As the Strategic Examination of R&D (SERD) wraps up, it's confirmed what we've known for decades: Australia struggles to connect industry with researchers to generate and commercialise valuable IP. We rank third globally in highly cited research but dead last among OECD countries for industry-research collaboration. US universities co-author nine times as many publications with industry partners as their Australian counterparts.
This isn't about commercialising existing IP — that's a separate, possibly even larger, challenge. This is about the earlier, crucial step: businesses and researchers working together to create new knowledge and IP in the first place. The connection matters because collaboration drives commercialisation outcomes. Australia ranks fourth in research quality but only 20th in firms introducing new-to-market product innovations among OECD countries. Our universities earn just 3% of research income from commercialisation — the lowest among comparable nations. When industry and researchers don't collaborate to generate IP together, there's less IP positioned for commercial success.
Australian Industry Group's response to SERD reinforces what our members tell us: we need clearer pathways to collaborate with universities on R&D. Having recently discussed these challenges at Parliament House as a guest of the GO8, I wanted to share practical advice for SMEs considering their first university collaboration.
Not every R&D challenge needs collaboration with a Public Sector Research Organisation (PSRO) (university, CSIRO etc). Work backwards from your commercialisation strategy first: how will you leverage any IP created? PSROs excel when you're pursuing breakthrough innovation requiring cutting-edge expertise and access to specialised infrastructure—synchrotrons, high-performance computing, advanced microscopy; that simply doesn't exist commercially. If you're refining existing processes, an engineering consultant might be perfect. If you're fundamentally reimagining how something works, that's when PSRO’s shine.
Never engaged with a PSRO before? Think of it like dating — you wouldn't propose marriage on a first date, so don't start with a massive, complex research project.
Research shows collaborative barriers can be overcome by starting with smaller projects and gradually increasing complexity. Begin with low-risk engagements: attend industry seminars, ‘research in the pub’ networking events, innovation showcases or open days. These help you discover local expertise and meet researchers informally, especially valuable in regional areas where universities are often keen to build industry connections.
When you're ready for a first project, keep it modest — about $50,000 or slightly more. Use the R&D Tax Incentive to defray costs. This allows both parties to learn how to work together, understand each other's expectations around IP and timeframes and build trust. The Higher Education Research Commercialisation IP Framework has accelerated agreement templates designed for lower-risk projects, streamlining what can otherwise take up to eight months to negotiate.
Before approaching any institution, do your homework. IP policies vary dramatically — some PSROs have standardised, business-friendly agreements, while others negotiate case by case. Some want ownership, others prefer licensing. Getting this wrong kills promising collaborations fast. Understand their focus; some have strong industry engagement offices, others prioritise fundamental research. Match your needs with their strengths, and find researchers with demonstrated industry engagement track records.
Researchers love solving intellectual challenges but focus on publishing papers and securing multi-year competitive grants that advance their careers. They're not consultants. Remember, too, that R&D is inherently risky and may not deliver the outcomes you envisioned. Researchers also face pressure from funding agencies for open access publication, which can conflict with your need to delay publication for patent protection.
Businesses need competitive marketplace advantages and want to leverage any IP created quickly, operating on commercial timeframes with real pressure to deliver returns.
Neither perspective is wrong — they're different. Success comes when both parties understand each other's drivers. Starting small gives you space to work through these differences on a manageable scale.
SERD's proposed reforms — including a national IP library, streamlined processes and reformed incentives recognising industry engagement — will hopefully help create better system-level conditions. But we must learn from what worked. The now defunct Innovation Connections program proved facilitation matters.
For SMEs considering their first university engagement — attend that research showcase, contact your industry association for support or reach out to your local university's industry liaison office. When you're ready for a project, start small — date before you get married. With the right preparation, support and a modest first collaboration, the path from research partnership to valuable IP that reaches the market becomes much clearer.
That's where real innovation happens — in the challenging work of generating new knowledge together, made possible by people who bridge two different worlds — and by relationships built gradually, one successful project at a time.
New ARC Advisory Committee announced | Australian Research Council
David is Director of Emerging Industries and Innovation at Australian Industry Group.
He has been part of Australia’s innovation ecosystem for more than 15 years and has worked at the executive level across multiple industries in large and small organisations to facilitate innovative solutions to complex problems.
David has maximised opportunities for Australian industry in $88 billion of major projects, delivered financial assistance of more than $22 million to innovative SMEs and pulled together over 150 commercially astute leading-edge research/industry collaborations that have resulted in novel technology and jobs of the future.
