Increased collaboration, stability of policy and acceleration of commercialisation are three main drivers of innovation and job growth that must be addressed to accelerate Australia’s economy in the next 15 years.
The top three drivers were identified at the AFR National Innovation Summit today by Chairs of the boards of Telstra, BHP Billiton and Innovation and Science Australia.
The panel warned that fears around the effects of disruption on jobs must be part of the conversation, and that the effects of digital disruption through automation, and artificial intelligence were inevitable.
This disruption will affect people and jobs whether they are “in Woomera or Sydney”, says Bill Ferris, Chair of the board of Innovation and Science Australia.
“In five years we’ve seen the rise of Uber and Instagram, and the collapse of the mining boom. What is coming towards us will dwarf the change of pace [in disruption] to date,” says Dr Nora Scheinkestel, Chairman of Macquarie Atlas Roads and Director of Telstra Corporation and Stocklands Group.
Policy and R&D tax incentives
Crucial to Australia’s ability to innovate is the stability of policy such as the R&D tax incentive, which aims to encourage private investment in Australian R&D.
Along with Chief Scientist Alan Finkel, Bill Ferris was part of a team that reviewed the incentive for government to evaluate how much investment the incentive has created and the scheme’s effectiveness.
“I agree it is valuable and should be continued,” says Ferris. “Can it be improved? I think so. It’s been a $3 million cheque and the largest there has been. But there is nothing in the scheme that requires collaboration, whether CSIRO or academia.”
Incentivising collaboration is a no-brainer next step, says Ferris.
“I don’t think business is trying as hard as academia. Universities are getting on with business, creating spin-offs like QUT’s Spinifex, and Ian Fraser’s cancer vaccine. It’s very impressive.”
Stability of the R&D investment scheme is key to its success, says Carolyn Hewson AO, Director, BHP Billiton, Stockland Group and Federal Growth Centres Advisory Committee.
Hewsen says BHP Billiton was ‘deeply’ affected as a company by the collapse of the mining boom this year. “Every company is under pressure to innovate.” (See “How big companies can innovate)
“There is a role for government to address the KPIs they set around research funding.
KPIs need to move to speed of commercialisation rather than publication in tier 1 journals.”
“My concern is it is very easy for government with 3-year time horizon to make decisions on funding over a long term investment. Research projects extend out many years. To be subject to be changing regulation of government regulated by short-term political cycle is very worrying.”
How big companies can innovate
– Carolyn Hewson AO, Director of BHP Billiton, Stockland Group and Federal Growth Centres Advisory Committee
Accelerating technology competencies
Innovation hubs working to address innovative solution to specific challenges, eg. automation of trucks and drills
Step-up programs to build from the inside of the company
Partnerships with universities and CSIRO, CRCs on engineering and remote operations
Collaborate and commercialise for job growth
Ferris is optimistic about Australia’s ability to respond to the challenge to grow jobs by 2030. Agribusiness, aquaculture, cybersecurity, environmental services, renewables, and new materials were all strong potential job growth areas, he says.
“A lot more work needs to be done by business on reaching in. If we can’t commercialise around our inventiveness we won’t create the jobs that we could and that we deserve.”
Scheinkestel says the ecosystem is essential to drive innovation and job growth.
“The big message from Israel is the ecosystem created between business and academia, and in their case the military, where young people are taught strong leadership skills. They commercialise or adapt tech they have been looking at, get the backing of VC, which are supported by consistent policies from government around tax regimes.
“Again in Silicon Valley, you are talking about an ecosystem, a constellation of start-ups with shared resources and again consistency in policies and tax incentives.”
Hewson agrees that work skills are essential to our future and that there is concern about workforce skills in Australia across a number of advanced manufacturing, mining and medical sectors.
“We want to enhance global competitiveness and build on strategic collaboration within these sectors,” she says.
“It’s not just about growth, it’s about survival,” adds Scheinkestel.
For a country that makes up just 0.3% of the world’s population, Australia packs a heavyweight punch in science – generating 3.9% of the world’s research publications. However taking that research to market has proved a broader challenge.
Fostering the commercialisation of research success and encouraging collaboration between industry and researchers is at the forefront of the government’s renewed focus on scientific innovation, with over $1.1 billion earmarked to kickstart the “ideas boom” as part of the National Innovation and Science Agenda.
Fibrotech develops novel drug candidates to treat fibrosis (tissue scarring) associated with chronic conditions such as heart failure, kidney and pulmonary disease, and arthritis. The company spun out of research by Professor Darren Kelly at the University of Melbourne in 2006, and its principal asset is a molecule, FT011, which helps prevent kidney fibrosis associated with diabetes. In May 2014, in one of Australia’s biggest biotech deals at the time, Fibrotech was acquired by Shire, a Dublin-based pharmaceutical company, for an initial payment of US$75 million. Further payments, based on a series of milestones, will bring the total value of the sale to US$557.5 million, and the deal was awarded Australia’s best early stage venture capital deal in 2014. At the time of the sale, FT011 was in Phase 1b trials for the treatment of renal impairment in diabetics – a market worth US$4 billion annually.
SOLD FOR:acquired by Novartis for US$200 million up-front payment plus milestone payments
Spinifex Pharmaceuticals was launched in 2005 to commercialise chronic pain treatments developed by Professor Maree Smith of The University of Queensland. Pharmaceuticals giant Novartis acquired the company in 2015 for a total of US$725 million, based on the promising results in Phase 1b and Phase 2 clinical trials. Spinifex’s treatment targets nerve receptors on peripheral nerves rather than pain receptors in the brain, making it possible to treat the pain from causes such as shingles, chemotherapy, diabetes and osteoarthritis without central nervous system side-effects such as tiredness and dizziness.
Admedus is a diversified healthcare company with interests in vaccines, regenerative medicine, and the sale and distribution of medical devices and consumables. Currently, the company is developing vaccines for herpes simplex virus and human papillomavirus based on Professor Ian Frazer’s groundbreaking vaccine technology. In the regenerative medicine field, Admedus is the vendor of CardioCel®, an innovative single-ply bio-scaffold that can be used in the treatment of congenital heart deformities and complex heart defects.
For more than 25 years, ResMed has been a pioneer in the treatment of sleep-disordered breathing, obstructive pulmonary disease and other chronic diseases. The company was founded in 1989 after Professor Colin Sullivan and University of Sydney colleagues developed nasal continuous positive airway pressure – the first successful, non-invasive treatment for obstructive sleep apnoea. Today, the company employs more than 4000 people in over 100 countries, delivering treatment to millions of people worldwide.
BioDiem specialises in the development and commercialisation of vaccines and therapies to treat infectious diseases. The Live Attenuated Influenza Virus vaccine technology provides a platform for developing vaccines, including one for both seasonal and pandemic influenza. BioDiem’s subsidiary, Opal Biosciences, is developing BDM-I, a compound that offers a possible avenue for the treatment of infectious diseases that resist all known drugs.
Vaxxas is pioneering a needle-free vaccine delivery system, the Nanopatch, which delivers vaccines to the abundant immunological cells just under the skin’s surface. Preclinical studies have shown that vaccines are effective with as little as one-hundredth of a conventional dose when delivered via a Nanopatch. In 2014, Vaxxas was selected by the World Economic Forum as a Technology Pioneer, based on the potential of Nanopatch to transform global health.
Biotech company Acrux was incorporated in 1998 after researchers at Monash University developed an effective new spray-on drug delivery technology that improved absorption through the skin and nails. In 2010, Acrux struck a US$335 million deal with global pharmaceutical company Eli Lilly for AxironTM, a treatment for testosterone deficiency in men. It was the largest single product licensing agreement in the history of Australian biotechnology.
With a focus on ophthalmology, Opthea’s main product is OPT-302 – a treatment for wet age-related macular degeneration – which is currently in a Phase 1/2a clinical trial. Wet macular degeneration is the leading cause of blindness in the Western world. Opthea was formerly known as Circadian Technologies, acting as a biotechnology investment fund before transitioning to developing drugs in 2008.
Benitec Biopharma’s leading product is DNA-directed RNA interference (ddRNAi) – a platform for silencing unwanted genes as a treatment for a wide range of genetic conditions. ddRNAi has broad applications, and can assist with conditions as diverse as neurological, infectious and autoimmune diseases, as well as cancers. The company’s current focus inludes hepatitis B and C, wet age-related macular degeneration and lung cancer.
Using a wearable electroencephalograph (EEG), SmartCap monitors driver fatigue by measuring changes in brain activity without significant discomfort or inconvenience. It notifies users when they are fatigued and what time of day they’re most at risk. SmartCap was formally EdanSafe, a CRCMining spin-off company.
Founded by the CSIRO in 2007 to commercialise the UltraBattery, Ecoult was acquired by the East Penn Manufacturing Company in 2010. The UltraBattery makes it possible to smooth out the peaks and troughs in renewable power, functioning efficiently in a state of partial charge for extended periods.
Composite materials company Quickstep was founded in 2001 to commercialise their patented manufacturing process. Working with the aerospace, automotive and defence industries, Quickstep supplies advanced carbon fibre composite panels for high technology vehicles. In 2015, the company increased its manufacturing capacity, establishing an automotive production site in Victoria in addition to their aerospace production site in NSW.
The EDV is a nanocell mechanism for delivering drugs and functional nucleic acids and can target tumours without coming into contact with normal cells, greatly reducing toxicity. Above all, the EDV therapeutic stimulates the adaptive immune response, thereby enhancing anti-tumour efficacy. More than 260 patents support the technology, developed entirely by EnGeneIC, giving the company control over its application.
Snap’s FMx is a unique approach to video surveillance that forms cameras into a network based on artificial intelligence that learns relationships between what the cameras can see. It enables advanced real-time tracking and easier compilation of video evidence. Developed at the University of Adelaide’s Australian Centre for Visual Technologies, the system is operational at customer sites in Australia, Europe and North America.
Orthocell develops innovative technologies for treating tendon, cartilage and soft tissue injuries. Its Ortho-ATI™ and Ortho-ACI™ therapies, for damaged tendons and cartilage, use the patient’s cells to assist treatments. Its latest product, CelGro™, is a collagen scaffold for soft tissue and bone regeneration.
As the demand for effective energy storage grows, RedFlow’s zinc-bromide flow batteries are gaining attention. RedFlow has outsourced its manufacturing to North America to keep up with demand, while the company’s research and development continues in Brisbane.
Since 2002, precision engineering company MiniFAB has completed more than 900 projects for customers across the globe. MiniFAB provides a complete design and manufacturing service, and has developed polymer microfluidic and microengineered devices for medical and diagnostic products, environmental monitoring, food packaging and aerospace.
RayGen’s power generation method involves an ultra high efficiency array of photovoltaic cells, which receive focused solar energy from heliostats (mirrors) that track the sun, resulting in high performance at low cost. In December 2014, RayGen and the University of New South Wales (UNSW) collaborated to produce the highest ever efficiency for the conversion of sunlight into electricity. The independently verified result of 40.4% efficiency for the advanced system is a game changer, now rivalling the performance of conventional fossil power generation.
CSL is Australia’s largest biotechnology company, employing over 14,000 people across 30 countries. The company began in 1916, when the Commonwealth Serum Laboratories was founded in Melbourne. It was incorporated in 1991, and listed on the ASX in 1994. Since that time, CSL has acquired established plasma protein maker CSL Behring, and Novartis’ influenza vaccine business, and has become a global leader in the research, manufacture and marketing of biotherapies.
Dyesol Limited (ASX: DYE) is a renewable energy supplier and leader in Perovskite Solar Cell (PSC) technology – 3rd Generation photovoltaic technology. The company’s vision is to create a viable low-cost source of electricity with the potential to disrupt the global energy supply chain and energy balance.
EvoGenix began as a startup in 2001 to commercialise EvoGene™, a powerful method of improving proteins, developed by the CSIRO and the CRC for Diagnostics. It acquired US company Absalus Inc in 2005, then merged with Australian biotechnology company Peptech in 2007, to form Arana Therapeutics. In 2009, Cephalon Inc bought the company for $207 million.
With a vision to create sustainable energy through renewable biofuels, Muradel is a joint venture between the University of Adelaide, Murdoch University and SQC Pty Ltd. Their $10.7 million Demonstration Plant converts algae and biosolids into green crude oil. Muradel has plans for upgrades to enable the sustainable production of up to 125,000 L of crude oil, and to construct a commercial plant capable of supplying over 50 megalitres of biocrude from renewable feedstocks.
iCetana’s ‘iMotionFocus’ technology employs machine learning to determine what is the ‘normal’ activity viewed by each camera in a surveillance system and alerts operators when ‘abnormal’ events occur. This enables fewer operators to monitor more cameras with greater efficiency.
Phylogica is a drug discovery service, and the owner of Phylomer® Libraries, the largest and most structurally diverse suite of natural peptides. It has worked with some of the world’s largest drug companies, including Pfizer and Roche, to uncover drug candidates.
The research compiled by Refraction was judged by a panel comprising of: Dr Peter Riddles, biotechnology expert and director on many start-up enterprises; Dr Anna Lavelle, CEO and Executive Director of AusBiotech; and Tony Peacock, Chief Executive of the Cooperative Research Centres Association. The panel considered the following: total market value, annual turnover, patents awarded and cited, funding and investment, growth year-on-year, social value, overseas expansion and major partnerships.