Blog icon

15 September 2021 Speech

Good afternoon everyone, and thank you to Morgan Stanley for the invitation to speak.

My name is Kirsten Rose, and I lead the Future Industries team at CSIRO – Australia’s National Science Agency. We’re an independent government agency with almost half our funding from external revenue, which includes partners in government, industry, research, and internationally.

I know you’ve been at your computer screens for several hours now, and after hearing today’s speakers you will be keen to get out and disrupt, but thank you for listening as I share a few thoughts about disruption from my vantage point at CSIRO.

I’d first like to acknowledge the Traditional Owners of the land I am on today in Perth, the Whadjuk people of the Noongar nation, as well the many locations where you may be joining from, and pay my respect to their Elders past, present, and emerging.

When my colleague Dr Larry Marshall spoke at this Conference in 2019, he talked about Australia’s innovation problem, the false sense of security that three decades of economic growth had created, and why we needed to harness disruption to create opportunity.

It’s been two years and a pandemic since then, and the world has packed at least a decade’s worth of change into the past 18 months.

COVID-19 has accelerated many trends like digital transformation and agile manufacturing, and exposed the fragility of our already fraying industries.

Scientists are observing changes in the Earth’s climate in every region, and some of those changes are now irreversible.

And changing consumer trends towards products that are ethically and sustainably sourced are driving financial markets and governments to disrupt existing supply chains.

I am going to present today that ‘harnessing disruption’ is not just an appealing ideology, or snappy corporate catchphrase. It is a commercial necessity.

Charles Darwin said; “It’s not the strongest, but the most adaptable that survive.”

I believe financial markets have a huge role to play in disruption and adaption, and even in the natural selection of which companies and industries grow.

And those financial markets are moving in line with the big challenges we face as a civilisation – the warming of our climate, the security of our food and water, and the relationship between our industries, the environment, and our communities – just to name a few.

This is creating a new natural order in innovation, and the most successful innovations deliver against the trifecta of environmental good, social good, and economic good.

At the National Science Agency, this is the criteria we use to plan our investments, and the future industries that will secure Australia’s resilience and prosperity. And as the leader of CSIRO’s Future Industries team, it’s what I wake up every day thinking about.

Today I will talk about the evolution of models to commercialise Australian science, and create new investment opportunities that deliver the trifecta.

Like those that thrived in Darwin’s model, these opportunities are driven by adaptation to disruption, and they are creating a new breed of companies that represent the future of Australia’s economy.

 

My background

I should clarify at this point that I am not a scientist, and I don’t pretend to be a scientist, but I have been in and around innovation at large organisations for a long time.

Before joining CSIRO, I was at BHP in a global innovation role driven by the reality of the financial and shareholder environment that BHP was operating in.

BHP is of course a prosperous company that makes a major contribution to the economic development of many countries around the world.

But it had to constantly innovate to stay ahead of disruption, including to solve wicked problems like greenhouse gas emissions, water, dust, and tailings.

My team worked across the global organisation to apply technology and innovation to make BHP’s supply chain and operations more sustainable, delivering tangible solutions in the face of growing environmental, social, and governance risk. You might say I was a disruptor from within.

I already had a background in energy and climate, but this was my first foray into resources.  I became a true eco-pragmatist, and resolute in my belief in the power of innovation to create and sustain financial value.

One of the things I came firmly to believe was that we must make the resources industry more sustainable, because there are many things the industry delivers that we will need forever as a civilised society – like copper and nickel.

So there is a huge imperative to transform that industry in the face of massive disruption, and ultimately, the market will be the driver of that evolution.

 

Venture Science and Company Creation

I said I’m not a scientist, but I often describe myself as a science groupie.

One of the best things about my role in CSIRO is how connected it is to every other part of the organisation – from the businesses to the breakthrough science to the commercialisation engine.

I am deeply in love with the ‘company creation’ approach we are taking, and the evolving Venture Science model we are growing through our Innovation Fund, which as you know is managed by deep tech venture Main Sequence. They are an excellent team, and I hope you were able to catch Martin Duursma’s session on space venture earlier today.

Everything CSIRO does is about delivering the trifecta of environmental, social, and economic benefit, but Venture Science is also about another trifecta.

Instead of science as a solution looking for a problem, Venture Science starts by identifying a challenge, and then brings together a powerful partnership of industry, research, and investment to co-design a solution and a brand new company to deliver it.

It’s an extremely effective way to get science out of the lab and into a business model that makes sense.

It’s how plant-based protein company v2food was created by Main Sequence, CSIRO, and Hungry Jacks, which is now valued at more than $500 million.

It’s how animal-free dairy company Eden Brew was created in July by dairy co-operative Norco, Main Sequence, and CSIRO.

And it’s how low-emissions livestock feed company FutureFeed was born – not through venture but through company creation with industry – raising $13 million last year from a range of investors including the AGP Sustainable Real Assets-Sparklabs Cultiv8 Joint Venture, GrainCorp, Harvest Road, and Woolworths.

Industries like fast food, dairy, and supermarkets have not traditionally been early-stage investors or company creators, but that is changing.

The Innovation Fund and Main Sequence were created in 2017 with a $100 million investment from CSIRO and the Australian Government to bridge the gap that separates emerging science and traditional investors.

But under a Venture Science model, that gap is getting narrower, and the traditional late-stage investors are getting involved earlier.

Fund 1 raised a further $140 million in private sector commitments and has invested in 27 companies from a pipeline of science coming out of CSIRO and the publicly funded research sector.

Fund 2 announced its $250 million fundraise in April and was over-subscribed by the private sector. It will have a stronger focus on Venture Science, and it has already seen the birth of four new companies –

Eden Brew, which I’ve mentioned.

Quasar Technologies, which will revolutionise space communication with funding, technology, and expertise from CSIRO, Main Sequence, the NSW Chief Scientist & Engineer, and Australian companies Vocus, Saber Astronautics, Fleet Space Technologies, and Clearbox Systems.

Endua, a hydrogen-powered energy storage start-up based on CSIRO science, and backed by petroleum giant Ampol, CSIRO, and Main Sequence.

Plus another which is soon to be announced.

It takes support from every part of the innovation system – industry, investors, research, and government – to deliver the new companies and industries that will help Australia lead, not just follow, on the world innovation stage.

With that support, the companies the Fund creates are essentially an evolved species, bred on Australian science in response to disruption, and tested against the market to ensure they can compete and survive.

It is a whole-of-ecosystem approach to innovation, starting with the problem and the market, and working backwards with industry to deliver a solution from science.

 

Missions

This whole-of-system approach is also an important point of difference for the program of missions CSIRO is working on, and the future industries they will help create.

Missions are broad, collaborative research programs designed to help address Australia’s great challenges – our food security and quality; our energy and resources; our health and wellbeing; the resilience of our environment; the innovation in our industries; and our security in the region.

Different to other mission-oriented programs around the world, which are largely led by governments, our missions are co-led between government, research, and industry. Another powerful trifecta.

Instead of just looking to government for support – and there is a lot of alignment there – we are also focussed on the market end to figure out the ecosystem of industry players who will put their own money into the mission, because they see clear value.

The sheer size and scale of these missions mean that no government, industry, or research organisation working alone is going to be able to crack them.

So, we are co-investing and co-developing solutions that are science based, government aligned, and backed by industry.

Those solutions are both creating new industries to meet global demand in areas like energy and agrifood, and applying innovation to existing industries to create new value.

Let me give you some examples.

 

Hydrogen

In May we launched our Hydrogen Industry Mission, targeted at creating a clean hydrogen export industry for Australia to reduce the emissions, but not the profits, from our exports and industries.

The mission will work to scale demand and drive down hydrogen cost to under $2 per kilogram by 2030, and support a secure energy transition.

It is a $68 million co-investment over five years from CSIRO and our partners, bringing together Fortescue, Hyundai, Toyota, Swinburne University, and the Australian Hydrogen Council.

Each of these organisations can see the disruption going on in energy markets and fuels, and they know that to survive and thrive, they will need to adapt.

The mission has already met key milestones, like the formation of an International Collaboration Program for research, development and demonstration of hydrogen-based technology;

Like the establishment of the Victorian Hydrogen Hub with Swinburne University and the Victorian Government, where we are trialling and demonstrating new technologies, including our first hydrogen refuelling station;

And like the birth of new start-ups like Endua, which as I mentioned is transforming energy storage with the help of industry giant Ampol.

This is the market driving disruption, and an ecosystem of innovators responding to change.

 

Agrifood

Similarly, in agrifood, last week we launched three missions backed by $150 million of co-investment from CSIRO and the sector, all focused on harnessing disruption to turn challenge into opportunity.

The missions will generate $20 billion in new revenue for Australia, and reduce the impact of drought on our farmers and regional communities by 30 per cent – all within this decade.

Our climate models tell us that Australia will spend more time in drought, and farmers will experience up to 30 per cent less winter rainfall by 2050. That’s the first challenge.

But instead of treating drought as a crisis, we have the science and the experience to shift to being prepared. That’s the opportunity, and our Drought Resilience Mission aims to capture it.

For example, we’re looking at farming adaptations, and a future where farmers can choose from a range of drought resistant seeds to plant crops and pastures that best suit conditions.

We have new wheat varieties being trialled with farmers right across Australia today, and early modelling results indicate yield increases of up to 20 per cent.

We don’t have enough agricultural land to grow enough of the plants and animals we currently eat to feed the 9.8 billion people who are projected to inhabit Earth in 2050. That’s the second challenge.

The world is going to experience a surge in protein demand, and Australia is well situated to sustainably provide that protein from more sources. That’s the opportunity, and our Future Protein Mission aims to capitalise with new protein products earning Australia $10 billion in revenue by 2030.

Animal-based protein will continue to play a vital role, so we’re looking at how we make the industry more sustainable and get more value from the meat we produce. For example, we’re investing in value-added processing capability to turn lesser cuts into high-value, nutritious shelf stable products.

But in addition to meat, we’re going to need a lot more protein overall, so there are also opportunities for new markets. For example, we’re investing to establish a new plant protein industry for Australia that’s expected to deliver $4 billion in value. We’re also creating new capability in advanced biomanufacturing, and a sustainable white flesh fish industry fed on commercial food waste and insects.

Difficulties gaining access to high value international markets play a big role in the competitiveness of Australia’s agrifood exports. That’s the third challenge.

But our ‘Brand Australia’ reputation for safety and quality means our products are in high demand and can fetch a premium. That’s the opportunity, and our Trusted Agrifood Exports Mission aims to overcome access issues to boost our earnings to $10 billion by 2030.

To unlock these markets, we are looking at how we digitise supply chains and factories to automate compliance to a range of requirements like sustainability, pest control, and animal welfare.

We’re also investing in how we protect our ‘Brand Australia’ reputation from impersonators, with unique science that can verify the origins of our food products.

These missions are backed by a diverse group of industry collaborators including Hort Innovation, Meat and Livestock Australia, the Grains Research & Development Corporation, v2food, GrainCorp, Ridley, Clara Foods, Wide Open Agriculture, and start-ups such as Eden Brew. 

They are also backed by federal and state government, as well as a range of Australian universities.

This is Australian science creating impact in partnership with industry, and delivering the trifecta.

There is an enormous amount of commercial potential in these three missions, and we are keen to welcome more partners and investors to help them grow.

 

Towards Net Zero and Ending Plastic Waste

The last couple of missions I want to mention relate directly to climate change, and you’re likely to hear more about them before the end of the year.

The circular economy for plastics recycling is projected to deliver nearly $67 billion in value to the global economy by 2025. In Australia, we lose around $419 million annually by not recycling PET and HDPE plastics, like soft drink bottles and shampoo bottles.

These are some of the opportunities our Ending Plastic Waste Mission is targeted at, which aims to reimagine the way Australia makes, uses, recycles, and disposes of plastics.

Put plainly, it aims to turn waste into money and jobs, and free our waterways and oceans from plastic at the same time.

In response to low emissions goals being set around the world, we are also working on a mission to lay a technology pathway to net zero.

Last year we saw five multinational oil and gas companies commit to net zero emissions by or before 2050 – BP, Shell, Total, Repsol, Equinor and Occidental Petroleum. We also saw the introduction of carbon border taxes in some economies.

These trends are both a threat and opportunity for Australian export industries, but with investment in technology, we can position ourselves to take advantage.

Our Net Zero Emissions Mission will aim to do this with the development and demonstration of low emissions technologies to decarbonise industry and supply chains, and create new growth industries in the low carbon economy.

These missions are grounded in a commercial reality where sustainability is not just profitable, but like the story I shared about my time at BHP, it is a prerequisite to play.

Both these missions are growing in momentum, and there’s lots of opportunity to get involved, so don’t be shy.

 

Closing

Darwin’s theory of biological evolution said that species arise and develop through the natural selection of small, inherited variations that increase their ability to compete, survive, and reproduce.

Today we are in an era of necessary industrial evolution. Those that adapt with variations will survive the natural selection that financial markets will enforce, and gain an advantage to help them compete, survive, and grow.

I believe there are tremendous opportunities for Australian industries to not just survive but thrive – but we must evolve in the face of disruption.

This should not be considered a ‘stretch goal’ or a ‘nice to have’ – it is a commercial necessity, because the new natural order is already being established.

Australian science is delivering the trifecta of environmental, social, and economic benefit needed for sustainable innovation, and we are developing some of the best models I’ve seen to take that science from the lab bench to business, where it can create value.

The next step is scale. To solve our great challenges and create the future industries that will evolve our economy for a new era, we need to dial up everything we’re doing.

We need investment in the right areas, we need more partners who share our vision, and we need more great Australian science pushing the boundaries of possibility.

That’s when we turn disruption into opportunity, and challenge into strength.

After all, opportunity is often disguised as disruption.

Thank you for seeing today through to the end with me, and I’m sorry I couldn’t be there live to take questions. But don’t hesitate to reach out – I’d love to hear from you.

Thank you.

Categories

Contact us

Find out how we can help you and your business. Get in touch using the form below and our experts will get in contact soon!

CSIRO will handle your personal information in accordance with the Privacy Act 1988 (Cth) and our Privacy Policy.


First name must be filled in

Surname must be filled in

I am representing *

Please choose an option

Please provide a subject for the enquriy

0 / 100

We'll need to know what you want to contact us about so we can give you an answer

0 / 1900

You shouldn't be able to see this field. Please try again and leave the field blank.