It is essential for publicly funded research organisations to work well together. It is even more important that these organisations work in a manner consistent with the objectives of private enterprise. Cooperative research centers (CRCs) are failing on this front, in so far as small-to-medium enterprises (SMEs) are concerned.
While SMEs are in the best position to gain from the CRC program, they are the most likely to be overlooked. This is not a deliberate outcome of the program, but rather, the result of economics and the cost of participation.
The key priorities of an SME are to protect cash flow and to ensure that their product and services stay globally competitive. These two aims often contradict each other, as innovation requires capital for research, which small-to-medium enterprises are generally not in a position to budget for.
Clearly, one sensible function of the CRC program should be to right this anomaly.
CRCs are ideal partners to assist SMEs, because Commonwealth funding supports cooperative research activities, lessoning the financial burden of research.
So far, the CRC program has been a big success in terms of collaborative outcomes. Since it was launched in 1990 (to improve the effectiveness of Australia’s research and development effort), $7 billion in cash and in-kind have been committed to CRC research, including $1.8 billion by the Federal Government, $1.8 billion by universities, $1.3 billion by industry and almost $1 billion by CSIRO.
However, the mechanisms for participating in projects with CRCs are not well understood by SMEs. In fact, this program is still largely unknown to many, if not most, Australian companies. The cause is not one of poor communications. Rather, it is one of cost.
Most CRCs require a participation fee of around $100,000 (and upwards) per annum. This provides access to technology and the opportunity to participate in CRC projects. It is a Catch-22 that inhibits the entry of most SMEs to the CRC system – to access the publicly subsidised research, participants need to be in a position where they are not dependent on the subsidies in the first place.
One way of overcoming this dilemma is for SMEs to club together to form a consortium. This way, SMEs need only pay a fraction of the participation fee. For instance, the Smart Internet Technology CRC has launched its SME Consortium Partnership Programme to create SME consortiums in each state and territory of Australia.
In this way, it hopes to provide SMEs with access to CRC technology and allow them to participate in smaller projects. It is just one of many approaches that CRCs should be considering to broaden their effectiveness and, of course, their impact on the economic development and prosperity of Australia.
The research, technology diffusion and commercialisation activities provided by CRCs are a key contributing factor for Australia to become a top tier ‘Innovator Nation’. But the value of CRCs is limited by the extent to which there services are available.
Maybe it is time for the CRCs to reconsider their goals and structures and aim to involve companies at a broader range of development stages. It is time to unlock CRCs for SMEs.
Dr. Gautam Tendulkar is Business Development and Commercialisation Director for the Smart Internet Technology CRC.