Much of the discussion about business innovation and commercialisation in this country focuses on technology transfer and public R&D. However, it’s worth reminding ourselves that agriculture and primary industries still constitute a large proportion of Australia’s GDP. And these sectors are crying out for innovation reform too. Brian Ramsay explains the significance of the upcoming Productivity Commission inquiry into rural R&D corporations.
The Productivity Commission inquiry this year into rural research and development corporations is a pivotal review. The terms of reference are broad and the outcomes could open the door to transformational changes in how rural R&D is funded and managed.
The rural R&D model is two decades years old and has remained essentially unchanged. In this time it has served the industry and government well. However, the imperatives for reform have been building for some time.
The reform pressures flow from the fundamental changes to Australian agriculture over the past 20 years. Agricultural businesses at all levels have innovated, with supply chains consolidating and the development of alliances and collaboration to capture productivity gains and create value for consumers and for Australia.
The last 20 years have seen momentous shifts in the way information and knowledge is sourced and used by businesses. Alongside this change, the role of commercial entities in research and its commercialisation has increased. Declining government investment, internationalisation of markets and a push to integrate research more closely with commercial supply chains and businesses to achieve productivity gains have driven change.
It is increasingly obvious that conventional approaches to research, extension and adoption are of declining relevance. Research in some rural industries has shown that traditional sources of information are at best reaching and providing useful information to only 25% of the potential audience. In those industries, the commercial allied services and supply chain businesses are now the significant information source for over 75 percent of farmers. Government funded R&D must demonstrate productive relationships with commercial innovators to remain relevant.
Knowledge has become globalised over the past 20 years and progressive businesses maintain international networks as sources of information for decisions. Government funded R&D has to be similarly tapped into developments overseas.
The need for a lift in the performance of the R&D model is recognised by levy payers and reflected in surveys that measure levels of satisfaction. Interestingly, the issue is not so much a lack of commitment to investing in research, but concerns about how effectively knowledge is being translated into business value. While the political debate usually centres on levels of funding available to researchers, the need is for a fundamental shift in emphasis towards investing for the application of research by businesses.
The prospect of change and reform is unsettling — especially for those directly affected. The natural tendency is to seek to preserve the status quo, though it is a high-risk approach when seeking different outcomes. Groups with the most vested interests in the current system can be expected to be most vocal. However, the rural R&D model is no more insulated from change and innovation than are the businesses that make up the modern, internationalised agricultural industry. The opportunity ahead is to help shape the changes required to take rural R&D to the next level. It should be embraced by all.
It is too early to predict what that future model should be. What is evident are the genuine needs for change and the opportunities for innovation to achieve better outcomes.
I can envisage a new model emerging that is more collaborative, more business-oriented, more globally integrated, more focused on application of knowledge and more needed and valued by Australian businesses and the community.
Only after looking at the best ways to achieve these outcomes can we identify future structures and required funding levels.
Brian Ramsay is Managing Director of Inovact Consulting, a specialist advisor to industry, government, research agencies and commercial clients. He was formerly CEO of the rural R&D company Australian Pork Ltd.