Wednesday 28 April 2010
Another road to commercialisation
The commercialisation of research can be achieved in several ways. To university researchers, the most common commercialisation pathway – the route to converting research into a replicable product or service that delivers value to a market - will be through either establishing a start up company or through licensing of IP into an existing company.
The Australian Government Department of Innovation, Industry, Science and Research (DIISR) Enterprise Connect program provides an alternative pathway, through its Researchers In Business (RIB) program. Enterprise Connect has committed $10 million to support collaboration between firms and researchers from universities or public research agencies, to develop a new idea with commercial potential.
Funding for up to 50 per cent of costs, to a maximum of $50,000 is provided, for engagements that last for a period of 2 to 12 months.
The intent of the program is to develop a new idea with commercial potential or to build new competencies and capabilities within a firm, and ultimately to strengthen industry engagement with the research sector.
Such commercialisation is therefore not of university-held intellectual property per se; rather, it is commercialisation through transfer of know-how and skills via human capital. The Australian Institute for Commercialisation (AIC) has argued in its work with DIISR (to define a set of relevant commercialisation metrics) that such collaborations are also important commercialisation pathways.
Recognising that such market-driven collaborations are not simple to set up, Enterprise Connect has engaged the AIC and the CSIRO to help establish linkages between firms and relevant research organisations. Over the past year, the AIC alone has assisted almost 100 firms to identify a university or other research body with the capability to meet its R&D needs through the program. However, only 20 of these have successfully formalised applications under the RIB program.
Why no more?
The main challenge might be the fact that it all takes time. Identifying and connecting SMEs to the right researchers is a time consuming process. Further compounding this is the time needed for SMEs and research organisations to work through the range of commercial and relationship issues that must be addressed in any collaboration. Each issue is potentially a relationship killer if not appropriately addressed, and each needs to be worked through in a step by step manner to enable the parties to emerge from discussions with a sound agreement to work together.
The issues include:
è Who will own the IP?
è Can the researcher publish any or all of the research output and when?
è Will the company have to pay royalties later?
è Can the parties define and agree to a very specific project scope and deliverables?
è How much time can researchers practically commit to the activity?
è Can the researchers complete the project in a timeframe that will meet the company’s needs?
è What is the contract cost?
è What is the contract costing methodology applied by the research organisations? Consulting rates or ARC Linkage rates?
è How often will the researcher/s report progress to the SME?
è What career benefit will the project bring to the researchers to warrant their time and energy?
è Will this help the commercialisation offices hit their KPIs?
è Is the transaction profitable for the research organisation, or are there other transactions that demand a higher priority?
The AIC has been much more successful in gaining program traction with some research organisations than it has with others. For instance, the University of
Of course, UQ is not the only research organisation leveraging the program. They and others are the research organisations that not only have real research capability, but are also prepared to view engagement with industry from a long-term perspective, willing to confront and address the questions raised above. These relationships also happen to be the ones that are achieving much greater contract value downstream and more effective positioning with industry. Our experience has been that the internal KPI’s of many research organisation industry engagement offices are not conducive to establishing such relationships.
It might be worthwhile checking your pipeline for pending research contract or consultancy engagements. If you’re trying to get a deal over the line, this program can possibly help. To qualify, the firm must be a taxable Australian business with turnover or expenditure of more than $1 million and under $100 million. A subsidised rate could provide just the boost you need.
If you would like to find out how the program can assist in moving forward current discussions you may be having with potential industry partners on research engagement contracts, please contact the AIC on 07 3853 5225 or alex.blauensteiner@ausicom.com .
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