Australia's Economic Accelerator to fund priority research

By Lauren Davis
Thursday, 03 February, 2022

Australia's Economic Accelerator to fund priority research

Prime Minister Scott Morrison has announced the launch of Australia’s Economic Accelerator (AEA) — a $1.6 billion program that aims to create world-beating businesses from the country’s leading research.

The AEA features as part of a $2.2 billion package to focus the commercialisation of the six National Manufacturing Priority areas — resources and critical minerals; food and beverage; medical products; recycling and clean energy; defence; and space — bringing the country’s brightest business and academic minds together.

Together with a $150 million expansion of CSIRO’s Main Sequence Ventures program — an expansion which is designed to back start-up companies and help create commercial opportunities from Australian research — it is hoped that the AEA will reshape research funding to emphasise projects with high potential for commercialisation that are directed at National Manufacturing Priorities and industry engagement.

Prime Minister Scott Morrison said the AEA would invest in projects as they progressed through the stages of their development, driving universities and businesses to work hand in glove through these stages to prove projects’ viability and potential.

“This is about funding projects to bridge the ‘valley of death’ where early-stage research is often not progressed due to higher levels of risk and uncertainty,” the Prime Minister said.

“Expanding the CSIRO’s Main Sequence Ventures program then takes this further, incentivising the additional venture capital investment support needed to progress innovative new products and technologies through to market to become the new businesses and employers of the future.”

Acting Minister for Education and Youth Stuart Robert said the AEA would boost investment in two critical stages of experimental development: proof of concept and proof of scale. The program will start with a big range of contenders, he explained — but as it progresses to stage two, the number of applicants will diminish and the value of the funding to each will increase.

“For example, stage one will involve nearly 100 grants a year of up to $500,000. Recipients will be required to engage industry through in-kind support or even co-location,” Robert said.

“In order to be one of the 36 recipients attracting up to $5 million in funding as part of ‘stage two’ projects, industry will need to put more skin in the game with a 50% co-investment.

“At stage three, up to 50 companies will be supported through the Main Sequence Venture, where we are providing $150 million in two successive co-investment funds.”

Robert said the government would also invest $296 million in industry-focused PhDs and fellowships to support its research commercialisation goals and drive greater university-industry collaboration.

“This new scheme will generate 1800 industry PhDs and over 800 industry fellows over 10 years to fundamentally reshape the workforce of Australia’s universities,” Robert said.

“PhD students will benefit from the experience of undertaking research within industry settings, creating employment pathways beyond academic roles.

“Industry will benefit from the opportunities to host PhD students, bolstering their ability to harness ideas and concepts for innovation, as well as to open the pathway to the recruitment of high-calibre graduates. This will be further enhanced by a new suite of ARC Fellowships that will recognise and reward our academics who collaborate with industry, helping to drive the translation of their research, creating new pathways for their work.”

Science & Technology Australia (STA) has responded favourably to the news, having in recent years called for Australia to create a new Research Translation Fund that would deliver strong returns on investment to the nation.

“This new research commercialisation fund is an exciting development,” said STA President Professor Mark Hutchinson. “We see vast potential for it to ‘level up’ Australia research commercialisation success, and generate stronger returns on investment for the nation from our world-leading research.

“Australia has a wealth of talent, ideas and expertise in research breakthroughs. But for too long, the country has lacked the support and infrastructure for more of our research to bridge the valley of death between research and commercialisation.

“Australia’s Economic Accelerator will offer seed capital for more research to be taken to proof of concept and prototype to attract further capital from the private sector, and enable more products to be made in Australia.

“It offers the possibility of turbocharging Australia’s research commercialisation by giving researchers support to ‘lean in’ to business, and helping business ‘lean in’ to the brilliant talent pool of scientists in this country.”

The Australian Academy of Technology and Engineering (ATSE) has also welcomed the announcement, with President Professor Hugh Bradlow saying it will play an important role in transforming early-stage research into commercial success.

“We applaud the government’s recognition that we need a new breed of research entrepreneur,” Prof Bradlow said. “Research commercialisation will be an essential cog needed for a technology-powered, human-driven future which builds Australian sovereign capabilities, provides skills and creates jobs.

“The Academy looks forward to working with the federal government to ensure the fund builds on Australia’s research strengths and is eager to see a long-term implementation and coordination plan which leverages the diversity of our research sector and our areas of advantage as outlined in the government’s manufacturing priorities.”

Prof Bradlow said ATSE is eager to ensure the fund helps increase industry’s appetite to develop new ideas, while acknowledging that it is also important not to neglect curiosity-driven research which creates the ideas for new commercial opportunities. The latter point has been echoed by the National Tertiary Education Union (NTEU), with National President Dr Alison Barnes saying not all publicly funded research should require immediate commercial application.

“Research teams are rightly advancing human knowledge in pure sciences, social sciences and other fields without bias towards potential for-profit applications of such knowledge, which are largely unknowable in advance,” Dr Barnes said.

Furthermore, while the NTEU welcomes any additional public investment in research, Dr Barnes claims the new funding does not come close to the amount of money pulled out of research over the past decade. Over the past nine years, she said, the Coalition has cut $1.47 billion from the Australian Research Council (ARC) alone while systematically reducing levels of funding for research.

“Over the same period, the Morrison government has pulled $10 billion from the Commonwealth Grant Scheme and funding per student place in our universities will fall around 14% under the recent Jobs Ready Graduate cuts,” Dr Barnes said.

“This money is now being redirected towards the commercialisation of research in particular industries hand-picked by the Coalition.

“The Morrison government has also interfered directly with the ARC’s competitive peer-review grants process to block funding for approved projects it doesn’t like and the Acting Minister for Education and Youth has directed the ARC to appoint industry-based non-experts to the College of Experts who assess grant applications.

“Research decisions must be made by independent peer reviewers at arm’s length from government and free from interference or influence.”

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