 2020, we’ve grown the value of our own equity portfolio tenfold. Yep, ten times increase in value over five years from the companies and Intellectual Property that CSIRO invests in.

How did we do that? 

Again, simple to say, we used science to predict a different future, then we set about creating the science and technology needed to make our vision of the future become the real one. 

The companies and products we created on that journey are unique – they don’t compete on price, because they don’t have to, and their employees earn higher wages because there is less competition for a product that frankly people thought was impossible to make until science changed the game. 

That’s the key to a different future for our country. 

Australia has remarkable research capability and potential to lead in future industries, but we lack speed and we lack a market vision. 

We think that once we’ve invented it, the job is done and we move onto the next invention, because we don’t invest in turning our own innovations into something real. We don’t back ourselves.

But today is different, because today, we have a unique motivation. 

Australia is faced with the grim but persuasive reality: transform, reinvent, catalyse – or decline. 

Mega trends amplified by COVID-19

Last year, CSIRO partnered with NAB to publish the Australian National Outlook, or ANO, which forecast what Australia would look like out to 2060. 

It forecast a bright future if we invest in our innovation opportunities, but a grim, slow decline if we don’t.

I’ve been asked a lot of questions this year, about what COVID means for us, and for the ANO? Do we need to throw it out and start again? Surely the world has completely changed?

Yes, it has certainly changed – but no, we don’t need to throw the ANO out. We need to fast forward about a decade.

So a couple of months ago we published an update, and it wasn’t just an analysis of new trends, it was a clarion call for action to drive our recovery – so creatively, we called it COVID-19: Recovery and Resilience plan.

It highlighted a few key trends that had been in the ANO but were now supercharged by COVID-19:

  • Digital transformation has obviously accelerated.
  • Agile manufacturing, to achieve mass customisation like that stent, delivering personally to a customer of one, but supporting literally a market of billions. 
  • And a one-Health model to biosecurity, underpinning how we return to a whole new kind of normal.

No wonder we’re all feeling a bit disorientated – we went into lockdown and now like Rip Van Winkle, when we came out again, we were a long way into the future.

So now the future is here, how do we catch up to it? Let me tell you three things CSIRO is working on with Australian businesses that show our ambidexterity.

Agriculture and Food 

The first is in Agriculture and Food. 

When CSIRO was created over 100 years ago, agriculture was our first area of research.

From improving crops to our first mission – ridding the land of the prickly pear – CSIRO has always sought to understand our land, our people, and our food.

More recently, we’re working with Indigenous Australians to understand knowledge that goes back way more than CSIRO’s 100 years.

Back in the 1970s, we invented the first physical model of the human gut, and today, you’re hard pressed to find an Aussie who hasn’t heard of the CSIRO Total Wellbeing Diet.

In recent years, we’ve been concerned that the changing diet of Asia away from meat would diminish a great Aussie unfair advantage – our meat export industry.  

We also know our global population is forecast to hit 10 billion by 2050. If we continue to eat meat at current rates, we will need another planet to grow enough animals to satisfy that demand. 

So our taste scientists figured out how to make a plant taste as good as Angus beefsteak. 

Add to this what we already know about how to use digital technology and predictive analytics, to quickly breed genetic varietals of plants that improve your health, and ok, you have a compelling research proposition, but what’s the market here?

Our CSIRO Innovation Fund, Main Sequence Ventures, brought in Hungry Jacks, and we built a pilot manufacturing plant in Werribee in Victoria, and within a year, v2food was not only born as a real company, it was generating revenue and fast approaching profitability.

You can find v2food plant-based meat alternatives on your supermarket shelves, and when you buy these products, you’re investing back into Australian science and Australian global unfair advantage. 

It’s this unique combination of great science and real engineering capability that makes CSIRO a unique bridge to connect the research system to industry. 

We know Australian industry is risk-averse when it comes to trying science-driven innovation, and who can blame them?

So CSIRO tries to help them by developing great science to a much higher technology readiness level so Australian industry will use it. It’s that simple. 

Instead of exporting raw plant crops – which we will still do – we’re now also exporting high-value added products.

We think Australia will create a $10 billion alternative protein market that’s additive, not competitive, with our beef industry. 

Sustainably sourced protein from plant-based products is an enormous and immediate opportunity, and we are already seeing the market respond.

What has this got to do with a pandemic?

As global supply chains open back up, we’ve established an Australian company with uniquely defensible IP, unique local manufacturing skills, and one that builds on a long history of Australian strength and expertise.

Energy

The second are I want to touch on is energy.

The world is trying to undergo a massive market shift towards lower emissions.

Sustainability is no longer just an environmental concern – it will be critical to our ability to compete globally.

Australia could be hurt by this because of our large dependence on fossil fuel exports, or we could see it as an opportunity for transformation. 

So how can we create a new energy export that actually grows our economy, and increases the jobs in our energy sector?

We think hydrogen is a great bet – something we can bottle and export the way we do with coal or LNG, but without the emissions. 

So five years ago, CSIRO bet big on hydrogen, then I talked about it at a banker conference and got a lot of laughs.

And actually I spoke to the same conference two years ago, and still got a lot of laughs.

But then, global investment in hydrogen jumped more than tenfold, because the market woke up. 

This is why it’s so important to be ambidextrous – you have to be looking far ahead in order to get ahead, but you need to survive today. 

You can’t sell tomorrow to buy today. Science gives you the power to do both – science gives you the power to see a different future, and then go create it.

We have a unique Australian opportunity when it comes to hydrogen – we have natural gas to blend with hydrogen, we have a fast-changing electricity sector which hydrogen can support with storage, and we have a very skilled export workforce.

We can even export Australian sunshine if we use solar power to split hydrogen out from water or ammonia and send it around the world as we currently do with LNG.

CSIRO has pioneered work in developing a unique membrane that can be used to fuel hydrogen-powered cars with ammonia. 

It literally transmutes a commodity, hydrogen, into a unique, liquid renewable fuel, that means you can refuel your car just as quickly as you do at the petrol pump today.

You could literally ship clean liquid renewable fuel around the world using the existing infrastructure that’s currently used for liquid fuels, so no paradigm shift. 

Again, science and technology doing something that just a few years ago was thought to be impossible. This is the future for Australia. 

It could be a unique Australian product and a high-value new industry. 

We are seeing strong demand for this throughout Asia, particularly in Japan and Korea, and we think there’s potential for an $11 billion Australian hydrogen industry over the next several decades creating thousands of high paid Australian jobs.

And how has the pandemic impacted this bet?

When we all went inside for a while, our cars were off the roads and our planes weren’t in the skies. Our carbon footprint actually dropped – just a little bit – but it made us take stock of our operations.

Earlier this year, CSIRO published a roadmap with Boeing, mapping out how we can start a hydrogen-powered aviation industry within this decade.

Regional stability and global supply chains for fuel have been under pressure, turning the eyes of the world to sovereign supply and unique sources of zero emission fuels.

Missions

So they’re just two of the examples from agriculture and energy where being ambidextrous can lead us forward to recovery.

The third and final example I want to talk about today is actually not even an example yet, you’re getting a sneak peak behind the curtain at how innovation happens.

Or rather, how we think innovation should happen in the future. 

The challenge now is – how do we approach these opportunities in a coordinated way? How do we achieve scale and impact, instead of pockets of brilliant disconnectedness?

We think a mission-led approach is the way forward.

What we see working so well in the world’s response to COVID-19 is a strong network of multidisciplinary organisations like CSIRO working together to achieve a common goal.

This is the model for collaboration that we see shaping our future, and it is the model that we are framing our program of missions around to drive Australia’s recovery and future resilience.

Missions are like start-ups – they are laser focused on breaking through the bottlenecks to Australia’s competitive advantage.

They are shamelessly focused on creating economic value for Australia, and they are obsessively focused on delivering high paid jobs for all Australians. 

Some may fail, in fact if they don’t, we probably aren’t pushing hard enough.

But even those that fail to meet their lofty goals will still make us better than we are today, and that may in fact help us overcome our national fear of failure.  

But they are also different to start-ups because they are ambidextrous – they aren’t hunkered down in a secret lab, they are networked broadly across the system, working through a broad coalition of the willing. 

The missions overlap with many of the areas covered by the COVID-19 Recovery and Resilience Report – like growing our trusted agriculture and food exports to $100 billion in this decade, or growing a clean Australian hydrogen industry. 

They are the way we will operationalise these amazing opportunities. 

But they do something else, too. They look into the future to prepare for the threats that could derail our future resilience, like a prolonged drought, antimicrobial resistance, water security, resilience to infectious disease, and adapting to bushfires and the risks of climate change.

They also create a vision and a framework for investment in Australian innovation by, and for, all of Team Australia.

There’s a lot to be optimistic about in 2021 – not the least of which means 2020 is being left behind – but I’m excited to come back next year to this summit having launched a few missions on their exciting trajectory.

Closing

In closing, Steve Jobs employed a lot of left-handed and left-brain people at Apple. I asked Steve once if he was a lefty too. 

He laughed and said no, “I’m ambidextrous, I have to be”. It’s true that entrepreneurs have to think ambidextrous, and today, our whole economy has to think ambidextrous, too. 

We know that we can’t just deal with today and worry about tomorrow, tomorrow. We have to deal with both together, and we have to do it right now.

The world is learning this from the COVID-19 experience, which continues to be a real-life science experiment where we can see the direct impact of our actions on people and economies on a very large scale.

The reason we were able to hit the ground running when COVID-19 first emerged is that we foresaw the inevitable threat of a pandemic, and four years earlier, we invested to prepare for it. 

The reason we could lead the bushfire science and technology recovery plan was we’d shifted to mitigation and adaptation four years earlier. 

And the reason our equity portfolio has grown tenfold is because we used science and technology to predict what might happen in the future and we backed ourselves to make it happen.

We’ve got to apply the same thinking to our economic recovery, and invest now in the future opportunities and threats that will shape Australia in the future, drawing on our unfair advantages and staying true to our own purposes. 

Australia’s best path to recovery from a global pandemic is a Team approach, and that means research, business and government working together. 

As instinctive as it may seem to hunker down in silos and focus on short term economic gains, we can’t sell tomorrow to buy today.

If we simply recover back to where we were, we know that’s still a slow economic decline into the sunset.

We have to reinvent our own future, and we will go much further, if we go together.

Thank you.

[ends]

 

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