Department of Education, Science

and Training

Evaluation of the
Cooperative Research
Centres Programme

July 2003
Howard Partners Pty Ltd
Unit 13, Macquarie Court, 26 Macquarie Street, Barton, ACT, 2600.
PO Box 4090, Manuka, ACT, 2603.
Tel: 02 6273 5222; Fax: 02 6273 4888.
www.howardpartners.com.au
Evaluation of the CRC Programme 2003

Contents
Report Summary......................................................................................................................... i
List of Recommendations....................................................................................................... xxi

Part I: Report on Programme Effectiveness, Efficiency and Flexibility ................................... 1

1: The CRC Programme - Objectives and Profile................................................................. 3
2: CRCs and their Current Operating Environment.............................................................12
3: General Views on the Success of the CRC Programme ..................................................20
4: Identifying and Defining CRC Outcomes .......................................................................41
5: Research Outputs and Outcomes .....................................................................................54
6: Education Outputs and Outcomes....................................................................................61
7: Commercialisation/Technology Transfer Outputs and Outcomes...................................65
8: Collaboration Outputs and Outcomes..............................................................................77
9: CRC Administration, Management and Governance ......................................................87
10: Programme Management and Administration.............................................................94
11: Emerging Issues ........................................................................................................104
12: Conclusion.................................................................................................................108

Part II: A Focus on the Future: The CRC Programme within the Broader Science and
Innovation System..................................................................................................................109
1: Introduction....................................................................................................................111
2: The Changing Institutional Framework for Cooperative and Collaborative Industrial
Research .................................................................................................................................112
3: Related Policies and Initiatives to Promote Public-Private Industrial Research
Collaboration ..........................................................................................................................124
4: Future Directions for the CRC Programme ...................................................................133
5: The Clarity and Appropriateness of the Current CRC Objectives.................................142
6: CRC Selection Criteria and Procedures.........................................................................154
7: Implementation ..............................................................................................................159
8: Funding and Accountability Arrangements ...................................................................169
9: Other matters .................................................................................................................173

Attachments............................................................................................................................177
1: Terms of Reference........................................................................................................179
2: Approach to the Project .................................................................................................182
3: Submissions Received ...................................................................................................189
4: People and Organisations Consulted .............................................................................190
5: Project Management ......................................................................................................195
6: References......................................................................................................................197
Evaluation of the CRC Programme 2003

List of Figures

Figure 1: Examples of CRC Successes Referred to in CRC Publications and Promotional

Material.......................................................................................................................... xix
Figure 2: Evolution of the CRC Programme ............................................................................. 6
Figure 3: Sample of CRC Achievements .................................................................................49
Figure 4: Examples of CRC Collaborations in the Asian Region ............................................84
Figure 5: CRC Programme Documentation .............................................................................94
Figure 6: The Selection Criteria for the 2002 Round ...............................................................96
Figure 7: CRC Application Assessment and Selection Process ...............................................97
Figure 8: Closed vs. Open Innovation ....................................................................................116
Figure 9: Features of Collaboration Relationships .................................................................121
Figure 10: Comparing the CRC Programme with the ARC Centres of Excellence ...............125
Figure 11: University-industry Relationships without Public Programme Support ...............131
Figure 12: Trajectories in the Evolution of the CRC System.................................................134
Figure 13: Directions and Constraints Contained in Programme Selection Criteria..............148
Figure 14: Proposed CRC Objectives.....................................................................................151
Evaluation of the CRC Programme 2003

Report Summary

Australia must match the technology push provided by its strong research base with
the demand pull of industry and other research users.
Minster for Science, announcing the first 15 CRCs, 14 March 1991.

Introduction
This is a Report of an Evaluation of the efficiency and effectiveness of the CRC
Programme and an assessment of the clarity and appropriateness of the current CRC
objectives as the Programme evolves. It is an evaluation of the Programme as a whole
– not of individual CRCs.
The CRC Programme was established in 1990 with a purpose to “match the technol-
ogy push provided by [Australia’s] strong research base with the demand pull of
industry and other research users”.1 The first 15 CRCs were announced in March
1991. A further 108 CRCs were approved over the ensuing 10 years, including 39
applications for renewal. In December 2002 a further 22 CRCs were approved; these
are due to commence in July 2003.
Up until end June 2002 the Commonwealth, through CRC Programme funds, had
contributed $1.15 billion to the CRC Programme. Industry and other participants had
contributed a further $680m giving a total level of cash placed with CRCs of $1.83
billion. This contribution has been supplemented by $2.73 billion in “in kind”
contributions, giving a total level of funding of $4.56 billion.
The CRC Programme is primarily an industrial research programme that supports
industry and business development across a broad range of sectors, including agricul-
ture, fishing and forestry, information and communications, mining, manufacturing,
energy, health care, water services, transport and construction. The Programme also
delivers outcomes in relation to resource sustainability, particularly in the context of
the conservation, repair and replenishment of the nation’s “natural capital” and the
maintenance of biodiversity. In addition, the Programme supports social outcomes
through the promotion of public and environmental health.
The arguments for public involvement in industrial research are well rehearsed and it
is not proposed to restate them in this Evaluation. The point is that publicly supported
collaborative research can deliver substantial benefits to the economy, industry, and
the community over the longer term through the creation and application of knowl-
edge that enhances international competitiveness through the introduction of innova-
tive processes and practices, and facilitates the creation of new businesses built
around the commercialisation of research.
The CRC Programme also addresses a market failure, particularly in environmental
research, but also in agricultural research, that enables more attention to be given to
the application of knowledge to reverse environmental degradation and biodiversity
loss than would otherwise be the case.

1
Minster for Science, announcing the first 15 CRCs, 14 March 1991 (emphasis added).

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Evaluation of the CRC Programme 2003

The CRC Programme is distinguished from a range of other public programmes

designed to foster closer links between research users and research providers by the
size of the Commonwealth payment – ranging from $12m to $30m – and the time-
frame of commitment – typically seven years. The Programme also differs in that it
requires the formation of a managed relationship between CRC participants in the
form of a formal joint venture partnership. This differs from the gift-based (or
unrequited) relationships that underlie many other research grant programmes.
There has been a profound change in Australia’s research and innovation culture since
the Programme was introduced. There has been, for example:
A widespread recognition of the role of public-private research partnerships,
based on the generation and utilisation of “applicable knowledge”, in industrial
innovation.
In the context of the “knowledge economy”, an acceptance of a role for the
public sector in supporting new business development through the commerciali-
sation of publicly funded research.
A greater understanding of the contribution of science to the design and imple-
mentation of public programmes, particularly relating to the environment and
public health.
The emergence of public-private research partnerships reflects a fundamental change
in the way in which knowledge is generated and applied as well as changes in ap-
proaches to the management of industrial research and development. The CRC
Programme sits well in the developing system of industrial research built around the
production of “knowledge in application”, or "applicable" knowledge.2
Research commercialisation has come into prominence with a realisation of the
potential for the creation of new businesses based on knowledge assets. During the
late 1990s venture capital came to be recognised as an asset class specifically de-
signed to invest in these businesses. Moreover, the application of science in public
programmes ensures that interventions are well directed and that there is a relation-
ship between action and outcome.
To accommodate these changes it has been necessary to develop a capacity to carry
out partnership-based research and innovation, business development based on
research commercialisation, and for scientists to engage in public programme design
and delivery. The CRC Programme has been an important contributor to that capac-
ity building.
The CRC Programme, which started as a “bottom up” collaborative venture between
researchers provided a strong basis for developing trust-based relationships between
organisations. With increasing internal resource constraints and the need to set
priorities, the Programme has now moved to the next level where collaboration
between universities, publicly funded research agencies, business and government is
being approached at a more strategic level. Moreover, with greater interest in returns

2
See Michael Gibbons and others, The New Production of Knowledge: The Dynamics of Science and Research in Contemporary
Societies (London: Sage, 1994), Michael Gibbons, "Higher Education Relevance in the 21st Century," in UNESCO World
Conference on Higher Education (Paris: World Bank, 1998)

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Evaluation of the CRC Programme 2003

from Intellectual Property and commercial activity the management of a research joint
venture is now a much more critical issue.
The CRC Programme has been reviewed several times over its lifetime. In comment-
ing on these reviews, the Australian Chamber of Commerce and Industry (ACCI)
concluded that the Programme is an extremely effective policy instrument, which has
been recognised around the world for fostering collaboration between industry and
researchers. Discussions and consultations during the Evaluation confirmed that
most stakeholders agree with this sentiment. This has been a vanguard Programme
that has tried to do new things in new ways. It has attracted international attention
and has become one of the notable features on Australia’s distinctive science and
innovation landscape.
At the same time, however, CRC participants and stakeholders agree that it is now
necessary for government to act decisively to build upon the strengths of the Pro-
gramme and to adapt to some of the recent developments in the industrial research
and the research commercialisation framework. There are criticisms, but these are
generally sympathetic criticisms from those who stand to benefit from a more efficient
and effective CRC Programme.
There was a view expressed by many stakeholders, particularly those in the private
sector, that the Programme had been too focussed on research with an insufficient
emphasis upon meeting industry and other end-user needs through attention to adop-
tion and application of research results. Some, but by no means all, of this criticism is
justified. It is in this context that the Evaluation recommends that the Programme
should be clearly positioned as an “investment” vehicle in which research is seen as a
means to an end (“an end use”), not an end in itself.
Consistent with the trends in research and innovation culture, the Evaluation finds that
three distinct types of CRC have evolved with the implementation of the CRC Pro-
gramme:
1. The delivery of national benefits, predominantly in relation to the conservation,
repair and replenishment of Australia’s natural capital, maintenance of biodiversity
and promotion of public and environmental health.3
CRCs that operate on these lines have a strong focus on resource sustainability.
2. The delivery of collective industry benefits through the creation of applicable
knowledge to improve and/or enhance industry performance in the light of global
competition and demands for increased quality.
These outputs are delivered through what are effectively public-private industrial
research partnerships, or industrial research collaborations and have a strong focus
on industry performance improvement.
3. The delivery of commercial benefits through the expansion and creation of new
businesses based on the transfer and/or sale of intellectual property rights and re-
flected in new products and services.
CRCs that operate on these lines have a strong focus on business development and
research commercialisation.

3
Natural capital refers to the stock of productive soil, freshwater, vegetation, clean air, ocean and other resources that underpin
the survival, health and prosperity of human communities.

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Evaluation of the CRC Programme 2003

The categories are not, of course, mutually exclusive. Commercial benefit, through
the establishment of new businesses, has been realised in many national benefit and
collective industry benefit CRCs. Substantial income streams have been realised
through technology licensing and product marketing.
An estimate of the distribution of resources within the CRC Programme among these
categories at four yearly intervals is indicated in Table 1.
Table 1: Distribution of CRC Expenditure within the CRC Programme
1993/1994 1997/1998 2001/2002
National Benefits 14.0 16.0 20.1
Collective Industry Benefits 64.5 61.2 60.2
Business Development 21.6 22.8 19.8
100.0 100.0 100.0

The data suggest that there has been a discernible trend towards a greater emphasis on
national benefit CRCs over the life of the programme. Within each of these trajecto-
ries the Programme has recorded some major achievements. Some of these are listed
in Figure 1 on page xix.
The increasing role of national benefit CRCs reflects the “demand pull” of research
users involved in the application of scientific knowledge for resource sustainability.
These include, predominantly, Government agencies involved in natural resource
management, bio diversity and, more recently, biosecurity. In the area of collective
industry benefit the CRC Programme has had a major impact in mature industries that
have strong leadership, a production orientation, and a focus on global markets and
international competitiveness. Collaboration tends to be “pre-competitive” and
strongly directed towards innovation in industrial processes and business practices.
For businesses that are more strongly consumer oriented, where innovation is under-
taken close to market in the form of rapid product re-development, design, and brand
recognition, research collaboration tends to be approached on a single provider
contract basis and working outside the collective approach of the CRC model. The
level of involvement in the CRC Programme of companies in the “fast moving
consumer goods”4 sector, for example, is not high. These companies do, however,
look beyond their boundaries for help with innovation – to customers, research
companies, business partners and universities.5
During the 1990s companies that were traditionally production oriented have had to
become much more consumer-oriented as a result of policy, regulatory and market
changes that stimulated competition. Confronted with demands for increased share-
holder value, and rejection of a “not-invented-here” culture, many of these companies
have scaled back their internal R&D effort and now look to research collaboration and
strategic alliances to source innovation. These arrangements can be established on a
joint venture (managed) relationship or a purchaser-provider (market oriented)
relationship. CRCs are essentially managed relationships.

4
These companies include food processing, consumer electronics, consumer durables and some business products, where speed
to market and continuous innovation in product development and presentation are major business drivers.
5
A recent US study estimates that some retail companies source 90 percent of their innovation from external sources. The
average for all firms in the study was 45 percent. See Jane C Linder, Sirkka Jarvenpaa, and Thomas Davenport, "Toward an
Open Sourcing Strategy," Sloan Management Review 44, no. 4 (2003)

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Evaluation of the CRC Programme 2003

Companies that acquire R&D externally would like CRCs to undertake problem
oriented research and often seek to negotiate contracts with specified researchers
within the CRC (a form of market relationship). Reflecting this trend, some CRCs are
evolving into “industrial research institutes” with substantial income from contract
research. CRCs that create new businesses, in the form of “start-up” technology
based companies, also address this emerging demand for sourcing industrial innova-
tion by creating “options” for acquisition by technology intensive companies. This
trend is associated with growing public policy interest in the commercialisation of
publicly funded research.
CRCs have performed a vitally important role in transforming publicly funded
discoveries and inventions into products and businesses that are “investment ready”.
A major challenge for current and potential CRCs is locating and connecting with
companies prepared to be involved in the development and adoption of disruptive
technologies. Venture capital seed investors are performing an important role by
assisting with the creation and building of new “start-up” businesses based on these
technologies. The shortage of seed and pre-seed funds is, however, a matter of major
concern.
There is a number of “single user” CRCs based on both product development and
business development in areas of new and emerging technologies, particularly in
health care and medical devices. Many of these companies have been supported by
venture capital investment.
The changes in structural conditions referred to above provide a clear indication of
how the Programme can be strengthened in the future.
With that in mind, the Evaluation Team has no reservation about recommending that
the Programme continue, albeit with modifications to objectives, design features and
implementation arrangements. These changes will result in a more targeted and
effective arrangement for industrial research collaborations and CRCs based on
creating businesses through the commercialisation of discoveries and inventions in
universities and public research organisations.
This Evaluation addresses the following principal questions:
Do the Programme’s outputs and outcomes demonstrate that it has been effective in meeting its
objectives?
Do the administrative arrangements for the Programme enable it to be delivered as efficiently
and flexibly as possible?
Do the Programme’s objectives and key design features provide a clear and appropriate
framework for achieving successful outcomes within the broader Australian science and innova-
tion system in the medium and longer term?
Are any changes needed to the objectives to strengthen the Programme in future and what
implications would they have for Programme design and change management?

The Terms of Reference include a number of specific questions and issues to address
in the Evaluation. The detailed Terms of Reference are located at Attachment 1. To
address the Terms of Reference, the Evaluation was approached on a number of
fronts:

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Evaluation of the CRC Programme 2003

Analysis of existing documentary material and data collected by AusIndustry and the Depart-
ment of Education, Science and Training in relation to the management of the Programme.6
Research and analysis in relation to the role of cooperative research in national innovation
systems and the increasing significance of that role.
A very wide process of consultations with all categories of CRC stakeholder. Consultations
included -
- Approximately 100 one-on-one interviews with industry associations, business
leaders, government departments and agencies, research organisations, university
research managers and CRC senior managers.
- A series of six workshops in each mainland capital city.
- Submission of written comments in response to written invitations.
- Attendance at meetings of Deputy Vice Chancellors and the Conference of the
CRC Association.
A structured questionnaire and Outcomes Survey managed by Orima Research to quantify
opinion related to Programme outcomes.

The methodology is described in detail in Attachment 2.

The answers to each of the principal Evaluation questions, and to the subsidiary issues
raised by the Terms of Reference are set out below. The body of the Report provides
more material and supporting detail in relation to the findings reported.

Programme Effectiveness
In general terms, the CRC Programme’s outputs and outcomes demonstrate that it has
made substantial progress towards achieving its objective under the current design
strategy.
There are areas of great strength, associated with the existence of strong established
industry partners (such as in the mining, energy, agriculture and water sectors). There
are also areas of strength in emerging technologies in which new businesses have
been created as a result of the existence of the CRC and in providing ‘public good’
outcomes.
Responses to specific issues raised in the Terms of Reference documentation in
relation to Programme effectiveness are as follows.

Contributing to Australia’s economic growth, social well-being and environmental

outcomes
In addressing this issue it is useful to draw a distinction between improving the
capacity to carry out partnership-based research and innovation and how effectively
this capacity has been used. Australia’s overall capacity to carry out partnership-
based industrial research and innovation has improved by virtue of “learning-by-
doing” and “creation of knowledge in application” built around innovation at the
interdisciplinary interface.
The CRC Programme has contributed to these developments, but as part of a more
general trend. Consequently, the main return on the Commonwealth’s investment in

6
The CRC Programme was managed by AusIndustry in the Department of Industry, Science and Resources until late 2001 when
responsibility was transferred to the Department of Education, Science and Training.

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Evaluation of the CRC Programme 2003

the CRC Programme lies in its contribution to this improved capacity to carry out
partnership work in the overall science and innovation system.
Data from the Outcomes Survey, undertaken as part of the Evaluation, indicates that
research outputs have been implemented and are expected to lead to economic and
environmental benefits. Quantification of benefits, however, is difficult in the ab-
sence of a market transaction between research findings and end user application.
This occurs particularly where research is applied in the form of improved environ-
mental management or in improved industrial practices and processes, as in the
mining and agriculture sectors.
Some CRCs have undertaken economic assessments, but these are not reported
consistently. For example, the Australian Petroleum CRC reports that an independent
economic analysis identified a net present value in excess of $300m from an $8m
CRC investment.
The potential for substantial national economic benefits is generally reported by
CRCs as being high, but demonstrated actual benefits are a little more difficult to
come by. That said, the focus of the CRC Programme is on long-term research, and
truly groundbreaking research may take many years to result in application. For
example, examination of CRC individual Reports and submissions indicates:
The CRC for Clean Power from Lignite estimates that implementation of the
Centre’s MTE technology for coal dewatering in existing Latrobe Valley power
stations would save 15 million tonnes of CO2 emissions per annum; at the ex-
pected range of emissions trading values this would amount to between $150m -
$450m per annum (implementation costs are estimated to be $75m per annum).
The CRC for Sustainable Production Forestry reports a potential pay-off of
$194m from research leading to the improvement of genetic potential for euca-
lyptus from hardwood plantations.
The CRC for Eye Research and Technology, which has developed a new type of
contact lens that can be worn continuously for up to 30 days, and is now worn
by more than 400,000 people, reports an enormous potential market among the
95 million people in the world wearing contact lenses.
The issue here is the capacity to realise potential economic, social and environment
benefits through application and adoption by end users. At this stage, it may be too
early to translate the potential benefits into application and adoption.
The difference between potential benefit and realisable benefit is reflected in the
results of the Outcomes Survey, which indicates a substantial gap between the re-
search user and CRC Manager views on research impacts. This is indicated in Table
2.

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Evaluation of the CRC Programme 2003

Table 2: Performance indicators: CRC research user and research provider views of research
impact
Views concerning extent to which CRC research has impacted on Research User7 CRC Manager 8
Rating High or Very Rating High or Very
High (%) High (%)
Accelerating or improving existing research projects 48 74
Stimulating new research projects 48 78
Contributing to the development of IP 24 72
Introduction of new/improved products, processes 24 80
Improving business/industry profitability 28 64

The lower expectations of research users in relation to CRC research impact is also
reflective of other motivations to be involved in a CRC – such as early warning and
awareness on the development of new science and technologies and access to research
students. It may also reflect an expectation and an understanding on the part of CRC
Managers that adoption will occur in the form of new business relationships inde-
pendently of the research users involved in the CRC (for example, commercialisation
through licenses and start-up companies).
Data that allows the outputs generated by CRCs to be related to national outcomes is
scarce and does not feature in the set of data collected by the Department of Educa-
tion, Science and Training through the Management Data Questionnaire (MDQ).
This issue highlights a main theme to arise from this Evaluation.
If technology-push is to be linked to demand-pull then the generation
of the capacity to form and effectively manage partnerships with this
end in mind is a necessary but not a sufficient condition for innovation
and end-use to take place.
The sufficient condition is that there must be investment in, detailed
planning and knowledge of, the process that translates specific initia-
tives to innovate and to adopt into actual outcomes.
The extent to which research is implemented in processes, products and public
programmes varies considerably across CRCs.

Developing Australia’s public and private research capacity in the areas of national
need or global opportunity
The Evaluation has found that the CRC Programme has made a major contribution to
the development of Australia’s public sector research capacity in areas of national
need and global opportunity.
The environmental CRCs have not only carried out important and useful
research on Australia’s (often unique) environmental challenges, they are also
viewed as having taken on a de-facto role in coordinating environmentally ori-
ented research. Other CRCs have led the way in developing new technologies
and in facilitating the commercialisation of these technologies.
The agriculture CRCs have made substantial contributions to animal and plant
production methods and processes that increase industry productivity and com-
petitiveness in global markets as well as enhancing sustainability.

7
Research users were asked about how CRC research has impacted on them.
8
The sample included Managers in “public benefit” CRCs

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Evaluation of the CRC Programme 2003

The high technology manufacturing CRCs have developed and applied material
sciences for the aerospace industry and developed techniques for joining mate-
rial with specialised welding techniques.
The life sciences CRCs have been associated with biotechnology based drug
discovery, and medical devices CRCs have been very successful in developing
and marketing hearing implants and contact lenses.
In information and communications technologies (ICT), the Photonics CRC has
developed a range of communications technologies for which it has worldwide
patents, and the Signals Processing CRC has created a number of radar related
inventions.
The impact on private sector research capacity in general manufacturing is viewed as
being less pronounced. This reflects in large part the relatively low level of commit-
ment to industrial research in this sector.
Data from the Outcomes Survey provides an insight into a number of aspects of
research capacity and capability. Seventy two percent of research users were either
satisfied or highly satisfied with the way in which CRCs had facilitated access to
facilities and equipment within the CRC environment, 72 percent with the way in
which CRCs had built trust and confidence with the research community, and 76
percent with the contribution of the Programme to undertaking long term research.
There are, however, aspects of the Programme that limit the participation of small to
medium businesses - particularly those in the category of new technology based firms
(NTBFs) where established industry partners are either absent or unwilling to partici-
pate in a CRC. In this area, a business is quite often the outcome of research.

Producing research of an excellent standard that would not have been undertaken
otherwise
This is a complex question to answer because of the degree of diversity within the
CRC portfolio. On the one hand, the industry view that the Programme has become
far too ‘researcher’ oriented suggests that the additionality of the CRC Programme
may be relatively low from this end-user perspective. In this view, much CRC re-
search might also have been possible using research funding from other sources.
On the other hand, CRCs are a vehicle for excellent research of relevance to potential
end-users. In those cases where this system works well, the additionality of the CRC
Programme in terms of research excellence of relevance is high. This tends to be
associated with situations in which industry and government are able and willing to
work in partnership with researchers (as in medical science and the environment).
Data from the Outcomes Survey indicated a very high level of user satisfaction with
CRCs in relation to research scope, quality and relevance. Seventy two percent of
research users were either satisfied or very satisfied with the scope of projects cov-
ered, 80 percent with the technical quality of the research, 76 percent with the innova-
tion quality of the research, 56 percent with the relevance of the research to user needs
and 68 percent to Australia’s long term needs.

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Evaluation of the CRC Programme 2003

Adding to the nation’s intellectual property and its commercialisation or utilisation

According to the MDQ database the CRCs currently maintain 114 Australian patents
together with patent applications being processed. They maintain 549 overseas patents
together with patent applications being processed. The preference for patenting
overseas indicates that a global perspective is being adopted (and reflects good-
practice in IP management strategies).
The level of patenting is not, however, very large given the overall scale of industrial
research activities. The revenue stream from technology agreements between 1991-
92 and 2000-01 is reported in the Department’s database as $32m. However, income
from this source has increased markedly in recent years and was reported as $7.7m in
2001-02.
The revenue from sales of CRC created start-up companies has been reported at
$30.4m for the 2001-02. However, the projected sales of these companies is just
under $1 billion, although the time frame for realisation is not clear.
Over the period 1998 to 2002 the total CRC allocation of cash resources to commer-
cialisation/technology transfer and external communication averaged 13.6 percent of
total cash commitments (and 9.9 percent of total cash and in-kind resource commit-
ments). In contrast, 66.9 percent of cash resources were devoted to research (75.3
percent when cash and in-kind resources are combined).
Taken on face value these resource allocations support the view that the dominant
focus of the CRC Programme has been on research and not upon commercialising and
utilising intellectual property.

Enhancing collaboration among public and private researchers, and between public
researchers and commercial or community interest
The capacity to collaborate largely resides in the cohorts of researchers who have
passed through the CRC system. Their experience and training has exposed them to
knowledge in different disciplines and sectors. It has also exposed them to a greater
diversity of research problems than would otherwise have been the case.
Information from the Department of Education, Science and Training CRC Pro-
gramme database indicates that there are 749 core participant organisations in the
currently active CRCs. The distribution is: industry, 38 percent; universities, 30
percent; government, 28 percent; research institutes, four percent. There is a further
226 participants in a supporting role. Sixty one percent of these are from industry, 11
percent from universities and 14 percent from Government.
The enhanced capacity for inter-disciplinary and inter-sectoral work allows comple-
mentary intellectual assets to be brought together to do new things in new ways. This
is the foundation both for leading-edge research and for successful innovation. It is
also the most difficult outcome to quantify.
The Outcomes Survey provided very positive indications in relation to collaboration.
In relation to specific outcomes, about half of the research users indicated that they
obtained a high or very high level of value from the collaboration. It would appear
that the CRC arrangements are regarded highly for the networking activities and
opportunities of the researchers.

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Evaluation of the CRC Programme 2003

One issue that has emerged in recent years relates to the strategies of the large re-
search-performing organisations (the research universities and the major Common-
wealth research agencies). These organisations are reported to have adopted more
strategic approaches to CRC involvement as the Programme has matured. This
involves a greater ‘top-down’ influence on the nature and extent of involvement based
upon alignment with the organisation’s own strategic objectives.
The result is that the partnerships and collaboration associated with CRCs now have
less of a ‘bottom-up’ element and there is a tendency to use CRC involvement as a
means of supporting internal organisational objectives rather than supporting the
inter-organisational partnership itself. Ongoing management of the CRC relationship
is receiving much more attention in participant organisations.
With increasingly tight budgets and financial pressures, the resources available for
open-ended collaboration are constrained. Networks and informal organisation only
flourish in an environment where there is a substantial element of “organisational
slack”.

Increasing the proportion of public researchers who are commercially oriented

A major contribution of the CRC Programme has been to create a cohort of highly
skilled industrial research managers who are able to deliver results under complex
partnership arrangements involving large and powerful participant organisations. The
‘matrix’ structure of CRCs creates a management challenge of the highest order and
places a premium on chief executive officers (CEO) who are: scientifically credible;
have knowledge of Intellectual Property; and, have commercial and businesses
acumen. This is in addition to strong leadership qualities.
One the most positive aspects of the CRC Programme has been the contribution to the
training of PhD students. CRC based training of PhD students has an advantage in
that these students develop a tacit knowledge of the importance of application and
adoption of research and how to interact with industry. This positive externality will
greatly assist in developing a culture of adoption and application within Australian
industry and government. Unfortunately it is effectively impossible to measure its
impact.
In 2001-02, 1,391 PhD full time equivalent (FTE) students were registered at CRCs,
208 FTE Masters degree research students and 9,124 undergraduates were recorded as
taking part in CRC-run education courses. The proportion of CRC based PhD stu-
dents in agriculture and natural resource management represents about 45 percent of
enrolments in Australian universities.
From the Outcomes Survey, 72 percent of research users indicated that they were
either satisfied of very satisfied with the qualities and capabilities of CRC researchers.

Upgrading the innovative capacities of Australian business enterprises

The main area in which innovative capacity in the private sector has been enhanced as
a result of the CRC Programme is when new products and processes emerge as a
result of the adoption of CRC research. In the agriculture, mining, and water indus-
tries businesses have adopted and implemented CRC developed technologies. Appli-

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Evaluation of the CRC Programme 2003

cation could go further with greater commitment to and investment in knowledge

brokerage activities.
New technology-based companies have also been generated as a result of CRC
research. This covers not only the transfer of technology into brand new businesses;
it also covers new businesses created by graduates when they leave the CRC. This
applies particularly in those industries where there is opportunity for the application
of “disruptive technologies” and a comparatively low requirement for investment in
“complementary assets” (machinery, buildings, other IP, etc).
New companies created from the CRC environment, together with start-up companies
commencing from other sources, should eventually play a role in re-vitalising the
nation’s industrial fabric - but this is likely to be a long-term process that relies upon
these companies growing in size and influence, being acquired, and/or building
linkages through industry value chains. The skills and capabilities of venture capital
investors in building businesses and linkages through (global) value chains is particu-
larly important in this regard.

Administrative efficiency and flexibility

There is considerable scope for improvement in the administration of the Programme
that would add to improved efficiency and flexibility. Specific opportunities are
canvassed below.

Selection criteria and procedures

The successes that the Programme has generated have been due in large part to the
flexibility of the selection criteria and the ability of individual CRCs to respond to
changes in their operating environment. This ‘permissive’ approach has been impor-
tant in introducing flexibility into the Programme and allowing CRCs to grow around
new business development for example.
Although this flexibility is useful, the approach adopted by proponents to the applica-
tion process is viewed as overly focused upon formulating proposals to fit eligibility
criteria and assumed norms (such as the size of bid most likely to win funding).
Professional advisors and consultants are frequently contracted to develop CRC
proposals. This results in well-crafted proposals but introduces a level of conformity
that may work against novelty and innovation.
The selection criteria have evolved over time and have become highly prescriptive in
their orientation. The nine selection criteria are used not only in selection but also in
the review and evaluation processes. Conversely, the Programme objectives have
become more generic and all-embracing. There is a need to reverse this balance by
encouraging Proposals to be developed around the Programme objectives rather than
the selection criteria.

Funding arrangements
An important aspect of the CRC Programme has been to “leverage” industry funding
for research and development. The extent of leverage is highly regarded in the
application and assessment process. It has been reported widely in publicity and

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Evaluation of the CRC Programme 2003

promotion as an indicator of the “success” of the Programme in relation to stimulating

expenditure on research and development.
Programme funding is seen by many CRC participants as “providing the glue” for
collaborative research endeavours. This is the essence of the leverage arguments and
applies particularly in the mining, energy, agriculture, and natural resource manage-
ment sectors where participants have ongoing and substantial commitments to re-
search.
At the same time, however, leverage makes it difficult for CRCs based on new
business development in emerging industries to be competitive in the selection
process due to the difficulty of finding existing industry partners and encouraging
those partners to contribute significantly in cash and in kind. The extent of leverage
required also makes it difficult for small to medium enterprises (SMEs) and non-
government organisations (NGOs) to be major contributors to a CRC application.
By trying to increase the “leverage” of Commonwealth funding to make a bid look
competitive, proposals in the established industries can also involve a large number of
industry partners with relatively small commitments. These large CRCs can become
unmanageable and non-viable.
The focus on leverage has resulted in an erosion of the relative value of core Com-
monwealth funding to individual CRCs and a risk that Programme funding is being
spread too thinly. Whilst the leverage objective had validity in the early years of the
Programme, it is of much less relevance now in stimulating industrial research –
particularly in the area of research commercialisation. A greater investment focus for
the CRC Programme will reduce the importance of the leverage expectation.

Departmental processes and procedures

Previous reviews have made recommendations that have increased departmental
“oversight” and generated an increased reporting and compliance burden on CRCs.
Whilst the objectives of the enhanced reporting requirements are to ensure account-
ability over the disposition of public funds, it is also important to ensure that the
administration costs associated with operating a CRC do not continue to grow simply
by virtue of these compliance requirements.
The general view expressed from within government, from universities and busi-
nesses is that the CRC Programme is “over-administered”. In a devolved manage-
ment environment much of the oversighting, monitoring and control should be in the
hands of Boards – with Boards responsible and accountable for results and outcomes.
Despite this “over-administration” and fairly heavy reporting requirements via the
Management Data Questionnaire (MDQ), no over-arching CRC performance meas-
urement framework has evolved that is able to answer the key question: what benefits
has the CRC Programme achieved in terms of Australia’s economic growth, social
well-being and environmental outcomes? The dominant emphasis is upon inputs and
outputs not upon outcomes.

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Evaluation of the CRC Programme 2003

Accountability
The accountability framework for CRCs rests upon complying with a contract relating
to often uncertain research and innovation processes over a seven year time-frame.
The situation is complicated by the existence of two agreements – an Agreement with
the Commonwealth and an Agreement among the participants.
Accountability for CRC performance should be placed more squarely with the Board
of the CRC, with the Commonwealth monitoring results and outcomes and relying on
annual financial returns, Audit Reports and CRC initiated Performance Audit Reports.
The responsibilities of Boards, and their relationship with participants can be clarified
by the creation, through legislation, of a special corporate vehicle to operate CRCs.
A special corporate vehicle would also have application in relation to other public-
private industrial research partnerships, such as Major National Research Facilities
(MNRF) and Centres of Excellence. Such an entity would clarify taxation and other
corporate issues associated with CRCs and allow for a far less complex transition
from a research organisation to a more commercially based business. It would allow
for the resources currently spent on legal fees and taxation advice to be diverted into
research and value adding activities.

The CRC Programme within the Broader Science and Innovation System
The CRC Programme occupies an important place in Australia’s science and innova-
tion system. However, the system has been evolving with consequent implications for
the CRC Programme in the medium and longer term.

Clarity and appropriateness of the current objectives

The current Programme objectives have drifted significantly from those announced in
1991. The objectives have become more generic, but they are “supported” by nine
selection criteria reflected in a comprehensive set of “rules” contained in CRC Guide-
lines for Applicants 2002 Selection Round and General Principles of Centre Opera-
tions. There is also a set of supporting documents relating to Reviews and Reporting
based around the nine selection criteria.
As indicated above, it is important to restore the balance between the Programme’s
objectives and the Selection criteria. It is also important that the Programme be
associated with an “overarching purpose” or “vision”.
For the future, the CRC Programme should be promoted on the basis of an overarch-
ing purpose “to achieve closer linkages between science and the market by matching
the technological capability provided by Australia’s strong public research base with
the requirements of industry and other research users”.
In terms of objectives, it became apparent during the Evaluation that the tasks re-
quired were actually very clear statements of intent. It is therefore proposed that the
objectives of the Programme be defined as:
Contributing to Australia’s economic growth, social well being and environ-
mental outcomes.
Developing Australia’s public and private industrial research capacity in areas
of national need or global opportunity.

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Evaluation of the CRC Programme 2003

Producing applicable research that is of an excellent standard.

Adding to the nation’s intellectual property and promoting its adoption, applica-
tion and use in businesses and public programmes.
Producing graduates with skills, knowledge and experience in the application of
research in a national, industry and/or business context.
Enhancing collaboration among public and private researchers.
Upgrading the innovative capacities of Australian business enterprises.
The objectives stated in these terms will allow for a more economical approach to be
adopted in developing Guidelines (see below).
Within the framework of Programme purpose and objectives, and reflecting the
industrial research focus of the Programme, the CRC Programme should be clearly
positioned as an “investment” programme that is expected to deliver returns in the
form of economic, social and environmental benefits to the nation. These benefits
may be in the form of:
Employment and profitability of new or existing technology based businesses as
a result of the adoption, application and use of scientific discoveries and techno-
logical inventions.
Improved international competitiveness of Australian industry.
The adoption and implementation of programmes that are targeted at the
conservation, repair and replenishment of the nation’s natural capital, restoration
of biodiversity and improving public and environmental health.

Selection criteria and procedures

The selection and renewal of CRCs should give preferential treatment to robust and
compelling “investment propositions”. These proposals should detail the path to
market or other end-uses by quantifying, to the greatest extent possible the costs
involved in attaining these objectives, the scope, extent and estimated value of bene-
fits to be obtained, and the anticipated risks faced. The proposal should clearly
identify the feasibility, desirability and practicality in relation to implementation –
from an end user perspective.
Within this the basis of selection should be, first and foremost, an appraisal of the
extent to which the proposal will achieve the objectives of the Programme. Beyond
that, selection should be based on assessment of:
The Credibility of the proposal in terms of methodology, approach, the signifi-
cance of the problem and issues being addressed, the handling of risk and uncer-
tainty, and the probability of success.
The Reputation of the researchers in applicable research (including their track
record in collaboration).
The Integrity of the nominated Governing Board.
The Capacity of the Board to identify and appoint a CEO with the necessary
management and leadership capacities.
The Commitment of all concerned to collaboration and achieving outcomes.

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Evaluation of the CRC Programme 2003

These criteria are consistent with investment appraisal criteria and focus on the skills,
knowledge, experience and competency of the research team, and its backup, to
deliver the results intended.
It is also envisaged that the selection process would involve two stages:
A Preliminary proposal submitted in response to a general and public “Request
for Proposals” and containing an outline and summary of the research, its im-
portance and significance, indicative benefits, budget details and extent of end
user involvement.
A Full proposal, following CRC Committee review and invitation to submit a
detailed proposition.
The selection process should be undertaken by expert panels with an industrial focus,
with members having both academic research and industry credentials and experience
in investment appraisal. The quality of the science would be a pre-requisite – as
indicated by the academic and industry standing of the scientists. The panels would
be formed for the following sectors: information technology and communication
industries; pharmaceutical, health care and medical devices; environ-
ment/agriculture/water industries; mining and manufacturing.

Funding arrangements
In the revised framework there should be no specific guideline given concerning the
level of funding for CRC proposals. However, the CRC portfolio should be struc-
tured in a way that there is an appropriate balance between CRCs requiring large,
longer-term investments and those involving a lower level of investment over an
initial shorter time frame, but a prospect of building up over time.
It is also proposed that the CRC Committee monitor and maintain what it considers to
be an appropriate balance between investment in CRCs oriented towards national
benefit, industrial performance improvement and business development. That balance
would have regard to the investment climate and linkages and relationships with other
Programmes relating to the creation and transfer of applicable knowledge. It is not
suggested that the Programme be sub-divided into three “sub-Programmes” with
earmarked allocations along these lines.
Given the changes in the industrial research and innovation culture referred to earlier,
there would, however, be a strong expectation that more resources would be directed
towards CRCs based on new business development involving the commercialisation
of university and publicly funded research. Such re-direction would necessarily have
regard to the quality of the “investment” proposals submitted.

Accountability framework
An “investment proposal” approach that stresses the intended return on investment
and how this will be achieved would provide a suitable mechanism for enhancing
industry and end-user confidence. This “business-like” approach would not only
improve the effectiveness of the CRC Programme in delivering its intended ‘headline’
outcomes, it would also simplify the administration of the Programme.

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Evaluation of the CRC Programme 2003

The fundamental accountability criterion is that CRC Boards should be responsible

and accountable for the performance of the CRC.

Conclusion
The success of the CRC Programme to date has been strongly influenced by the extent
of the existing match between the technology-push from the research base and the
demand-pull from potential research users. When this match is strong (as in the case
of the environmental issues and the minerals industry) then CRCs have performed
well in relation to research, education and collaboration outcomes. When there is
little or no pre-existing capacity to match technology-push and demand-pull then the
performance of CRCs has been more mixed.
In the area of research commercialisation, the CRC Programme has had some notable
successes, but the track record is not yet strong. The change in orientation of the
Programme towards a greater commitment to commercialisation and new business
development should increase performance in this area. Success is, however, highly
contingent on recognising the difficulty of finding established industry partners with
the capacity to adopt and utilise disruptive technologies (and thus “leverage” Pro-
gramme funding), and the availability of pre-seed funding and skilled and capable
venture capital investors to “pull through” research into new products and businesses
that have strong linkages though industry value chains.
The Evaluation highlights the importance of responding to and adapting to wider
structural changes in the science and innovation system and differences in innovation
pathways between and within industries and technologies. The Programme has, to
date, not been designed to respond to these structural factors so much as to work
within them.
Putting it another way, although the original objectives of the CRC Programme were
related to the need to match technology-push with industry and other user demand-
pull, the design of the Programme has, in practice, limited the extent to which it has
been able to improve this match particularly in new areas of technology development.
This job still needs to be done. A re-vitalised investment-focused CRC Programme
with a greater emphasis on new business development would be better positioned to
strengthen the match between technology-push and demand-pull.
On this basis it is recommended that the CRC Programme should continue, albeit with
changes in design features and balance in the composition of CRCs.
Recommendation:
I - 1. The CRC Programme should continue, but with design modifications
to reflect changes in the environment for public-private sector re-
search collaboration and the creation of new business models for the
commercialisation of publicly funded research, as identified and can-
vassed in this Report.

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Evaluation of the CRC Programme 2003

Structure of the Report

The Report is presented in two parts. Part I addresses the direct programme evalua-
tion issues in Element 1 and Part II addresses the broader policy and strategic issues
raised in Element 2.

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Evaluation of the CRC Programme 2003

Figure 1: Examples of CRC Successes Referred to in CRC Publications and Promotional Material
National Benefit CRCs
CRC for Aboriginal and Tropical Health - Discovered a new rapid test for detecting streptococcal B infections. The test is fast, non-invasive and
easy to perform. This is a critical health issue for newborn infants.
CRC for Catchment Hydrology: Developed a short-term detailed forecasting system that enables more accurate predictions to be made of the precise
level and location of rainfall during storms. Estimated to save Sydney Water around $20 million over the next 20 years.
CRC for Coastal Zone, Estuary and Waterway Management - Development of a regular comprehensive ‘report card’ for the Moreton Bay area to
more accurately check the environmental health of the area.
CRC for Conservation and Management of Marsupials – Development of a contraceptive vaccine to control populations of possums and wallabies
CRC for the Great Barrier Reef World Heritage Area - Use of computer models to simulate cyclones on the reef to help engineers construct
‘smarter’ lighter tourist pontoons that minimise environmental impact and the chance of cyclone damage to the reef.
CRC for Weed Management - Successfully engaged the community to overcome an aggressive creeper introduced into Australia 150 years ago that
was smothering Australian bushland.
Industrial Research Collaboration CRCs
Australian Telecommunications CRC – Patented a technology for real-time signal transfer over the Internet.
CRC for Advanced Composite Structures - Developed a patented process for the application of a thermoplastic skin to the surface of thermoset
composite materials. The process attracted the interest of the major aerospace companies, Boeing and Airbus.
CRC for Clean Power from Lignite - Development of a laser plasma spectrometer; strategies for coal de-watering through Mechanical Thermal
Expression.
CRC for Enterprise Distributed Systems Technology – Development of GuideBeam, a unique search tool designed to improve information access
by helping the user formulate a precise description of their information need.
CRC for Mining Technology and Equipment - BHP Billiton has retrofitted a production dragline at the Peak Downs mine with the CRC’s Universal
Dig & Dump Technology (UDD). This innovation in open cut mining technology has increased productivity of the dragline by more than 25 percent.
CRC for Molecular Plant Breeding - The CRC's patents represent real innovation in the field of molecular plant breeding in the cereals and pastures
areas; the patents are in various stages of certification for licensing, but are expected to deliver substantial commercial returns.
CRC for Quality Wheat – Development of WheatRite®, a test to determine the level of potential weather damage to wheat crops; expectations of
sales of $4m by 2004.
CRC for Sensor Signal and Information Processing – Development of surface wave radar for coastal surveillance; development of an ultra wideband
low frequency ground penetration radar.
CRC for Sustainable Rice Production – Developed models and software for understanding the movement of water and salt in relation to irrigation
farming at both farm and irrigation-district levels.
CRC for Sustainable Sugar Production – Developed decision support models for onfarm water storage to maximise returns from supplementary
irrigation.
CRC for Tropical Plant Protection - Contributed to the development of a test for disease in tropical fruits which is expected to save the industry over
$21 million a year in managing this problem
CRC for Waste Management and Pollution Control - Development of a method for increasing the solid content of sewage sludge
CRC for Water Quality and Treatment - Developed a method of rapidly distinguishing toxic blue-green algae species from non-toxic species. The
CRC has patented a test that uses genetic technology to identify two of the most toxic species within hours. This enables water resource managers to
react more quickly to the potential health threats of algal blooms.
Business Development CRCs
Australian Photonics CRC – Creation of companies that: develop, make and sell applications specific optical fibres to component manufacturers;
incorporates optical fibres in devices and components; developing optical circuits on a chip; incorporating new products into new wavelength
management systems.
CRC for Cochlear Implant and Hearing Aid Innovation - Developed software for the tele-commerce sector that recognises and blocks ‘acoustic
shrieks’ in phone lines. Expectations of earning around $5m a year, including a substantial export market; development of software to allow
audiologists to vary the amplification at different frequencies by hearing devices.
CRC for Diagnostic Technologies – Developed and patented a technology (FNC) that allows rapid identification of variants of a specific gene at a
molecular level; combination of FNC with gene chip technologies to make possible the speedy analysis of thousands of genes; technology has been
acquired by US biotechnology company Affymetrix generating a royalty stream.
CRC for Eye Research and Technology – Developed continuous wear contact lenses. More than 400,000 people in over 40 countries now have
contact lenses they can wear continuously for 30 days and nights.
CRC for International Food Manufacture and Packaging Science – Found ways of using plastics manufacturing systems to produce packaging
materials that are biodegradable.
CRC for Satellite Systems - Development of the first all-Australian satellite in 30 years.
CRC for Tissue Growth and Repair - Developed Tendotrophin® for the treatment of horse tendon injuries, which is marketed by PrimeGRO Pty Ltd,
a CRC start-up company established in 1999. Another CRC start-up is GroPep Ltd which achieved sales of $9.6 million in 2000-01.
CRC for Vaccine Technology- Developing a vaccine against glandular fever to stage of clinical testing. Potential market of 2.5 million vaccinations
per annum

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List of Recommendations

The Recommendations made as Part of the Evaluation are listed below. They are
identified in relation to the Part of the Report in which they appear.
Part I: Programme Efficiency, Effectiveness and Flexibility
I - 1. The CRC Programme should continue, but with design modifications to
reflect changes in the environment for public-private sector research
collaboration and the creation of new business models for the
commercialisation of publicly funded research, as identified and
canvassed in this Report. ......................................................................xvii
I - 2. CRCs, through the CRC Association, prepare a series of detailed case
studies, across all CRCs, describing paths to adoption, application and
use of research. The case studies should identify the factors that lay
behind and drove the successful outcome and how this was done. .........51
I - 3. The performance information framework, and the related Outcomes
Survey, developed during the Evaluation be adapted to reflect the
proposed revised Programme objectives and used on a continuing basis
for the identification of, and reporting on, CRC outputs and outcomes. .53
I - 4. A communication strategy be developed for the CRC programme that is
directed towards the provision of consistent, standardised and relevant
information to industry, government and the community about CRC
results and achievements. The Strategy focus on the way in which
research has been adopted and applied, and include information on
demonstrated economic, social and environment benefits. The Strategy be
resourced from within the CRC Programme and coordinated by the CRC
Association...............................................................................................68
I - 5. As a condition of approval, CRCs be required to identify a clear and
credible strategy for the communication of research outcomes to targeted
end users...................................................................................................92
I - 6. The CRC Selection Criteria be revised and simplified with a view to
being less prescriptive and more focussed on the way in which a proposal
will deliver outcomes in relation to the Programme’s mission and
objectives. ................................................................................................97
I - 7. CRC Applications be submitted and assessed in a two stage process: A
Preliminary Proposal outlining the research, objectives and potential
benefits; a Full Proposal would be invited following Committee
assessment of the Preliminary Proposal...................................................98
I - 8. The Management Data Questionnaire be continued as an annual report to
the Department of Education, Science and Training and be expanded to
capture, where appropriate, the outcome indicators identified in the
“Performance Monitoring Framework” prepared during this Evaluation;
information obtained from the Questionnaire be reported back to CRCs
on a regular basis ...................................................................................101

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Evaluation of the CRC Programme 2003

I - 9. The Annual Report, Second Year Review and Fifth Year Review
processes be integrated into a single reporting process that focuses on
assessing the achievements of the CRC against credible milestones
agreed in the selection process and in CRC operational plans. CRCs
continue to be required to report quarterly on income and expenditure
against budget; Boards be required to commission regular Performance
Audits at least every three years; the results of those Audits be published.
103
I - 10. The Boards of individual CRCs decide whether a Visitor be appointed
and the time frame for the appointment. The cost of the Visitor
appointment should be met by the CRC ................................................103

Part II: A Focus on the Future: The CRC Programme within the Broader Science
and Innovation System
II-1. The CRC Programme be promoted on the basis of an overarching
purpose “to create and sustain active public-private research partnerships
oriented towards the adoption and utilisation of research in a national,
industry and business context”...............................................................143
II-2. The Objectives of the CRC Programme be redefined as follows: .........151
• Contributing to Australia’s economic growth, social well
being and environmental outcomes
• Developing Australia’s public and private industrial research
capacity in the areas of national need or global opportunity
• Producing applicable research that is of an excellent standard
• Adding to the nation’s intellectual property and promoting its
adoption, application and use in businesses and public
programmes
• Producing graduates with skills, knowledge and experience
in the application of research in a national, industry and/or
business context.
• Upgrading the innovative capacities of Australian business
enterprises
II-3. The CRC Programme be clearly positioned as an “investment”
programme that is expected to deliver outcomes in the form of national
economic, social and environmental benefits, the improved
competitiveness of Australian industry, and/or the creation and sustaining
of viable new technology based businesses. ..........................................153
II-4. The basis of selection should be, first and foremost, an appraisal of the
strength and value of of the collaboration and the extent to which the
Proposal will achieve the objectives of the Programme. .......................155
II-5. The selection and renewal of CRCs should give preferential treatment to
robust and compelling ‘investment propositions’. These proposals should
detail the path to market or other end-uses by quantifying, to the greatest
extent possible the costs involved in attaining these objectives, the scope,

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Evaluation of the CRC Programme 2003

extent and estimated value of benefits to be obtained, the anticipated risks

faced. The proposal should clearly identify the feasibility, desirability
and practicality in relation to implementation – from an end user
perspective .............................................................................................155
II-6. In line with the priority placed upon robust and compelling investment
propositions the Preliminary Proposal should consist of the investment
proposition with a short Summary and indicative material relating to
demand/need, research, risk return, finances, operations and
legal/contractual matters ........................................................................156
II-7. The Department of Education, Science and Training should send out a
clear message that the selection and renewal of CRCs will in future place
a priority upon robust and compelling “investment propositions” in which
industrial research is a means to an end - not an end in itself................157
II-8. Four Investment Appraisal Panels be established with a focus on the
fields of investment rather than the science input. The panels should
cover the following specific areas: information technology and
communication; health/medical/bioscience; environment/
agriculture/water industries; mining, manufacturing, infrastructure. The
panels be constituted by people with strong backgrounds in research
relating to resource sustainability, industrial application of new science
and technology, and research commercialisation. .................................158
II-9. The Department of Education, Science and Training explore the
feasibility of legislation for CRCs to be established with a specific status.
The objective would be to resolve uncertainties and complexities in
corporate and taxation status and provide a sound basis for a public-
private research partnership. The legal status could also be relevant to
other public-private research partnerships such as MNRFs and Centres of
Excellence ..............................................................................................163
II-10. Contracts specify that CRCs be governed by a relatively small Board,
consisting of around seven members, committed to the objectives of the
CRC; membership include a majority of research users; the governance
structure include appropriate functional committees. ............................165
II-11. The Commonwealth Agreement with a CRC entity should be based on
the CRC Investment Proposal as approved by the CRC Committee. ....165
II-12. The position profile of the CEO of the CRC be clearly identified in the
CRC proposal. Where possible, the CEO should be nominated in the
proposal..................................................................................................166
II-13. In relation to the proposed “super CRCs” the level of programme funding
to be made available should be based on the investment proposal and the
“business case” rather than representing a “special case” .....................167
II-14. The CRC Programme should be open to investment proposals based upon
presenting a sequence of options for investment with progress determined
on the basis of success. This type of investment proposal will encourage
exploratory propositions with high-risks but high potential returns by
providing flexibility over how far the venture should proceed..............167

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Evaluation of the CRC Programme 2003

II-15. The focus of accountability under the CRC Programme should be on

holding CRC Boards accountable for performance. Boards be required to
sign off on Annual Reports and commit to implementation of the three
yearly Independent Performance Audit Reports....................................171
II-16. The Three Yearly Performance Audit Reports attest to the credibility,
reputation and integrity in governance, planning, resource allocation and
management decision-making processes in the CRC. ...........................172
II-17. CRCs work collectively towards the creation and/or engagement of an
entity that will provide skills and capabilities to assist with effective
research commercialisation. The CRC Association should take the lead
role in facilitating this initiative. ............................................................173
II-18. The CRC Programme give adequate recognition to the efforts made by
CRCs to build relationships with SMEs and NGOs through the objective
to upgrade the innovation capacities of Australian business enterprises.
The Programme actively seek proposals involving SMEs and NGOs
through “associate agreements” which provide benefits without the
associated administrative, legal and taxation problems. ........................174
II-19. The CRC Programme should communicate the contribution of
collaborative research in regional economic development and encourage
Commonwealth and State regional development agencies to become
participants in developing investment proposals that would deliver
investment outcomes and build capability in regional communities. ....174
II-20. The Department of Education, Science and Training provide targeted
financial assistance to the CRC Association for specific projects
developed by the Association related to implementing recommendations
in this Report, including contribution to the development of the CRC
entity framework, case studies, communication strategy and
implementation and a commercialisation brokerage. ............................176

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Evaluation of the CRC Programme 2003

Part I: Report on Programme Effectiveness,

Efficiency and Flexibility

1
Evaluation of the CRC Programme 2003

1: The CRC Programme - Objectives and Profile

The CRC Programme was established in 1990 with the first CRCs being announced in
1991. It is the Government’s major Programme for promoting collaborative research
links between industry, research organisations, education institutions and government
agencies. The Programme supports research and development and education activi-
ties that achieve real outcomes of national economic, environmental and social
significance.

1.1 Objectives
The objectives for the CRC Programme are:
To enhance the contribution of long-term scientific and technological research
and innovation to Australia’s sustainable economic and social development (the
research objective).
To enhance the transfer of research outputs into commercial or other outcomes
of economic, environmental or social benefit to Australia.
To enhance the value to Australia of graduate researchers.
To enhance collaboration among researchers, between researchers and industry
or other users, and to improve efficiency in the use of intellectual and other re-
search resources.
The CRC Programme seeks to achieve these objectives by supporting applications to
establish CRCs that bring together researchers and research groups from universities,
government research laboratories (Federal, State and Territory), and the private
sector, into long-term cooperative relationships. CRCs are expected to create
strengthened research networks, and provide areas of research concentration to ensure
that national resources are used more efficiently9.
The active involvement of industry and users is a crucial aspect of the Programme.
Industry and users are expected to be engaged in all key aspects of CRC operation,
including: research programme design, management; monitoring and evaluation;
commercialisation and utilisation of research outputs; and education and training of
graduates and postgraduates. The active involvement of industry and users is intended
to ensure that the long-term research undertaken in the CRC will have strategic
relevance and that the research outputs will be used to produce outcomes of eco-
nomic, environmental or social benefit to Australia10.
The Programme also seeks to stimulate a broader education and training experience
for graduate and postgraduate students to enhance their employment prospects. It is
expected that CRC students will have the opportunity to participate in cooperative
user oriented research programmes and work with researchers from outside the higher
education system.

9
Australia. AusIndustry, CRC Guidelines for Applicants 2002 Selection Round and General Principles of Centre Operations
(2001)
10
Ibid.

3
Evaluation of the CRC Programme 2003

It is important to note that while the Programme encourages long term research, it is
not an objective of the CRC Programme to establish permanent research institutions
supported indefinitely using Programme funds. Programme funding is for a maxi-
mum of seven years. It is expected that participants will come to recognise the bene-
fits of collaboration and user involvement in long-term research and will continue to
collaborate when CRC funding ceases.
The amount of funding provided to CRCs in Round seven, announced in 2000, ranged
between $1.6 million and $3.14 million per annum, averaging $2.45 million per
annum. Additional funding provided under Backing Australia’s Ability for the expan-
sion of the CRC Programme enabled an increase in grant size. In the Guidelines for
Applicants 2002 Selection Round AusIndustry indicated that the average level of
Centre funding would be around $3 million per annum, but the existing flexibility in
size and duration would be maintained11.
The Department of Education, Science and Training is responsible for the administra-
tion of the Programme since it was transferred from the Department of Industry,
Science and Resources in late 2001. These responsibilities include, monitoring,
review and assessment of CRC applications. The Department also supports the CRC
Committee and its Expert Panels and is responsible for providing policy advice to
Ministers on the CRC Programme.
The purpose of the evaluation is to ensure that the Programme’s objectives and design
are kept up to date and that it is well positioned to deliver beneficial outcomes into the
future.

1.2 Origins
The CRC Programme was established in 1990 (with the first selection round CRCs
announced in 1991) in response to a number of perceived weaknesses in the institu-
tional framework for Australia’s R&D effort. These weaknesses were identified as12:
Australia’s combined scientific and technological resources were quite substan-
tial, but they were dispersed both geographically and institutionally. This sepa-
ration made it difficult to build strong research teams and led to unnecessary
duplication of facilities, and difficulty in ensuring that they were world class.
Existing funding arrangements were seen as contributors to the problem. As
most research funding in Australia was from institutional sources and was dis-
tributed through administrative channels to operational units and individual re-
searchers, it was difficult to build large integrated research. Competitive fund-
ing sources, such as the Australian Research Council, the National Health and
Medical Research Council and the Rural Research funding bodies had, with few
exceptions, difficulty in building such teams.
Corporate R&D was not well developed in most Australian industry sectors.
There was limited capacity for corporate and other research users to benefit
fully from the skills and information in the Universities and government re-

11
Ibid.
12
Ralph O Slatyer, "Cooperative Research Centres - A Retrospective View," in The Annual Meeting of the CRC Association
(Brisbane: 2000)

4
Evaluation of the CRC Programme 2003

search organisations. It was well known that information and technology are
transferred most effectively when there is a similar level of knowledge in both
parties - the lack of in-house R&D capability was seen as an important liability.
Graduate programs in Australian Universities provided mainly traditional
academic training, involving research only and a single supervisor. This did not
prepare students well for jobs outside the academic world as well as denying
students access to the skills and experience of many of Australia’s best re-
searchers, and researchers the stimulus of interaction with students.
The vision for a Cooperative Research Centre was a “One Stop Shop” for innovation,
consisting of a cooperative team of researchers and research users, drawn from
various organisations and of adequate size and composition to have a real and con-
tinuing impact in the sector where it was located. It was envisaged that:
Research organisation participants would undertake mainly long term strategic
research (work at the R end of the R&D spectrum) and research users would
work mainly at the “D” end.
All user participants would have access to the research in the Centre, so the
competitive challenge for individual firms would be to utilise the research re-
sults in-house, ahead of others.
More than one firm would be associated with each Centre so that it would not
become the research arm of a particular firm and opportunities for commercial
joint ventures would be more likely to arise.
Embedded in the concept was an objective that the Centres would demonstrate the
benefits of greater cooperation to the whole Australian research, and research user,
community and thus enhance the overall national R&D effort.
It was also envisaged that a combination of location, funding and leadership would
achieve a level of cooperation that had been lacking in the past. Centres would be
located on or adjacent to University campuses wherever possible, so as to encourage
precinct development around each campus, with innovative, R&D intensive firms
regarding Universities as the logical place to locate part of their R&D effort.
There was an expectation that some of the participants could be co-located in the
same buildings and facilities - building more space if necessary. In this way, truly
cooperative teams, sharing the same laboratories, could be established and opportuni-
ties taken for non-University staff to participate fully in educational programs. In this
way the institutional origins of the participating groups could become more blurred
and the Centres themselves could more readily develop an identity.
Given the geographical dispersion of Australian research groups, however, it was
evident that the degree of co-location would seldom be achieved in the new Program.
It was therefore hoped that funding flexibility would lead to imaginative building
programs and that effective networking would do much to overcome the “tyranny of
distance”.

5
Evaluation of the CRC Programme 2003

1.3 Subsequent developments

Over the last ten years the Programme has evolved through adaptation and initiatives
following decisions by Government and Ministers. The key points in that evolution
are summarised in Figure 2.
Figure 2: Evolution of the CRC Programme
Year Event Outcome
1990 Review of CSIRO Labor Government election commitment to a new programme with
– suggests co-location of linkages to industry to foster research excellence.
1991 CSIRO research Cabinet submission results in new programme funding for 50
Divisions with Universi- centres at $2m per centre, per annum (total $100m per annum).
ties or some kind of
programme to foster
cross fertilisation of
research.
1991 Programme launched, Programme commenced. Minister’s Statement – “Australia must
first call for applications, match the technology push provided by its strong research base
implementation group with the demand pull of industry and other research users, and
located in Department of these centres will make an important contribution to this goal”
Prime Minister and CRC programme announced 25 centres funded for 7 years with a
Cabinet strong focus on research excellence.
1995 Rupert Myers Report Concluded the Programme has encouraged industry to become
Changing Research involved with longer-term research, has improved researcher
Culture to Senator the linkages, and cooperation and has focussed education and, finally
Hon Peter Cook is beginning to improve overall research management.
Recommended that programme continue and that successive
rounds be open to competition for places from new proposals and
from existing or modified centre proposals. This did not constitute
an expansion of the program.
1997 Stocker Review, Priority Endorsed pluralistic system of S&T research where priorities are
Matters13 largely determined at the sectoral level “close to the action”. CRCs
acknowledged as having their own priority setting methodologies
in this context.
Noted strong contribution of CRCs in changing the culture of
research, promoting the value of research in industry, promoting
research interaction with industry in higher education. The CRC
programme application processes are a strong example of priority
setting involving researchers and users.
Recommended that the CRC Committee should amend the CRC
Programme guidelines to ensure that the legitimate place for
“public good” centres is made explicit.
1997 Mortimer Review, Going Recommended termination of funding of those CRCs for which
for Growth: Business there is predominantly a private benefit and limit funding to $20m
Programs for Innovation, per annum for new CRCs with predominantly “public good”
Investment and Export14 collaborative scientific programs.
Articulated dichotomy between “public good” and “private good”
activities. Created strong reaction.

13
Australia. Chief Scientist (Dr John Stocker), Priority Matters (Canberra: Department of Industry, Science and Tourism, 1997)
14
Australia. Review of Business Programs, Going for Growth: Business Programs for Investment, Innovation and Export (David
Mortimer, Chair) (Canberra: Australian Government Publishing Service, 1997)

6
Evaluation of the CRC Programme 2003

Year Event Outcome

1997 Investing for Growth, the Don Mercer commissioned to undertake review. …which may
Howard Government’s recommend structural change to the programme. The review’s
Plan for Australian recommendations will focus on enhancing the commercial and
Industry15 announces a economic benefits of research within CRCs.
Programme Review
1998 Mercer-Stocker Report, Confirmed the role of the Programme in enhancing collaborative
Review of the Greater activities between research providers and industry and the signifi-
Commercialisation and cance of effective linking mechanisms in the national innovation
Self Funding in the system. Made a number of recommendations to improve the
Cooperative Research management of centres within the Program.
Centres Programme16 Recommended that overall Programme balance of effort in
different sectors should be reviewed and the scope of more CRCs
in the services sectors, in general, and the ‘information industries’
in particular, should be assessed.
1999 AusIndustry internal Changes to objectives and focus of the CRC programme – more
Review closely oriented to “user needs” with an emphasis on commerciali-
sation. Programme included in AusIndustry “suite” of Innovation
Programs and marketed to industry.

While the historical evolution of the Programme is of interest from the point of view
of changes and adaptations in the science and innovation policy environment, the
present policy position and objectives are taken as given in this Report.

1.4 CRCs approved

The main focus of this Evaluation is on CRCs approved up to and including Round 7
(undertaken during 2000). CRCs approved in Round 8 (2002) are scheduled to
commence operations from July 2003.
Over the life of the Programme, a total of 158 CRC applications, including renewal
and supplementary applications, have been supported from a total of 529 applications.
A profile of successful and unsuccessful applications by selection round is shown in
Table 3.
Table 3: CRC Applications - Successful and Unsuccessful
Year (round) 1991 1991 1992 1994 1996 1998 2000 2002 Total
(1) (2) (3) (4) (5) (6) (7) (8)
Successful applications
New 15 19 17 11 6 4 11 12 95
Existing 10 22 8 9 49
Supplementary 2 2 1 9 14
15 19 19 13 17 26 19 30 158
Unsuccessful applications
New 105 55 52 45 19 18 26 14 334
Existing 12 3 5 20
Supplementary 3 1 1 3 1 8 17
105 55 55 46 20 33 30 27 371
Total no of applications 120 74 74 59 37 59 49 57 529

Successful applications according to selection round and industry/research sector, are

listed in Table 4.

15
Australia. Prime Minister, Investing For Growth: The Howard Government's Plan for Australian Industry (Canberra:
Department of Industry, Science and Resources, 1997)
16
Australia. Department of Industry Science and Tourism, Review of Greater Commercial and Self Funding in The Cooperative
Research Centres Programme: Report of the Steering Committee (Mr Don Mercer, Dr John Stocker) (Canberra: AusInfo, 1998)

7
Evaluation of the CRC Programme 2003

Table 4: CRC Successful Applications (Number)

Industry/Research Categories 1991 (1) 1991 (2) 1992 (3) 1994 (4) 1996 (5) 1998 (6) 2000 (7) 2002 (8) Total
Agriculture and Rural Based Manufacturing 3 4 5 4 3 4 4 6 33
Environment 3 2 4 3 3 7 4 11 37
Information and Communication Technology 2 3 3 2 4 2 4 20
Manufacturing Technology 1 5 2 2 1 6 4 1 22
Medical Science and Technology 3 3 1 1 5 3 2 4 22
Mining and Energy 3 2 4 3 3 2 3 4 24
Total Successful 15 19 19 13 17 26 19 30 158

The highest number of CRCs has been approved in the Agriculture and Rural Based
Manufacturing and the Environment industry/research categories, accounting for a
total of 70 or 44 percent of all CRCs approved. The lowest number of successful
applications has been in the Information and Communications Technology category
The success rate for CRC applications has varied markedly across industry/research
categories. This is indicated in Table 5 below.
Table 5: Success Rates for CRC Applications
Industry/Research Categories 1991 (1) 1991 (2) 1992 (3) 1994 (4) 1996 (5) 1998 (6) 2000 (7) 2002 (8) Total
Agriculture and Rural Based Manufacturing 15.0 26.7 29.4 50.0 42.9 36.4 40.0 50.0 33.0
Environment 17.6 11.8 36.4 30.0 42.9 70.0 44.4 73.3 38.5
Information and Communication Technology 11.8 37.5 21.4 0.0 50.0 50.0 28.6 57.1 26.3
Manufacturing Technology 5.9 26.3 14.3 28.6 14.3 66.7 30.8 14.3 23.7
Medical Science and Technology 12.5 30.0 8.3 7.7 62.5 21.4 28.6 40.0 22.4
Mining and Energy 25.0 40.0 66.7 30.0 75.0 28.6 100.0 66.7 45.3
Total All CRCs 12.5 25.7 25.7 22.0 45.9 44.1 38.8 52.6 29.9

The overall success rate for CRC applications for the life of the Programme is just
under 30 percent. For Round 8, the success rate was 52.6 percent. The highest
success rate has been in Mining and Energy and the lowest in Manufacturing Tech-
nologies. CRC applications from sectors associated with emerging technologies and
generally a shortage of established industry partners (ICT and medical science and
technology) increased from a very low success rate (28.6 percent) in Round 7 to
higher rates in Round 8, but not to the levels of the Mining and Environment CRCs.

1.5 Support for the CRC Programme

The Commonwealth Government has been the major supporter of the CRC Pro-
gramme since its inception in 1991, providing a total of $1,147m in Programme
funding. Universities have been the second highest contributor, but their contribu-
tions have been mainly in-kind. Industry has contributed 16.5 percent of the re-
sources, of which 41 percent has been in cash.
Data from the Department of Education, Science and Training CRC database indicat-
ing the level of contribution is illustrated in Table 6 below.
Table 6: CRC Programme - Resource contributions 1991-92 - 2001-02
Cash In Kind Total Proportion Cash Proportion Total
$m $m $m (%) Resources (%)
CRC Programme 1,146.9 2.5 1,149.4 99.8 25.2
Universities 79.9 939.1 1,019.0 7.8 22.3
CSIRO 13.7 612.4 626.1 2.2 13.7
Industry 310.0 443.6 753.7 41.1 16.5
State Government 63.9 294.2 358.1 17.8 7.9
Other Commonwealth 52.4 181.3 233.8 22.4 5.1
Other participants 87.5 248.0 335.5 26.1 7.4
Other Funds 72.0 12.0 84.0 85.7 1.8
Total 1,826.2 2,733.1 4,559.4 40.1 100.0

8
Evaluation of the CRC Programme 2003

On the basis of the data in Table 6, the observation is often made that the Common-
wealth’s contribution of $1,149.4m has resulted in a total of $4,559.4m in collabora-
tive industrial research – a ratio of 3:1
In the last several years universities have been increasing their level of cash contribu-
tions as a way of making applications “competitive”. The overall profile is reflected
in the following chart.

CRC Programme 1991-2003: Contributions by Source

1,200,000

1,000,000

800,000

$ 600,000

400,000

200,000

0
Commonwealth CRC CSIRO Industry Other Funds Other State Universities
Programme participants Government
Participant

Cash $m In Kind $m

1.6 Current allocation of resource commitment

The purpose of this brief Section is to give an overview of resources allocated under
the CRC Programme in order to provide context for subsequent discussion. Further
analysis of resources allocated is provided in other relevant sections of the Report
Resource allocation data classified according to the five programme areas is only
available from Department of Education, Science and Training sources for the years
since 1998-99. This coincides with the commencement of Round 5 CRCs and the
introduction of Guidelines following the Myers Review.17
Between 1998-99 and 2001-02 a total of $835m in cash was allocated to CRC pur-
poses. Two thirds of this was allocated to research and 12.5 percent to Administra-
tion. The allocation to technology transfer was 10.6 percent. This is indicated in
Table 7.

17
Australia. Department of Industry Science and Technology, Cooperative Research Centres Programme Evaluation: Changing
Research Culture, Australia - 1995 (Sir Rupert Myers, Chair) (Canberra: Australian Government Publishing Service, 1995)

9
Evaluation of the CRC Programme 2003

Table 7: CRC Resource Allocation - 1998-99 - 2001-02 Cash (Total)

1998/1999 1999/2000 2000/2001 2001/2002 Average Proportion
$’000 $’000 $’000 $’000 $’000 (%)
Research 125,576.0 120,036.0 148,800.0 164,710.0 139,780.5 66.9
Education 12,521.0 13,097.0 16,579.0 16,977.0 14,793.5 7.1
Commercialisation/Tech Transfer 15,329.0 16,127.0 25,164.0 31,645.0 22,066.3 10.6
External Communication 5,128.0 4,661.0 6,742.0 8,744.0 6,318.8 3.0
Administration 23,711.0 21,787.0 25,394.0 33,236.0 26,032.0 12.5
182,265.0 175,708.0 222,679.0 255,312.0 208,991.0 100.0

The level of in-kind resourcing of research over the same time period was over 80
percent. This is indicated in Table 8.
Table 8: CRC Resource Allocation - 1998-99 - 2001-02 In Kind (Total)
1998/1999 1999/2000 2000/2001 2001/2002 Average Proportion
$’000 $’000 $’000 $’000 $’000 (%)
Research 225,114.0 236,798.0 279,519.0 362,092.0 275,880.8 80.5
Education 17,373.0 17,480.0 21,623.0 26,776.0 20,813.0 6.1
Commercialisation/Tech Transfer 18,019.0 21,458.0 24,273.0 19,479.0 20,807.3 6.1
External Communication 4,575.0 5,227.0 4,837.0 5,885.0 5,131.0 1.5
Administration 16,542.0 15,985.0 24,239.0 24,188.0 20,238.5 5.9
Total In-kind 281,623.0 296,948.0 354,491.0 438,420.0 342,870.5 100.0

Overall, the level of resourcing for research amounts to three quarters of CRC re-
sources. The allocation for Technology Transfer is less than eight percent and the
amount allocated to Communication is approximately two and a half percent. These
allocations are indicated in Table 9.
Table 9: CRC Resource Allocation - 1998-99 - 2001-02 Cash and In Kind (Total)
1998/1999 1999/2000 2000/2001 2001/2002 Average Proportion
$’000 $’000 $’000 $’000 $m (%)
Research 350,690.0 356,834.0 428,319.0 526,802.0 415,661.3 75.3
Education 29,894.0 30,577.0 38,202.0 43,753.0 35,606.5 6.5
Commercialisation/Tech Transfer 33,348.0 37,585.0 49,437.0 51,124.0 42,873.5 7.8
External Communication 9,703.0 9,888.0 11,579.0 14,629.0 11,449.8 2.1
Administration 40,253.0 37,772.0 49,633.0 57,424.0 46,270.5 8.4
Total Cash & In-kind 463,888.0 472,656.0 577,170.0 693,732.0 551,861.5 100.0

The resource allocation data suggest, from an overall perspective, a very high com-
mitment to research and a comparatively low level of commitment to the commer-
cialisation and communication of research outcomes.
Over the last three rounds there has been a perceptible shift in the emphasis of the
Programme towards commercialisation. This follows from changes and adjustments
to the CRC Guidelines. Successful applicants from the 2002 Round will be required
to develop a Commercialisation Plan. The change in the distribution of expenditure
among CRCs in Rounds 5-7 is indicated in Table 10.
Table 10: Distribution of Total CRC Expenditure Across Functions - Rounds 5-7
Research Education Tech Transfer/ Ext Communication Administration Total
Commercialisation
% % % % % %
Round 5 (1996) 77.1 5.4 8.2 1.2 8.2 100.0
Round 6 (1998) 73.5 6.5 9.7 2.9 7.4 100.0
Round 7 (2000) 75.7 7.4 2.9 0.7 13.4 100.0
Total Rounds 5-7 75.3 6.1 8.5 2.0 8.2 100.0

The proportions in Table 10 show an increase of 1.5 percentage points in commer-

cialisation expenditure and 1.7 percentage points in external communication expendi-
ture between Rounds 5 and 6. Together with an increase in expenditure on education

10
Evaluation of the CRC Programme 2003

there has been a reduction of 3.6 percentage points in research expenditure over the
same period.
The distribution of expenditure for Round 7 CRCs reflects the commitment to com-
mencement, with 13.4 percent of expenditure allocated to administration – and a very
low level of commitment to commercialisation. The high level of expenditure on
administration would also reflect the costs of negotiating Centre Agreements and the
high cost of legal advice associated with that activity.

1.7 CRCs in the Science and Innovation System

The CRC Programme performs an important role in the public research system, and
particularly in the university sector. The significance of the Programme in relation to
total expenditure on Research and Experimental Development is indicated in Table
11. The data are not strictly comparable with Table 7 due to recoding differences.
Table 11: CRC Expenditure in Relation to Total R&D Expenditure 2000-2001
CRC Higher Ed Government Business & Total Exp on
Socio-economic objective Expenditure Expenditure on Expenditure on Other R&D
R&D R&D Expenditure on
R&D
$'m $m $m $m $m
Economic Development
Animal Production and Animal Primary Products 10.5 64.5 297.8 55.5 417.8
Plant Production and Plant Primary Products 37.2 108.6 392.5 46.8 547.9
Mineral Resources (excluding energy) 20.6 42.1 81.9 317.2 441.2
Energy Resources 9.8 32.4 65.3 103.6 201.3
Energy Supply 10.0 31.1 28.3 121.8 181.2
Manufacturing 45.2 140.7 232.8 1,949.8 2,323.2
Construction 0.9 54.1 33.2 60.0 147.4
Transport 0.7 22.8 20.3 80.6 123.7
Information and Communication Services 29.3 127.7 53.0 1,368.7 1,549.4
Economic Framework 4.4 130.9 158.7 8.0 297.6
Commercial Services & Tourism 0 40.4 11.4 211.0 262.9
168.8 795.3 1,375.0 4,323.2 6,493.6
Environment
Environmental Management 50.7 134.9 380.9 62.1 577.9
Environmental Policy Frameworks 0 10.6 50.2 27.5 88.3
Society
Health 25.1 744.3 213.0 532.9 1,490.2
Advancement of Knowledge 7.2 691.7 33.8 7.0 732.5
Other 0 397.7 315.4 155.8 868.9
251.9 2,774.6 2,368.4 5,108.5 10,251.4

According to the data in Table 11, the CRC Programme is quite small in relation to
overall expenditure on research and development - amounting to $251m in a total of
$10 billion in 2000-01. However, the significance of the Programme is apparent in
relation to expenditure on research and development in the higher education sector,
particularly in the economic development and environment socio-economic group-
ings.

11
Evaluation of the CRC Programme 2003

2: CRCs and their Current Operating Environment

The purpose of this Section of the Report is to outline and discuss the arrangements
for the implementation of the CRC Programme. As with all public programmes, the
successful implementation and achievement of objectives is determined by the
efficiency and effectiveness of the organisation and management arrangements that
have been put in place and the practices and procedures that have evolved over time.

2.1 Overall framework

The CRC system started as a “bottom up” system with a strong focus on collaboration
at the researcher level. Over the years there has been an increasing level of involve-
ment at the institutional level. This involvement has increased as a direct result of
pressures and constraints on resources available to support research and tighter
priority setting and an increased focus upon achieving outcomes.
Over the life of the Programme more rules and guidelines have been instituted in an
endeavour to ensure that CRC activities are directed towards achieving Programme
objectives. Arguably, and in the opinion of stakeholders, the overall effect has been
to create a heavy superstructure and the system has become heavily top down.
As a result, the CRC Programme operates within a complex institutional, organisa-
tional and management system. It operates at several levels, which are depicted
below:
The CRC Delivery “System” Minister
Policy Level

CRC Committee: Vision, Objectives, Selection DEST

Implementation Policy, Administration

Strategic University DVC/ Research CSIRO/PFRAs State Whole of Government Private/Government Industry
Level Office Research Institutes (S&T Offices) Business Enterprises Associations

State Ag, NRM.,etc Departments

Business Faculty Deans CSIRO/PFRA Division Chiefs

R&D/ Innovation Business
Research Brokerage
Research Institutes, Divisions Unit Managers
Level

CRC Entity: Unincorporated/Incorporated Joint Venture

CRC Board

CRC Chair
Management
Framework
Chief Executive
Officer

University CSIRO/PFRA Government Corporate

Research Researchers Researchers Researchers Researchers
Collaboration

Commercial-
Research Adoption, Application, Utilisation isation Vehicle
Howard Partners, 2003

The framework suggests that a CRC is a “matrix” organisation, with researchers

responsible and accountable to both their host institutions as well as to the CRC

12
Evaluation of the CRC Programme 2003

entity. Although some researchers are directly employed by CRCs this is not com-
mon.
Responsibility for managing the organisation on a day-to-day basis falls to the CEO.
A great deal of reliance is placed in the Board to appoint a person with the appropriate
qualities and competencies to manage in this very complex environment. It is of
interest that in most applications for CRC grants the identity of the CEO is not known
– however the CEO must be approved by the Commonwealth.
Specific comments on each of the “layers” in the matrix follow.

2.2 The Minister for Science

At the policy level, the Minister for Science is responsible for setting the direction for
the Programme, endorsing objectives, and approving applications for CRC funding.
The Minister for Education, Science and Training has overall portfolio responsibility.
The Minister for Science decides which CRCs will be funded and the conditions of
any funding offer made under the Programme.

2.3 The CRC Committee

The Minister has appointed the CRC Committee to oversight the selection of new
CRCs by assessing all applications and recommending applications for funding
together with any terms or conditions that should be applied for successful applicants.
It also provides overall advice in relation to the management of the Programme. The
Committee takes an active role in the performance evaluation of individual CRCs
during their period of operation.
Dr Geoffrey Vaughan is the Chair of the CRC Committee.
Upon direction from the Minister the Committee may invite an application at any
time, or call for applications in specific research areas.
The CRC Committee may, from time to time, appoint Expert Panels to assist in
reviewing CRCs and assessing applications. There are currently two Expert Panels of
nine members each:
The Life Sciences Panel provides advice covering the natural sciences including
medical and rural research, biological aspects of environmental research, and
other topics with a predominantly biological orientation.
The Physical Sciences and Engineering Panel provides advice covering manu-
facturing, the physical and chemical sciences, mineral and earth sciences, in-
formation technology, physical aspects of the environmental sciences, and all
engineering fields.
Other advisory panels are appointed as required.

13
Evaluation of the CRC Programme 2003

2.4 CRC participants

At the strategic level are executive managers of the organisations and institutions that
participate in CRCs and who make decisions about the form and level of commitment
to CRCs. They include university Deputy Vice Chancellors (Research), Corporate
R&D Executives, Heads of Publicly Funded Research Agencies.
Drawing on data in the Department of Education, Science and Training database, a
profile of participation in CRCs can be derived. In Table 12 the number of organisa-
tions participating in each CRC is listed, indicating that “industry” represents 37.7
percent of core participants, universities represent 30 percent, Commonwealth Pub-
licly Funded Research Agencies 12 percent and State Government just under 13
percent.
Table 12: CRC Participant profiles
Core Participants Other Participants
Core Role Supporting Total Supporting Role
Role
No % No No % No %
Industry
Industry Association/Organisation 33 4.4 2 37 3.8 13 5.8
Rural RDC 11 1.5 5 16 1.7 2 0.9
Businesses – Private 197 26.3 16 213 22.1 123 54.4
Business – Public 41 5.5 1 42 4.4 0.0
282 37.7 24 308 32.0 138 61.1
University
University – Australia 225 30.0 153 378 39.3 16 7.1
University – Overseas 8 3.5
TAFE/School 1 0.1 1 0.1 2 0.9
226 30.2 153 379 39.4 26 11.5
Government
Commonwealth Publicly Funded Research Agency 89 11.9 9 98 10.2 0.0
Government – Commonwealth (Other) 21 2.8 2 24 2.5 2 0.9
Government – State 96 12.8 15 111 11.5 29 12.8
206 27.5 26 233 24.2 31 13.7
Research Institutes 33 4.4 8 41 4.3 25 11.1
NGO 2 0.3 2 0.2 6 2.7
749 100.0 211 963 100.0 226 100.0
Source: Department of Education, Science and Training , CRC Management Data Questionnaire Database

Table 12 does not provide any indication of the scale or extent of CRC participation,
although it does provide an indication of the scope of participation.
In the past the level of strategic commitment from participant organisations to the
CRCs has been “permissive” rather than “strategic”. Support was generally based on
agreement to “bottom up” research proposals and the attractiveness of leveraging
Commonwealth funds. However, during the course of the Evaluation, universities,
the CSIRO, State Government agencies, and public and private enterprise research
divisions indicated they would be taking a more deliberative approach to their in-
volvement in CRCs in the future, and in particular, how CRCs related to their overall
research priorities and directions.
At the business levels are the people who plan and manage the resource budgets
(funds, staff, property) that form the basis of participation in CRCs. They include the
Faculty Deans, Heads of Research Divisions, Corporate Research managers. As
resources become tighter, business managers are looking more closely at the scope of
their commitments, including their investments in CRCs, in terms of the value they
contribute to their research strategies, priorities and directions.

14
Evaluation of the CRC Programme 2003

2.5 CRC entities

The CRC “entity” is the vehicle for the delivery of CRC outcomes. It is generally an
unincorporated joint venture, formalised through a “centre agreement”. In a few
cases, the entity is a company incorporated under the provisions of the Corporations
Law.
Under the 2002 CRC Guidelines for Applicants 2002 Selection Round and General
Principles of Centre Operations, new CRCs are strongly encouraged to be incorpo-
rated, or adopt an incorporated structure for selected aspects of their operations, such
as commercialisation of intellectual property and new business development.
CRCs are effectively small enterprises created to “achieve real outcomes of national
economic, environmental and social significance”.
Based on data relating to resource contributions, the “average” CRC has an annual
budget in the region of $12m and 52 professional full time equivalent staff (FTE) and
10 non-professional staff FTEs. The actual number of staff involved in a CRC may
be considerably higher, depending on the size and scope of the fractional allocations.
Based upon the CRCs currently in existence, the annual cash budget managed by the
average CRC is in the region of $4.6m. From a commercial perspective, this is a very
small business operation. However, over the seven year life of the CRC, the level of
commitment amounts to a total of $32m – or $84m including in-kind contributions.
From a management perspective there is a paradox in that a CRC is created for a
defined period of time (up to seven years) to deliver agreed outputs and outcomes
specified in a contract with the Commonwealth, but is structured and managed in a
corporate and taxation environment as if it were a going concern with an infinite life -
without the Commonwealth being party to the structural agreement.
There are no pre-defined management and organisational structures for CRCs – or
more generally, for any joint venture arrangements once established. The issue of
partnership relationship management in joint venture arrangements is now receiving
increased attention in the management literature. A recent study concludes that in
order to maximise a joint venture’s potential over the course of its life, participants
“must pay more attention to the impact of partner relations on the performance of
their offspring”.18
The linkage between relationship management and joint venture success, as indicated
by achieving the results intended by participants, is now recognised as a subject
worthy of serious study.19 The experience of CRCs over the last 12 years provides
important insights and experience relevant to the development of best practice in joint
venture relationship management not only in research collaboration but more gener-

18
Bettina Buchel, "Managing Partner Relations in Joint Ventures," Sloan Management Review 44, no. 4 (2003)
19
Ibid.. There have been many studies that canvass issues in relationship management, and particularly the potential to create
value through collaboration; but the matter of how this is done and the management skills and capabilities required in managing
the joint venture has received much less attention. See for example Yves L Doz and Gary Hamel, Alliance Advantage: The Art of
Creating Value Through Partnering (Boston: Harvard Business School Press, 1998) and Robert E Spekman and Lynn A Isabella,
Alliance Competence: Maximizing the Value of Your Partnerships (New York: Wiley, 2000) For a study relevant to the
Department of Education, Science and Training, see Howard Partners and ACIIC, A Case Study of a Strategic Alliance
(Canberra: Department of Education, Training and Youth Affairs, 1999)

15
Evaluation of the CRC Programme 2003

ally in joint venture arrangements within and between the public, private and non-
government sectors.
The comments that follow provide a description of basic CRC joint venture manage-
ment arrangements. Comments on performance and the scope for improvement are
made at various points later in the Report.

2.6 The CRC Board

The Board of the CRC is responsible for the overall direction of the CRC. Where the
CRC is incorporated as a company, the responsibilities of the Board and its directors
are relatively clear. Where a CRC is a joint venture, in the form of a “strategic
alliance” or partnership there is a “flow through” relationship between the participants
and the researchers.
The 2002 CRC Guidelines for Applicants 2002 Selection Round and General Princi-
ples of Centre Operations provide that:
CRCs should adopt a structure headed by a governing board. Boards must have inde-
pendent chairs. Board members should include nominees of the main participating
research organisations in the CRC, but the majority of Board members should be
drawn from the industry or user participants, or be independent members, ie external
to the contributing parties.
The Board is accountable for the management of the CRC and setting overall poli-
cies, research directions, for utilisation, technology transfer, commercialisation and
budgets and for overseeing the executive.

The formation, structure, and operation of CRC Boards was raised as a major issue
during the Evaluation.

2.7 The Chief Executive Officer

The actual management of a CRC is generally the responsibility of a Chief Executive
Officer, who reports to a CRC Chair and to the Board. The Chief Executive Officer
is the lynchpin in the CRC system.
The 2002 CRC Guidelines for Applicants 2002 Selection Round and General Princi-
ples of Centre Operations provide that:
The application should nominate a Chief Executive Officer (CEO) for the proposed
CRC, or state as clearly as possible the procedure to be adopted for appointing the
CEO. Ideally, the CEO should be an experienced and highly regarded research man-
ager, who will lead and manage the activities of the CRC.
The CEO has the responsibility for the provision of research leadership, the day-to-
day management of the CRC, and the effective and efficient implementation of the
Board’s decisions.
The CEO must have the authority of the Board to manage the combined resources
committed to the CRC in order to meet the objectives of the CRC.
The CEO should generally be a full time, or close to full time, appointment.

The CEO role has becoming increasingly important as the system has evolved. In the
past, when most CRCs have had their origins in a group of academics seeking funding
to support their research, the “Chief Researcher” role paralleled that of a research

16
Evaluation of the CRC Programme 2003

project team leader. The most important attribute was credibility in science and
research.
CRCs require first-class leadership. Credibility in science and technology, together
with competency in intellectual property, business, and project management, and an
ability to operate joint ventures in a climate of ambiguity, has been found to be an
essential pre-requisite.
The matrix structure of the CRC Programme creates fundamental and far-reaching
challenges for management – at all levels. This management challenge has a major
impact on the success and potential for achievements of the Programme. Those CRCs
that are well managed tend to be associated with high levels of success, whilst those
that find the structure difficult have been associated with significant problems for
participants and researchers.
Matrix organisations are associated with a high level of decision-making power
delegated to a CEO, together with a high level of formal coordination and a high cost
of coordination. In business, the matrix form of organisation is required for demand-
ing strategic tasks. Because matrix structures violate many of the classic principles of
management - especially "unity of command" – they require top level support and
commitment.
In fact, one of the major achievements of the CRC Programme has been to develop a
cadre of industrial research managers who can manage effectively in the “matrix”
environment of cooperative research and link the cultures of research providers and
research users.

2.8 Researchers
Finally, there are the researchers and research users, who initially came together to
create the collaborative arrangement that becomes a CRC. They are the people who
have the task of undertaking and executing the research activities to achieve the
Centre and the Programme outcomes.
The 2002 CRC Guidelines for Applicants 2002 Selection Round and General Princi-
ples of Centre Operations provide that:
It is expected that a number of key individuals will make all or almost all of their
time available to the CRC. Large numbers of low time commitments have presented
management difficulties for CRCs in the past, and are of concern to the CRC Com-
mittee.

In the contemporary management environment people are finding it necessary to work

in several organisation structures at the same time, depending on the tasks being
undertaken. This of course creates significant personal challenges.
From discussions during the Evaluation, it was seen as essential that the key research-
ers provide a substantial proportion of their time to the CRC. From a mining industry
perspective for example, this proportion should be at least 60 percent and preferably
100 percent - particularly programme managers; smaller amounts, particularly the 10-
20 percent range, as often allocated by senior researchers, are seen to be inadequate.
University staff working in CRCs may spend only a proportion of their time involved
in the specific tasks associated with the project. This can cause significant difficulties

17
Evaluation of the CRC Programme 2003

when staff members employed in part-time capacities, are constantly required to

change tasks.
Where the CRC commitment represents only a small proportion of the employee’s
time, and when a number of staff are employed on this basis, there can be some loss
of esprit de corps and management problems ensue from this fragmentation of effort.
Trust is an essential component of the process.

2.9 Conclusion
A CRC represents a special and unique form of managed relationship between
research providers and research users. They are temporary, but relatively long term
organisations that involve a substantial commitment of resources to achieve a com-
mon goal.
A managed relationship differs from a market relationship in which knowledge
products (often represented as intellectual property) are “traded” between research
providers and users through contracts and other forms of commercial agreement. The
knowledge market generally involves a range of intermediaries, such as technology
transfer offices, licensing executives, technology marketers and venture investors20.
Universities and Publicly Funded Research Agencies are extensively involved in
market type relationships in undertaking contract research in various forms of re-
search agreement. They also seek to “commercialise” the results of research work
through licensing and sale of intellectual property rights and the formation of new
businesses with the assistance of venture capital investors. CRCs are increasingly
being involved in these transactions.
CRCs are not “virtual organisations”, or “cross functional teams” that imply an
absence of management: management is essential to organise the resources of the
CRC and to ensure that the intended results are achieved. The task is centred not on
control and direction, but on leadership.
The management goal in a CRC is to make productive the specific strengths and
knowledge of each researcher in the CRC.
Difficulties arise in the CRC environment where managed and market relationships
overlap, intersect and conflict: that is a CRC may be involved in managing an indus-
trial research partnership but may also be involved in marketing knowledge to users
outside the CRC. Many CRCs attempt to resolve this by working in a joint venture
relationship for their collaborative relationships and an incorporated company ar-
rangement for their market relationships.
Many CRC participants are looking for market relationships within a CRC frame-
work. That is, participants want to enter into specific contracts with researchers and
institutions within the CRC, but at the same time leverage the Commonwealth fund-
ing. Conversely, some participants become concerned when a research partnership is
involved in the creation of new business ventures in which they have little interest and
see no benefit.

20
Market and managed relationships differ from academic “gift” relationships where knowledge is “given” in expectation of
recognition, prestige, status and “eminence” . This relationship may also conflict with market and managed relationships

18
Evaluation of the CRC Programme 2003

There has also been a trend towards defining the CRC structure in terms of legal
obligations in a formal agreement rather than as a partnership of organisations that
are linked with a common purpose. Large players, such as the CSIRO and large
corporations have sought to take dominant positions in many CRCs, from the point of
negotiating the joint venture agreement to the conduct and governance of the centre.
This arises where one party has ownership of foundation IP and/or some major
facilities and seeks to establish a dominant position. This has been a major issue and
concern for CRC Managers and other participants.
Successful collaborations are based on a partnership of equals, not on the depend-
ence or control of one or more of the participants.
The requirements of the Corporations Law and the Taxation Law also work towards
creating a very cumbersome vehicle for CRCs where IP and the transfer of IP is
involved – either in or out of the CRC. This problem arises where there is an expecta-
tion that use and creation of IP will generate substantial financial returns for the CRC.
Accordingly, negotiating Centre Agreements has involved substantial costs in legal
and taxation advice and has diverted time and resources away from achieving the
results of the CRC.
These observations suggest a need to clearly differentiate between CRCs that are built
around managed relationships in an industrial research partnership framework, and
CRCs that want to enter into market relationships and generate substantial financial
returns through business development based on the licensing and sale of Intellectual
Property and the creation of new business ventures.
The Report recommends, in Part II, that a special CRC entity structure be created
under legislation that will reduce the costs and complexity associated with operation
of CRCs as unincorporated joint venture arrangements and the uncertainties associ-
ated with the provisions of the Taxation Law. The entity would give specific recog-
nition of a CRC as a public-private industrial research partnership. CRCs estab-
lished with the specific purpose of developing a business involving the commerciali-
sation of research should be established as incorporated entities.

19
Evaluation of the CRC Programme 2003

3: General Views on the Success of the CRC Programme

Views about the success of the CRC Programme vary considerably among stake-
holders. In this Section, the views from stakeholder categories are presented. The
difference in views reflects in large measure a lack of clarity, and some inconsistency,
in interpreting and applying the objectives of the Programme.

3.1 Overall perspectives

The following observations have been distilled from the consultations process:
Over the time frame of its operation the CRC Programme has injected new
funds into what was at the time a declining commitment to public sector re-
search support ($2 billion over period 1990-91 – 2001-02).
There is widespread support and agreement about the success of the CRC
Programme – but most will add a “but . . .” caveat.
Major contributions were seen as:
- Encouraged a number of “public good” issues to be addressed on a
national basis; substantial leverage in environment CRCs
- Allowed industry to “gain a seat at the table” in designing research
programmes.
- Allowed universities to “channel passion” for research into a
framework that has national/industry impact – a framework for
professional research management; scientists being oriented
towards solving problems.
- A powerful change agent in research culture – away from the
“ivory tower” culture of universities.
The CRC movement has aided the translation of thinking about transfer of
research outcomes into an industrial application, into action; it is no longer a
question of why but one of how.
Research entities need managing once created; it takes time to ramp up and
achieve results.
The CRC system needs to prosper and adapt – but now in a much more com-
plex, dynamic and contingent environment – effectively – “we want to keep the
CRC system, but we want it to work better for us”.
There is strong support for broadening the Programme to include greater
involvement of social sciences and humanities directly and indirectly; however,
social sciences and humanities need to work in areas of interest to government
and research priority.
There is a need to maintain a genuine inter- and cross-disciplinary focus -
balance between science based and engineering based innovation – and the rela-
tionship between the two.
Flexibility and responsiveness are key design features – responding to emerging
threats and opportunities eg Bushfires, Tourism.
There is an uneasy and unclear fit in the new and emerging research funding
landscape.

20
Evaluation of the CRC Programme 2003

The views of the key participants in the CRC system are canvassed below.

3.2 Research providers

3.2.1 University perspectives

The Programme is highly valued by universities in building research capacity and
capability; they see value in access to researchers and facilities in Commonwealth and
State publicly funded research facilities.
Universities are operating in an environment where there is increased funding pres-
sure resulting in greater commitment to prioritise, manage and coordinate their
research efforts. Strategies to achieve this include generating research clusters or
groups with critical mass, defining and supporting institutional areas of research
strength and aligning those areas with National Research Priorities. The long term
support provided by the CRC Programme is regarded as an important means for
coordinating and prioritising research effort and has a significant influence on re-
search direction and the longer term research horizon.21
More specific comments in relation to the involvement of universities are presented
from the perspective of predominantly research universities, the technology oriented
universities and the regional universities.

Research universities
The Group of Eight Universities, which collectively participate in most CRCs, see the
Programme in the following terms:
In general terms the Programme is seen as an important element of Australia’s re-
search and development landscape. A pioneer of public-private research engagement,
the Programme has created a successful model of commercialisation and technology
transfer which is recognised both nationally and internationally. Strengths of the Pro-
gramme include the long-term investment in innovation, the development of greater
cultural understanding between universities, public sector research agencies and
business, and research training success. Collaborative arrangements are critical to the
development of a culture of innovation which is in turn fundamental to Australia’s
competitive position in the global economy of knowledge.22

The major strengths of the Programme, from a University perspective are broadly as
follows:
Long term, big picture, significant research programmes: Seven years with a
possibility of extension and with support generally much larger than other
sources (such as ARC, NH&MRC); there are very few other programmes where
such long term, large investment commitment can be obtained; the funding is
sufficient to allow large research teams to be assembled and the possibility of
tackling “big” research questions.
Technology transfer: CRCs facilitate technology transfer from research organi-
sations to industry and to the wider community; universities receive substantial
kudos from successful commercialisation outcomes and CRCs are seen as iden-

21
Submission, The University of Sydney
22
Submission, The Group of Eight Universities

21
Evaluation of the CRC Programme 2003

tifiable mechanisms for technology transfer into the commercial, applied re-
search arena.
Research performance indicators: CRC income contributes directly to Category
4 research income; research contracts and consultancies contribute to Category
3 research income. This means that there is a downstream impact on the Re-
search Block Grant (about 30-40 cents for every $ that the University derives
from involvement in a CRC).
External salary support for staff: CRCs provide some direct salary support to
researchers involved in CRCs through significant consultancies in the short term
and royalty flows in the longer term.
Research critical mass: CRCs coordinate and focus research critical mass
through additional postdoctoral research staff, research associates, post graduate
students, equipment and support for infrastructure; they also create networks,
research contacts and collaborations outside the university.
Postgraduate students: Scholarship support; opportunities to work on well-
focussed research programmes, usually as part of a “high flying” research team.
Opportunity to gain experience working with industry – including working to
deadlines, milestones, a working knowledge of issues associated with IP protec-
tion. Providing postgraduate coursework programmes – including delivery of
courses or modules with a University post graduate course work programme.
Commercial returns: Some CRCs have provided a stream of revenue to a
university.
Universities have identified a number of weaknesses in the CRC system, mainly
relating to administration and management. These matters are addressed in Part II.

Technology universities
The commencement of the CRC Programme coincided with the introduction of the
unified national system for higher education. It provided an opportunity for the newly
formed “technology universities” to become involved in CRCs.
The Technology universities value the CRC system in terms of the opportunity to
work with industrial partners on a continuing basis and to offer extended education
programmes that provide, among other things, opportunities for PhD candidates to
develop management and leadership skills.23
Technology universities see opportunities to further develop education programmes
by exploring some of the other technical and personal skills domains.

Regional and smaller universities

The CRC system has been an important factor in enabling regional and smaller
universities to establish research capability and to develop specialisations in research

23
Submission, Curtin University

22
Evaluation of the CRC Programme 2003

areas. The Programme has also assisted in securing the leadership role of universities
in regional economic development.24
Regional universities are major participants in the CRC Programme in terms of the
relationship to overall research funding. For example, James Cook University argues
that on a per capita basis its involvement in the CRC Programme is one of the largest
amongst the Australian universities. All regional universities report in their Research
Management and Research Training Plans that the CRC Programme is a major
contributor to their areas of research strength.
Regional and smaller universities argue that by being strategic in their approach to
CRCs they can become major players, such as in the Antarctic, Aquafin and Forestry
CRCs.25 The system also provides a vehicle for researchers in all universities to adopt
a national focus and develop links with researchers in the larger institutions.
CRCs have been particularly important in developing research capability and applica-
tion in agriculture and natural resource management (NRM) in regional universities.
For example, the University of New England noted in its submission that:
. . . a major achievement of the CRC initiatives has been to allow regional universi-
ties like UNE to showcase R&D initiatives that otherwise would be more difficult to
promote. There are several spinoffs from this during a period when regional devel-
opment is a significant issue for both federal and state governments: the creation of
high tech centres (such as the International Livestock Research and Information Cen-
tre in Armidale, leveraging off CRC knowledge bases), economic contribution to re-
gional economies (through expenditure and personnel), and service to local industries
(especially beef and sheep in the New England context). In regional areas, simply,
CRCs have an extremely important capacity building function not necessarily appar-
ent in metropolitan settings.
. . . UNE has found that as a regional university, a major benefit from the CRCs has
been in postgraduate students coming to the centres. In light of national research
trends and priority setting, enhancement of that contribution from postgraduate stu-
dents would be an excellent investment not only in the specific industries, but also in
the investment in human capital. That will enable institutions like UNE to retain
global significance in areas like quantitative genetics, so central to the genome pro-
ject more widely.

The UNE argues that CRCs allow institutions as a whole to become involved in
constructive networks tackling the “big” problems. The $32 million Progeny Testing
Programme in the Beef CRC provides an important and significant example: it has
inestimable value for the industry but could not be tackled by single agencies alone.
The Programme has facilitated James Cook University involvement in issues of
global significance to the tropics.

Emerging pressures
The “bottom up” (researcher driven) nature of the Programme has developed to a
situation where individual universities, and universities in the system as a whole, are
coming under increasing pressure to find the overall level of resources required for

24
In the United States and Europe the role of universities in leading economic and industry development is well understood. See
Mary L Walshok and others, "Building Regional Innovation Capacity: the San Diego Experience," Industry and Higher
Education 16, no. 1 (2002)
25
Submission, University of Tasmania

23
Evaluation of the CRC Programme 2003

participation. As a result, universities are giving closer attention and more careful
management to their involvement than in the past. This follows from both the man-
agement and organisational issues referred to above and the increasingly tight funding
situation being encountered. Universities are committed to ongoing involvement in
CRCs.
A substantial amount of that pressure arises because most university researchers also
have teaching responsibilities. Consequently, if a researcher joins a CRC fulltime,
someone will have to fill in for them when they join the CRC. In view of the continu-
ous rise in the student/staff ratios this could cause major problems in some faculties.
This situation does not apply to government agencies such as Geoscience Australia or
CSIRO because their staff are usually fulltime researchers.
Part of the problem arises when university researchers commit at levels below that
which would require consideration by a Dean of “back filling” a position. That would
arise when the time commitment was below, say, 25 percent. With time commitment
of ten percent (half a day a week), as is occurring across the system, that time would
be seen as either marginal to ongoing research effort and is likely to be provided
without adjustment to other commitments. Alternatively, researchers may find that
they have to commit more time, and place themselves under considerable pressure to
provide a meaningful contribution to the research programme.
Universities are also concerned about the requirement to commit cash in submitting
CRC applications, that is, to become a research funder. There is a view that this is
inconsistent with their role as research providers. The level of cash contributions from
universities has become quite significant, particularly in the last three Rounds.
Despite the pressure on university resources, the cash contribution has continued to
rise and is becoming unsustainable.26
The Group of Eight Universities submitted that:
Due to the tied nature of most Commonwealth university funding there is little dis-
cretionary funding which the universities can draw on to fund their contribution to
programmes such as the CRC Programme. This is even more the case since the intro-
duction of Backing Australia’s Ability (BAA) through which additional Common-
wealth funding for a number of programmes, such as Federation Fellowships, also
leverage university funding on a matching basis. The Government’s higher education
reform package announced in the 2003-04 Budget, whilst generally welcome, does
not directly address this issue, as research funding is to be addressed separately in the
context of the future of the Backing Australia’s Ability Programme. In the meantime
the Group of Eight Universities will find it increasingly difficult to provide cash sup-
port for the CRC Programme.

More specifically, The University of Sydney advised:

The University of Sydney will continue to invest strongly in CRCs. However we
have made the strategic decision for all new CRCs that we will not directly invest
cash. In some cases the University has received very poor returns from CRCs and in
general The University is much better off investing “in house” to boost up the per-
sonnel and research infrastructure directly supporting the CRCs.27

26
Submission, the Group of Eight
27
Submission, The University of Sydney

24
Evaluation of the CRC Programme 2003

The regional and smaller universities also raised concerns about the cost of involve-
ment in CRCs and the need to take a more strategic approach. In its submission the
University of Tasmania commented that:
We have adopted the view that we prefer to contribute substantially to fewer CRCs
rather than in a small way to a larger number. It is important to note that the admin-
istrative costs of CRCs are reasonably high. Like all organisations, we need to
evaluate the returns from the investments we make in staff and student-time, infra-
structure and cash to CRCs.28

The overall conclusion is that Universities have valued their involvement in CRCs in
terms of building research capability, adopting a national approach to research,
broadening the focus of research training and postgraduate education, and providing
an opportunity for the smaller and regional universities to develop specialist capabili-
ties in areas such as agriculture and natural resource management. They are becom-
ing concerned about the growing cost of involvement and are looking towards adopt-
ing a more strategic involvement.
Many universities have reviewed their involvement in and commitment to research
centres and are looking for a “steady state” arrangement where they are involved in
CRCs at various stages of development (new, developing, mature, windup). A
number of universities have developed specific policies and protocols for involvement
in research centres generally.

3.2.2 Publicly Funded Research Agencies

The role, performance and behaviours of Publicly Funded Research Agencies
(PFRAs) in the CRC Programme was a major topic in discussions and consultations
during the Review. In many respects, these comments reflect tensions between the
“bottom up” logic of the CRC Programme and the corporate financial and institutional
pressures that exist with those organisations. Comments from the major PFRAs
about the Programme follow.

CSIRO
CSIRO has been active in the Programme since its inception and remains a strong
supporter of the Programme. It has participated in 95 of the 123 CRCs which have
commenced or renewed since 1990. Of the 64 CRCs active at June 30 2002, CSIRO
was in 46, with a multi-year financial commitment totaling $315m. CSIRO is a core
or supporting participant in 16 of the 21 new Round 8 CRCs announced in December
2002.
CSIRO has indicated that where it is a major player, its commitments comprise, on
average, 27 percent of the equity in the CRC. This amounts to 11 per cent of CSIRO
resources.
The CRC Programme has been an important vehicle for CSIRO’s collaboration with
universities. Thirty-three universities had worked with CSIRO to put together the 46
CRCs in which CSIRO was participating in June 2002 and individual universities

28
Submission, University of Tasmania

25
Evaluation of the CRC Programme 2003

were working with CSIRO in up to 10 separate centres. CSIRO had played a leading
role in developing some of these CRCs.
CSIRO considers that CRC collaborations between universities, CSIRO, industry and
other organisations have in many cases led to the coordination of Australia’s national
research effort in particular fields and helped achieve very significant research and
commercial outcomes.
In late 2002 the CSIRO Board asked CSIRO to review its participation in the CRC
Programme. In response to this request, CSIRO commissioned an external consulting
firm to conduct a stocktake to assess and evaluate the value CSIRO has created from
CRCs and to report on the findings from that assessment and their potential implica-
tions for CSIRO.
The stocktake found that:
The CRCs in which CSIRO participated had been successful overall and that
CSIRO’s participation had created value for Australia, for research clients and
for itself.
CSIRO had made significant contributions to its CRCs, though its interactions
with other CRC participants sometimes suffered from disparate agendas and
overt competition.
CSIRO’s value creation from CRCs related to the nature of the CRC and the
quality of CSIRO’s interactions with other participants.
To maximise future value from its participation in the Programme, CSIRO
should address the strategy it uses to select the CRCs in which it will participate
and the management of its participation.
The stocktake also indicated:
CSIRO is perceived as a difficult, but necessary partner by many CRCs.
Overlap between CRC objectives and CSIRO’s areas of research has led to
friction – each side seeing the other as a threat.
Apart from research overlap, CSIRO is perceived as too tough on legal, com-
mercial and governance issues, and most of this concern is aimed at CSIRO’s
corporate and legal staff.
These comments were reiterated and reinforced throughout the discussion and consul-
tations aspects of the Evaluation.
As a result of the stocktake, CSIRO is working to improve its processes and skills for
involvement in CRCs and to increase communication with the Department of Educa-
tion, Science and Training and CRCs. It is also working to implement a CSIRO CRC
secretariat with a broad charter to ensure it works effectively within the Organisation
to achieve the maximum return for all participants from the changes that have taken
place in Australia’s national innovation system since the introduction of the CRC
Programme.
The CSIRO Executive has decided to implement a number of specific changes in its
approach to CRCs:

26
Evaluation of the CRC Programme 2003

Set and share objectives for CSIRO involvement in CRCs at programme and
individual CRC level.
Ensure approval to negotiate and enter is sought before committing to new
CRCs.
Introduce formal performance evaluation for CSIRO involvement in CRCs.

Defence Science and Technology Organisation (DSTO)

DSTO currently has the lead responsibility within the Defence Department for overall
management of its involvement in the CRC Programme. This is based on DSTO
being the primary research organisation within Defence, and the need to ensure that
various legal obligations are complied with, such as financial reporting requirements
or the need to provide aggregate reporting to the Minister.
For DSTO to have joined a CRC demonstrates that it is seen to meet a range of
collaborative objectives, which include:
Providing science and technology advice to the ADF
Increasing opportunities for DSTO to transfer the results of Defence research
and development to the Defence industry
Providing access for industry and other agencies to DSTO’s research facilities
and expertise
Providing improved relations with industry/customers
Conferring a multiplier effect on defence research through DSTO’s collabora-
tion with research agencies.
For DSTO, joining a specific CRC must also meet the following criteria:
The broad DSTO requirements for collaboration are satisfied (contribution to
national wealth creation, leveraging R&D, technology transfer and sharing re-
search risks and benefits)
Research undertaken for the CRC would have been a formal part of the DSTO
planned programme of research (given the availability of the necessary re-
sources), even if the CRC had not existed
The area of research and development task work is a DSTO task, or part of a
DSTO task, and subject to the same review procedures as other DSTO tasks.
In summary, DSTO is therefore only involved in collaborative research like CRCs,
where there is a clear benefit to developing or supporting critical Defence capability.
An example of this is the CRC for Advanced Composite Structures, which is per-
ceived to have had a moderate impact at a National level in terms of an increased
capability to manufacture advanced composite structures, particularly those manufac-
tured using liquid moulding techniques.
Defence has been involved in the CRC Programme since the first CRCs were estab-
lished with both cash and in-kind contributions. Including both expended and com-
mitted funding from 1991-1992 through to 2005-2006, Defence’s overall involvement
in the CRC Programme is predicted to come to over $66 million, of which 96 percent
is DSTO sponsored.

27
Evaluation of the CRC Programme 2003

Defence is continuing to develop a global picture of its financial commitments to

CRCs. Although it has stated the agreed cash and in-kind contributions as part of its
CRC membership obligations, mechanisms to capture the full extent of
DSTO/Defence contribution to CRCs are still being developed and refined.
Although Defence has a range of international engagements with allied nations, the
nature of these government-to-government agreements often exclude commercial use
of the information generated on the grounds of national security.
From Defence’s perspective, there is greater benefit in investigating increased col-
laboration with international research networks and civilian international science and
technology cooperation programmes, eg the U.K. Towers of Excellence Programme,
as a mechanism for extending CRC interaction, a process DSTO continues to explore.

3.3 Research users

The views of industry vary across sectors. The views of key industry representatives
are captured in the following paragraphs.

3.3.1 Agriculture
State Departments of Agriculture are major participants and users of CRC research in
the interests of primary producers and the broader objective of sustainable agriculture.
NSW Agriculture believes that the CRC Programme fills an important niche in the
Australian research landscape, allowing focussing of scattered resources on achieving
common goals, particularly in the agricultural sphere. The Department notes:
The relatively long duration of CRCs allows real communities of interest to develop
between researchers and industry, and outcomes have been enormous. The basic
framework of the Programme is very sound and a great deal of experience has now
been amassed nationally in how to make them work.

The Department adds that commercialisation of outcomes in agricultural CRCs has

come about almost entirely through the rapid dissemination of CRC findings to “well-
primed industry participants, who are waiting eagerly to adopt the results of the
research which they asked for”. This leads to behaviour change on farms, with joint
improvements in economic and environmental benefits, and consequent social bene-
fits. The Department states:
It is critical that the government recognise this and not expect major returns from
patents, royalties etc in these largely public good CRCs.
Increasing environmental pressures mean that the need for these agricultural CRCs
will increase. Their merit is their joint focus on profitability and sustainability, which
hopefully will be more effective at mobilising private dollars from land managers to
help with environmental remediation.

The Queensland Department of Primary Industries pointed out in a submission that

CRCs provide a forum for establishing a strategic approach to a broad research topic
across the leading research organisations that make up the core and supporting
partners. The Department adds:
In general, the CRC Programme has facilitated useful collaborations with a wide
range of other research organisations. Collaboration has, for example, permitted ac-
cess to intellectual property held in other organisations and the IP has been used to

28
Evaluation of the CRC Programme 2003

enhance DPI’s own capabilities. The creation of a CRC however, does not necessar-
ily automatically deliver collaboration benefits, as a successful networking outcome
depends very much on the people involved in the directorate and the management
committees, particularly with respect to personalities and attitudes. Australian sci-
ence is in general poorly funded, and consequently very competitive. Poor funding
can impact on collaboration. When funds are scarce, there is a strong tendency for
scientists to use available funds for their own units (to ensure their capacity to de-
liver) in the first instance, and secondarily for collaborative ventures. Collaboration
is much easier when funding is ample.29

The Queensland DPI submitted that it has developed closer links with universities and
postgraduate students and this has enhanced the creativity of research being under-
taken. This view was confirmed in discussions with the West Australian Department
of Agriculture.
Consistent with the concerns of other agencies, the Queensland DPI notes that the
financial inputs that partners are required to make (in both cash and in kind) is high
and the funding injected into CRCs into the projects of partner organisations is
sometimes less than the partner organisations can obtain through other sources.
The Western Australian Department of Agriculture informed the Evaluation that it has
had:
… a largely positive experience from its involvement in the CRC Programme which
has provided either valuable scientific support to our existing R&D activities or has
brought additional resources to important areas where we have limited or no capac-
ity.30

The Department noted concerns about the costs associated with bid preparation and
the start-up and operational phases of CRCs and that “Industry expectations have not
been met in many cases as the long-term and basic nature of much of the research has
yet to deliver implementable outputs”.
Consistent with other comments, the Department added:
DAWA expects to support involvement in the Programme into the future but must
consider very carefully commitments to new CRCs given an ever increasing demand
on shrinking resources, and the significant management costs associated with CRCs.
Future involvement will depend increasingly on clear, shared objectives and confi-
dence that outputs of value to the industries we serve and the State of Western Aus-
tralia will flow and have a genuine impact.

3.3.2 Environmental and natural resource management agencies

A significant amount of CRC activity relates to activities in the environment and
natural resource management arenas. The major research users in this category are
State Departments of natural resources.
The Queensland Department of Natural Resources and Mines pointed out in a submis-
sion to the Evaluation that:

29
Submission, Queensland Department of Primary Industries. Emphasis added. Management and organisation literature points
to the existence of “organisational slack” as a pre-condition for problem solving activity and innovation.
30
Submission, Department of Agriculture - Western Australia.

29
Evaluation of the CRC Programme 2003

The CRC Programme has substantially raised the profile of natural resource and en-
vironmental R&D in Queensland and nationally, and is providing an improved scien-
tific basis to support natural resource management decisions.
Much of this R&D would not have been otherwise undertaken or if it had been,
knowledge of its existence would have been restricted, or it would have been under-
taken by a single organisation in isolation without the benefits of networked science.

The Department pointed out, however that:

The CRC Programme has not, however, contributed to the development of private re-
search capacity in the natural resource/environmental area. This R&D area is still –
and likely to continue to be – funded publicly, as this is essentially public science that
contributes to natural resource management planning, policy and decision-making by
governments and community groups and resource users.

In areas such as water allocation, landscape management for salinity and water
contamination, clean coal research, and greenhouse gas emissions, the Queensland
Department of Natural Resources and Mines considers that CRCs have provided State
agencies with a link to a broader set of skills than currently resides within agencies.
In return, agencies have provided practical on-ground experience and often extensive
data sets that could be used by the combined research group.
The CRC Programme is also seen by the Department to provide a useful framework
for better integration of social and economic dimensions into biophysical and other
‘pure’ research, which in turn enhances the relevance and likelihood of uptake of
R&D results. This is especially the case when the desired outcomes involve attitudi-
nal or behavioural change on the part of members of the general community.
The Department also notes that collaboration with community groups has only
occurred when a CRC has put the resources and effort into making it happen. With
the increasing devolvement of decision-making to regional or catchment bodies, as is
now required under the Natural Heritage Trust Programme (NHT2), this is an area
where there is certainly a need for greater CRC collaborative linkages.

3.3.3 Information and communications industries

The information and communications technology (ICT) sector has experienced highly
volatile industry conditions over the last decade which has impacted in CRC partici-
pation and performance.
Globally rapid growth and sudden down turn from about 2000-2001 onwards is
mirrored by the earlier rounds of CRCs being well represented in basic applied ICT
research areas such as CRCs in Photonics, Telecommunications, Satellite Systems,
Enterprise Distributed Systems Technology, and Sensor Signal and Information
Processing. In more recent rounds there has been a change towards market-specific
and applications driven CRCs, such as that for Technology Enabled Capital Markets
and Smart Internet Technology.
Executives in this industry when consulted indicated the major limiting factors in
relation to participation in CRCs to be as follows:
The global ICT industry downturn with flow on consequences such as the loss
of local capability and investment (for example, the recent closure of Ericsson

30
Evaluation of the CRC Programme 2003

AsiaPacificLab R&D centre in Australia, and the departure of other major firms
and their commitments to CRCs)
The challenge for photonics to realise the rate of growth initially anticipated,
despite successfully raising significant venture capital and spinning-off a small
group of new companies
The diffuse leadership and lack of an overarching vision for the Australian ICT
industry over the last decade
The huge divide in resources/capability/global reach of major multinationals in
this sector and the many much smaller local software development companies,
too small to get effectively engaged in CRCs.
Seven year CRC contracts (with one year notice of resignation) in such an uncertain
business climate has led in the past to minor disputes on the terms for early departure
of CRC participants. Participants now seek far greater flexibility in CRC contract
tenure.
There have been a number of recent initiatives to address these problems, including:
Industry Action Agendas in Electronics (2001-02); Information Industries
(2000-01); Spatial Information Industry (2000-01); Digital Broadcasting (2000-
01)
The publication of the ICT Framework for the Future (comprising various and
multiple reports and statistical maps of the industry) by the Commonwealth in
April 2003, and summarising current national ICT R&D in this sector31
Formation of the ICT Centre of Excellence, National ICT Australia (NICTA).
Whilst NICTA has been welcomed by the industry executives consulted, it was also
raised as a concern about national R&D coordination in the ICT sector, especially the
relationship with CRCs.32
The process leading to the establishment of NICTA involved inputs from many
stakeholders in government, research sectors and industry who all considered that
Australia's capacity for world-class ICT R&D and its commercialisation was com-
paratively weak. It was weak in part because of Australia's industry structure which
includes no large indigenous ICT firms other than Telstra and because very few
Australian public sector research groups were able to mount critical masses of leading
researchers.33
A Council of ICT CRCs has recently been created and CRCs will be involved in the
research outlook forum being jointly organised by NICTA, CSIRO and DSTO for
September 2003.
A recurring theme amongst the CRCs, businesses and publicly funded research
institutions is the need for flexibility. Specific comments related to:
Mechanisms to allow adjustments to agreements to reflect the changing envi-
ronment and new opportunities that may arise

31
Australia. Framework for the Future Steering Committee, Enabling Our Future: A Framework for the Information and
Communications Technology Industry (Canberra: Department of Communications, Information Technology and the Arts, 2003)
32
Ibid. pp. 27-33.
33
Submission, Department of Communications, Information Technology and the Arts

31
Evaluation of the CRC Programme 2003

Merging of ICT into other CRC industry sectors as an ‘enabler’ as it focussed

on an industry need
Trying to commercialise some ‘mini-project/concept’ in an environment where
major corporate participants did not want ‘smart little bits of technology’.
Industry executives indicated a preference for bilateral relationships with quality and
trusted university academics that could deliver on industry needs, rather than going
with the complexity of a CRC joint venture.
There is, of course the view that the appropriate path to market for innovations in ICT
CRCs is less through adoption by an industry participant but more through new
business creation in the form of a start-up company. This issue is taken up again later
in the Report.

3.3.4 Manufacturing and services

The CRC Programme was initiated with a major focus on improving Australia’s
industrial base, including advanced manufacturing and drawing on the emerging
fields of material science. There are currently several CRCs in this area, including the
CRCs for Advanced Composite Structures, CAST Metals Manufacturing, Polymers
and Welded Structures.
There have been fewer CRCs in those areas of manufacturing where innovation
occurs close to market, for example in food processing where there have been only
two CRCs - despite food processing being one of Australia’s largest manufacturing
segments.34
In a submission the Australian Chamber of Commerce and Industry pointed out that
the CRC Programme is “an effective cross sectoral approach developed for promoting
more effective linkages between research and commercial organisations, and for
promoting specific, outcomes-focussed research and commercialisation in the longer
term” and that it “is a serious attempt to:
Bring together research providers with research users
Change the culture of university researchers and researchers in bodies such as
CSIRO towards more commercial outcomes
Promote business focussed R&D.”
ACCI notes that:
In general, public R&D has had less than optimal benefit to the majority of business
enterprises because frequently it lacks commercial application. Over the last few
years there has been an objective that public R&D be more commercially focussed
and business oriented. On the other hand, business R&D in Australia has been lim-
ited compared to comparable developed countries. There has been recognition of the
need to promote greater focus in the private sector on innovation and R&D, and
commercialisation within Australia of that R&D.
In industry’s view, the CRC Programme has been far more successful than the old
model of public institutions doing the research and the private sector commercialis-
ing it into products. Universities and CSIRO have made efforts to improve their co-

34
The newly created National Food Industry Strategy Limited is supporting the creation of Centres of Excellence in Food
Processing as part of the Food Industry Action Agenda

32
Evaluation of the CRC Programme 2003

operative efforts with industry in the last few years, but in general are still less effec-
tive and user friendly than the CRCs. Indeed, an important spin-off of the CRC Pro-
gramme is the cultural change that it is promoting in these organisations more
broadly.

ACCI believes that the CRC Programme is an effective policy instrument but there is
potential to streamline the operation of the Programme. It suggests that one of the
major challenges for the Programme is to achieve long-term business support, particu-
larly from SMEs, to the CRC process. It notes, however, that as businesses constantly
evolve through mergers, takeovers and other changes, difficulties arise in maintaining
continuity of business involvement.
The Australian Industry Group (AiG) has undertaken an extensive study of manufac-
turer’s use of CRCs as part of its study into R&D Expenditures and Drivers.35 It
found that CRCs have little engagement with the manufacturing sector. The study
reported that only four percent of manufacturers engaged in R&D had used a CRC as
part of this activity, the vast majority of these firms being large companies employing
more than 500 people.
The AiG suggested that the finding reflects the broader findings of both the AiG and
OECD research into business R&D activity in that Australia’s R&D effort compared
to other OECD countries is disproportionately focussed on public research, which
lacks strong commercial benefits and results in weaker spillover effects to the broader
economy. The Group notes that all other countries (with the exception of New
Zealand) put the balance of their R&D into private (businesses) rather than public
R&D.36

3.3.5 Mining and energy

The CRC Programme is well established in the mining and energy sector. CRCs have
taken over much of the research previously undertaken by individual companies.37
They are seen as an effective method of providing focussed, applied research when
collaboration is needed between industry, Government and community. The Queen-
sland Department of Natural Resources and Mines submitted that:
The networking and joint R&D which the CRC process provides has resulted in col-
laborative, high quality R&D which is generally accessible. It has also added to
Queensland’s and the nation’s intellectual property and capability on natural resource
management, and has driven the research dollar further through the shared resources
(cash and in-kind) and the combination of intellectual and enterprise talents.

In the mining sector the industry input (both involvement and financial commitment),
and particularly at the small to medium enterprise level, is seen as a significant
strength of CRCs. It has allowed research to be focussed on specific priority areas
and local issues that require practical solutions. The networking has also resulted in
organisations such as universities and CSIRO becoming more aware of the industry
priorities for natural resource management and putting R&D resources into these
activities.

35
Australian Industry Group, Research and Development: Expenditure Drivers in Australian Manufacturing (Sydney: Australian
Industry Group, 2002).
36
Submission, AiG,
37
Submission, Queensland Department of Natural Resources and Mines

33
Evaluation of the CRC Programme 2003

Much of the involvement of the mining industry occurs through AMIRA, an industry
association which manages collaborative research for members operating in a global
minerals industry. The Association considers that by taking a partnership approach to
research and development that is managed by AMIRA, members enhance their
competitive position through access to leading edge technology.
AMIRA is a supporter of the CRC Programme on the basis that much good research
is done using contestable ‘soft’ funding. Many of the Mining CRCs generate substan-
tial amounts of revenue from contract research. However, a concern was raised in a
submission that some of the mining CRCs are “crowding out” private sector contract
research.

3.3.6 Pharmaceuticals and biotechnology

The CRC Programme supports a number of CRCs that focus on research that aims to
deliver new drugs and apply biotechnology in clinical processes and procedures.
Research in pharmaceuticals/biotechnology is associated with high costs and consid-
erable technical and market risk. It is difficult for research groups who may discover
a new compound to take the product to market as a “start-up” for these reasons.
Within the industry there has been significant consolidation and mergers of small
biotechnology companies over the past decade essentially to gain access to “promis-
ing pipelines”.
In a submission to the Evaluation GlaxcoSmithKline argued that:
. . .it is important to view CRCs as providing an additional means of encouraging col-
laboration in addition to its own activities. Government support provides important
facilitory support. Similarly, the pharmaceutical industry has a long record of col-
laborative research, particularly with Australia’s publicly and privately funded health
research institutes. The CRC for Asthma represents a continuation of this willingness
to continue to invest in Australian health research and plays an important role in forg-
ing stronger links between the research sector and industry.38

From a GSK perspective the collaborative nature of the CRC Programme has allowed
an effective exchange of information and expertise between industry and the aca-
demic research community. This is seen to be of particular importance given the rapid
pace of change and enormous costs of development which can inhibit the ability of
many smaller companies and academia to keep up with latest developments. There-
fore having membership of large global companies such as GSK provides improved
access to developments and resources.
GSK points out that the collaborative nature of CRCs, their focus on developing
partnerships and commercialisation and the broader involvement of industry partners
assists in ensuring that the research expertise and experience that exists within indus-
try better informs academic research. This is also seen to be dependent on an effec-
tive administrative structure that establishes the committee/advisory bodies that
allows the true interflow of feedback and directions between industry and academia.
The company makes an important and useful comment on the relationship between
“public benefit” and “commercial” orientation of CRCs:

38
Submission, GlaxcoSmithKline

34
Evaluation of the CRC Programme 2003

One of the key aims of the CRC Programme is to deliver both research of public
benefit and that which enhances the transfer of research outputs into commercial out-
comes. Similarly, the CRC for Asthma aims to improve the understanding of the
causes of asthma and its treatment as well as commercialise its research outcomes.
These aims should not be seen as competing with one another as they are often com-
plementary.

In relation to commercialisation, GSK suggests that:

While CRCs are most effective at ensuring collaboration in research, participants
should understand that the challenge of commercialising research is often more effec-
tive through utilising other resources and government programmes. Therefore the
CRC structure needs to be closely aligned with other Government research pro-
grammes.

The GSK experience with the CRC Asthma has been positive. This reflects on the
membership and administrative structure.

3.3.7 Medical devices

There is a number of CRCs that focus on research in relation to medical devices. They
include the Cochlear and Vision CRCs.
In these areas CRC industry involvement is often associated with one business – as
that business largely constitutes the industry. Moreover, as with ICT, the path to
market is often through the creation of new start-up companies rather than through
take up with an established industrial organisation.

3.3.8 Water industry

The water industry and associated utilities have interests in four CRCs: Catchment
Hydrology, Freshwater Ecology, Water Quality and Treatment, and Coastal Zone,
Estuary and Waterway Management. These CRCs have established research platforms
spanning the entire length of Australian waterways. The industry participants consti-
tute a mix of both urban and rural/regional water management authorities and State
Departments typically covering all aspects of water resource management.
Melbourne Water advised the Evaluation Team that:
Melbourne Water has been a strong supporter of the CRC Programme, having been a
member of three CRCs, Catchment Hydrology, Freshwater Ecology and Water Qual-
ity and Treatment since their formation.
Each of these CRCs has been highly successful and has received strong support from
industry.
The CRC for Water Quality and Treatment has developed excellent global linkages
with international research agencies through the Global Research Coalition. It has
had a major influence in the adoption of a new risk based framework for ensuring
drinking water quality in both the WHO and Australian drinking water guidelines.
Melbourne Water made a strategic decision in the early 1990s to outsource R&D to
ensure that the organisation could access world-leading research in a cost effective
way. This has been supported by Melbourne water’s skill based Board and they have
given strong endorsement to the organisation’s involvement in the CRC Pro-
gramme.39

39
Submission, Melbourne Water

35
Evaluation of the CRC Programme 2003

Discussions with CEOs of the water CRCs and with technology transfer “knowledge
brokers” working with Melbourne Water indicate that the general experience of end
user water authorities and utilities towards CRCs is positive and is similar to views
held by State agricultural agencies. These CRCs as a group have established a reputa-
tion for consulting on major national water projects.
The CEOs of water CRCs meet periodically, and there are some R&D programmes
spanning them, but no coherent or consistently applied enviro-economic analysis of
their combined national benefit has ever been made across the group.

3.4 Other stakeholder views

3.4.1 The Department of Industry, Tourism and Resources
The Department of Industry, Tourism and Resources submitted that:
The Programme continues to offer a combination of features that are not found else-
where in the Australian innovation system. These include: scale of project-focussed
funding; an emphasis on collaboration between research groups; and the certainty of
funding over a longer time frame than most other programmes.

The Department notes:

ITR has had positive interaction with particular CRCs. In the CRCs where the ITR
portfolio agency Geoscience Australia has been involved, the Programme has en-
hanced collaboration between government agencies at both Commonwealth and State
level and the universities to focus on topics of public interest and concern. This
would not have happened under an ARC Centre of Excellence Model because the re-
sources deployed in the average CRC and the disciplinary range is significantly
higher than can be realised in ARC Centres.
CRCs are used by Invest Australia to promote Australian capabilities in ICT, Bio-
technology, and Nanotechnology. They demonstrate the interconnectedness of R&D
in Australia and offer useful examples of cutting edge R&D, with multi-national in-
volvement/investment and international linkages.
The CRC for Tourism provides a crucial research role for industry which is not pro-
vided by any other organisation. This CRC has a strong commitment to expanding
the commercialisation of its research, having established three spin-off companies.
While the industry is dominated by resource limited SMEs, the CRC is actively pur-
suing the involvement of these businesses in its Programme. Engagement with
SMEs is largely through industry associations as full or associate participants. This
CRC is also very active in developing international links.

3.4.2 The Department of Agriculture, Fisheries and Forestry

The Department of Agriculture, Fisheries and Forestry has an interest in the outcomes
of a number of CRCs in the agriculture and natural resource management areas. It
advised the Evaluation that:
CRCs form a part of the research infrastructure underpinning the Department’s in-
dustries . . . a significant proportion of CRCs in each funding round are focussed on
our portfolio industries and associated technologies or on environmental concerns of
importance to our portfolio industries.40

40
Submission, Department of Agriculture, Fisheries and Forestry

36
Evaluation of the CRC Programme 2003

Much of the involvement of the Department is through the Rural Research and
Development Corporations that participate directly in a number of CRCs. The
Department’s Bureau of Resource Sciences is also involved in some CRCs. The
Department is also a direct participant in the new Biosecurity CRC.

3.4.3 The Department of Communications, Information Technology and the Arts

The Department of Communications, Information Technology and the Arts made the
following general comments in relation to the Programme:
From an ICT perspective, the CRC Programme has encouraged increased cooperation between
universities and industry and this cooperation has been successful in producing some significant
research and commercial outcomes.
The Programme has not only provided a boost to the research expenditure in the ICT area, but
has been influential in building a substantial body of planned research focussed around particular
research issues and practical problems.
The Programme has been influential in encouraging cross-and multi-disciplinary research. One
of the significant emerging trends in the research conducted in OECD countries is the rise in
multi-disciplinary research.
The CRC Programme has also encouraged a greater focus on commercialisation and the transfer
of knowledge to industry; 16 ICT companies have been formed between 1992 and 2001 in the 7
ICT CRCs established to January 2003.
Many postgraduate students from the ICT CRCs have found jobs with industry.
All the ICT CRCs have established technology transfer companies to encourage the transfer of
CRC tacit knowledge.

The Department considers that the increase in overall ICT research expertise and
activity provides a substantial opportunity for the ICT CRCs by expanding the scale
of possible research and deepening the pool of research expertise. Taking full advan-
tage of this opportunity requires the ICT CRCs to take the opportunity for greater
collaboration between them and also with other relevant programmes and institutions.
The Department suggests that the design of the CRC Programme be refined to en-
courage and give greater reward for collaborative efforts.

3.4.4 Environment Australia

The Department provided detailed information about the way in which the outputs of
several of the CRCs associated with the portfolio have been reflected in public policy
and programmes. For example:
The CRC for Catchment Hydrology is developing catchment models and
decision-support tools that will form the basis to coastal, catchment and regional
water quality management and protection in Australia. These are vital tools, the
need for which is demonstrated in the Commonwealth’s Framework for Marine
and Estuarine Water Quality Protection, applied through the Coastal Catch-
ments Initiative.
CRC Catchment Hydrology tools are critical for developing management
strategies to address, for example, water quality in the Great Barrier Reef. These
tools are currently being implemented for Port Phillip Bay, Moreton Bay and
will underpin implementation of the Coastal Catchments Initiative and any
likely national approach to implementing UNEP’s Global Programme of Action
for the Protection of the Marine Environment from Land-based Activities
(GPA).

37
Evaluation of the CRC Programme 2003

The Australian Greenhouse Office submitted that:

The AGO supports the contention that the CRC Programme has contributed to Aus-
tralia’s economic growth, social well-being, and environmental outcomes. In the
case of the environment-based CRCs, the opportunities, and indeed the intent, for
immediate economic benefit may not be the prime driver for the CRC. Rather it is
intended and fully understood that the benefits of research in the environmentally-
based CRCs need a longer pay-back time, often beyond the lifespan of the CRC. The
AGO supports the current mix of commercially-driven and public-good CRCs in the
overall Programme.
...
The AGO is concerned about the declining capacity in Australia for world-leading
research and development. Of course there are bright spots, but criteria such as cita-
tion indices, and R&D as a proportion of GDP are clear warning signs. The AGO be-
lieves that within this context, the CRC Programme has continued to encourage as
much as possible an excellent standard of research.

3.4.5 The Australian Academy of Science

The Australian Academy of Science is a supporter of the Programme, but is con-
cerned that the contribution of the CRC Programme may be constrained if CRC
selection criteria “… prejudice the development of CRCs in key areas in which
current Australian industry participation is weak”:
CRCs have a role in developing emergent industries. The Australian Photonics CRC
is an excellent example of a CRC that has promoted an emergent Australian industry
and, in the process, generated several SMEs." An over reliance on the existence of
industry partners would limit the effectiveness of this Programme and hence its abil-
ity to stimulate new emerging industries in Australia. A whole-of-government ap-
proach would provide a means of ensuring that Programme-specific investment se-
lection criteria align with a forward strategy for Australian economic development,
and consequently avoid such problems.

3.4.6 Federation of Australian Scientific and Technology Societies

The Federation of Australian Scientific and Technology Societies (FASTS) advised in
a submission to the Evaluation that:
FASTS overwhelmingly believes that the CRC scheme has been a most useful addi-
tional mechanism to promote cooperative research in Australia and has conferred
many cultural benefits both in the conduct of research and in the capture of innova-
tion since its introduction in 1991. It is now widely accepted by the public and pri-
vate research sectors and is seen by Australian industry as a way of ensuring that pre-
competitive research is conducted, interesting developments are tracked, and innova-
tions likely to benefit Australian industry are captured and applied.

FASTS considers that CRCs have greatly assisted in encouraging R&D networking
within Australian industry and have provided both academics and research students
with a much better understanding of motivating factors for industry in the pursuit of
R&D and in implementing innovation.
FASTS also considers that there are some features that merit further refinement, with
the view of ensuring that the Programme achieves its full potential as an important
element in research and innovation activity in Australia.

38
Evaluation of the CRC Programme 2003

3.4.7 Australian Geoscience Council

The Australian Geoscience Council pointed out in a submission that one of the issues
that needs further refinement in the Programme is the extent to which researchers in
CRCs form new research partnerships that transcend organisational barriers. There is
a strong view that the Programme has effected substantial cultural change in this
regard:
One of CRCs’ most important impacts has been to effect a real culture change in the
different science and technology sectors within Australia. Barriers between industry,
academia and government research agencies have been broken down and scientists
have been encouraged to get out of his/her laboratory and actively cooperate with
other colleagues in different agencies.
In the future, the most worthwhile outputs from the SET sector are most likely to
come from multidisciplinary teams, and the CRCs are excellent vehicles to foster this
interaction. 41

This view is widely shared within both the university sector and in industry.

3.4.8 State Governments

State governments are heavily involved in CRCs as both research funders and re-
search users. Their involvement is strongest in the agriculture, natural resource
management and water CRCs.
State development agencies have taken an interest in CRC investment as part of their
State based science and innovation strategies. However, the role of State govern-
ments in the CRC process is extremely varied. Some State governments, such as
Queensland, Victoria and Western Australia have a highly structured process for
supporting CRC bids involving State institutions and provide funding for the prepara-
tion of the bid. Others have mechanisms for providing financial support in specific
areas of interest.
Most State governments support and assist consortia from their State in the prepara-
tion of CRC proposals. States advise that they are interested in fostering partners with
an interest in the application of research, not the research itself, and involving partners
who are actively involved in the project and with the capabilities to take up the
technology.

3.5 Conclusion
This summary of the views of the various stakeholders in the CRC Programme
reveals a range of different, though largely positive, perspectives. These perspectives
largely reflect the different experience of the effectiveness of particular CRCs. The
different types of universities and publicly funded research agencies have used the
CRC Programme in different ways appropriate to their capabilities, strategies and
objectives.
Similarly the experience is quite different in the different sectors of application. In the
traditional sectors of agriculture, mining and energy, where there is a long experience
of jointly funded research performed by publicly funded research agencies, the CRC

41
Submission, Australian Geoscience Council

39
Evaluation of the CRC Programme 2003

Programme has provided an important resource to supplement these collaborations

and provide a focus on adoption.
In the areas of the environment and natural resource management, the CRC Pro-
gramme has played a powerful role in building collaborative research teams on a
sufficient scale to make a considerable impact. In contrast, there has been only a
limited involvement of major manufacturing firms in the CRC Programme, and for
various reasons, some of them quite unconnected with the Programme, that involve-
ment appears to be declining. This is most notable in the case of the global downturn
of the ICT industry.
It is also worth mentioning that, while the great majority of submissions and contribu-
tions were positive, they provide little relatively hard evidence of outcomes and
achievements.
The comments in this Section of the Report are reflected in conclusions and recom-
mendations later in the document.

40
Evaluation of the CRC Programme 2003

4: Identifying and Defining CRC Outcomes

The purpose of this Section is to outline a framework for the collection of information
relating to CRC outcomes. A number of issues are canvassed concerning measure-
ment, followed by a discussion of definitions and concepts. It is argued that adoption
by CRC participants should be seen as the main outcome indicator of the CRC
Programme.

4.1 Issues
The CRC Programme is highly regulated and the reporting process is well established.
The Programme requires the tracking of inputs consumed by CRCs such as grant
income, research staff numbers and the amount of time spent on various projects etc.
Output tracking, however, is generally limited to such things as the number of papers,
PhDs and patents generated, being the tangible results of the research effort. There is
no existing procedure for tracking other outputs such as benefits to industry partners,
or more widely, the economic, environmental or social outcomes of the CRCs.
Although the contracts for 2002 round CRCs do ask for performance indicators to be
provided, in practice these often require further development.
The Management Data Questionnaire collects some information relating to market
based transactions – such as commercialisation agreements - but it does not report the
impact or results of those transactions in terms of the contribution to the business or
performance of the acquirer. Some CRC Annual Reports provide good information
relating to the results and impact of research from an end user perspective, but the
information is relatively inaccessible and inconsistent as to quality across all CRCs.
It is therefore difficult to assess the success of the Programme against its objectives
when the Programme does not comprehensively measure the very thing it is trying to
achieve.
The results of the Programme are closely related to the objectives of the participants
when they enter into the joint venture arrangement. It follows that the success of the
CRC, and the Programme as a whole, must be addressed from the perspective of the
participants – and particularly the end users of the research and education services
provided by a CRC.
The task of measuring the impact of publicly funded research, without taking into
account the way in which users choose to adopt and apply the research, is notoriously
difficult and complex - and there are no easy solutions. For this reason, the focus of
the Evaluation has been on obtaining and assessing user views in relation to CRC
research, education, commercialisation and collaboration outcomes. In this regard,
the main area of interest relates to adoption, application and use.

4.2 Definitions and concepts

The expected outcomes from the collaborative research, research training and educa-
tion activities of the CRC Programme can be identified at three levels:

41
Evaluation of the CRC Programme 2003

National economic, social and environmental benefits – often referred to as the

“public good” benefit, and which are general in their application and difficult, if
not impossible, to measure in an objective sense; they relate to the capacity for
wealth creation, the quality of life (for example, in terms of social well being
and health status), and the conservation, repair and replenishment of natural
capital.42
Collective industry benefit – represented as broad industry benefit, intended to
improve the performance, profitability and competitiveness of an industry
through improved practices and processes; this is particularly relevant to com-
modity oriented and other industries that compete on a global basis (mining, ag-
riculture, tourism, and some segments of manufacturing).
Private business benefit – reflected in business investment in new processes
and products that embody the results of research outputs, either by existing busi-
nesses (industry partners) or the creation of new businesses (start-ups); this
outcome is generally referred to as “commercialisation” and is particularly rele-
vant to biotechnology, medical, information and communication technologies.
The categories are not, of course, mutually exclusive. For example, many of the
successful outcomes of CRCs in the mining, agriculture and tourism sectors involve
the development of applications software for broad industry adoption. Biotechnology
has major applications in the agriculture sector. However, each category has differing
implications in relation to the generation, protection, licensing and sale of intellectual
property rights. In all cases, however, the critical issue as far as the CRC Programme
is concerned is the level of adoption, application and use of research results in a
general, industry or specific business sense.
The nature and extent of capacity-building is also important (critical mass, enhanced
workforce skills etc). However, in the long-run this capacity-building is only useful if
the enhanced capacities are actually exploited.
In submissions, discussions and consultations during the Evaluation there were a wide
variety of views expressed concerning the importance and significance of each
outcome. There is a very strong view that the CRC Programme is (or should be)
strongly focussed on commercialisation outcomes with the implication that business
take-up of research outcomes will result in the generation of national economic
benefits through wealth creation represented by increases in employment, profits,
sales and exports. There is also another view that the CRC Programme should
continue to include a focus on the generation of “public good” outcomes.
Whatever the category of outcome, adoption carries with it the necessity for clarity in
the path to adoption. The path to adoption necessarily involves an instrument for
implementation. These include:
An existing or new business/businesses (private or public enterprise) - commer-
cialisation.
An existing or new public programme – a public policy initiative or programme.

42
Natural capital refers to the stock of productive soil, fresh water, vegetation, clean air, ocean and other resources that underpin
the survival, health and prosperity of human communities.

42
Evaluation of the CRC Programme 2003

A strategy for changing attitudes and behaviours by businesses, governments

and citizens – a targeted communication strategy.
Ensuring that researchers have the skills, capabilities and experience to apply
new knowledge as an essential component of management practice in a business
organisation or government agency.
To achieve these outcomes it is necessary for research to be not only of a world class
standard, it also has to be relevant to a commercial and/or public policy context. The
R&D should enable businesses to address commercial opportunities or enable gov-
ernments to resolve public policy issues. This is a technology transfer problem –
research outcomes have to be presented in ways that are useful to the target end-users.

4.3 Adoption: the critical factor in CRC success

The focus of the CRC Programme is on adoption. This involves the application and
utilisation of research by “industry” either in new processes or new products – or new
ways of doing business. Industry can be defined narrowly to include only private
enterprise businesses, or can be taken to include public enterprise (for example, water
authorities and electricity utilities). In the contemporary context of the CRC Pro-
gramme, “industry” also includes government agencies with responsibility for the
planning, organisation and delivery of public programmes that impact on an industry
sector, or where that sector impacts on social, community and environmental out-
comes.
Professor Trevor Cole, Executive Director of The Warren Centre for Advanced
Engineering, observed in a note to the Evaluation Team that:
A reasonable expectation to place on CRCs is clear identification of the need and/or
opportunity being addressed by the CRC and a capacity to articulate both the oppor-
tunity and the practical pathway to its realisation.
That is, if CRCs are to contribute to commercialisation or utilisation, then the tech-
nology being produced must be relevant to commercial outcomes and there must be a
pathway through the much more expensive and risky process of implementation and
application.

A Report prepared by the Victorian Department of Industry, Innovation and Regional

Development concluded that:
The CRC Programme is failing to achieve its objectives in cases where CRCs de-
velop technologies that are not pursued beyond the laboratory. CRCs should focus
effort on pursuing projects that are actively supported by a partner or an external cli-
ent, who maintains ongoing involvement in the project. The research plan for these
projects should outline how the transfer of technology or the commercialisation of
the technology is to take place. The commercialisation plan should be embedded in
the research planning process at the outset, rather than developed as an afterthought
to the technology development efforts.43

Discussions and consultations during the Evaluation pointed to the difficult distinction
between “commercial” and “public good” CRCs. The basis of the distinction appears
to be that “commercial” CRCs produce products and services for a market, while

43
Submission, Department of Industry Innovation and Regional Development, Victoria. A requirement for Commercialisation
Plans was covered in the 2002 Selection Round

43
Evaluation of the CRC Programme 2003

“public good” CRCs produce knowledge that is universally available for application
and use. Such a distinction overlooks the possibility that “commercial” CRCs may
fail to produce commercially sustainable products while “public good” CRCs may
have a major impact on wealth generation through broad adoption of new practices
and processes within industry.
As indicated elsewhere in this Report, the role of so-called “public good” CRCs in the
Programme was a matter of considerable concern. There was, in particular a concern
that if the Programme had a greater “industry” focus and looked for the immediate
and obvious economic returns, mechanisms would be needed to address aspects of the
National Research Priorities in relation to environment, health, and a secure Australia
that may not find a ready industry partner. The University of Tasmania observed:
Tasks like the repair of major river systems, and overcoming salinity and acidity are
of crucial importance and clearly in the national interest. Harnessing the research ca-
pability of the nation via the CRC process to address these matters seems to me to be
sensible.

There is also a tendency to regard CRCs currently classified as “environment” as

being essentially “public benefit”. However, and as indicated in Section 3.3.8 public
enterprises in the water industry are major participants in CRCs and have a high
regard for the quality, applicability and utility of the research.
Public good CRCs can, and do, deliver substantial and direct national economic and
industry benefits. Many of the CRCs are clearly focussed on adoption through their
own communication programmes or through take up in public policy and pro-
grammes. However, without a commitment to the adoption, application and use of
research results proposals should not be supported by the CRC Programme – they
should be funded from other sources.

4.4 Defining pathways to adoption, application and use

It is important to bear in mind in relation to both public good, and commercially
oriented CRCs, that research outputs do not automatically flow into application and
use. Publication of research papers and reports, filing patents and building prototypes
will not necessarily result in adoption. Whatever the intentions and aspirations of
scientists and researchers, adoption will not occur unless there is an end user need or
want that is available to be satisfied. This applies to all categories of CRC. Interest-
ingly, of course, adoption may occur in situations and circumstances that are least
expected or quite unplanned.
One dilemma for Expert Panels is that it is often easier to assess adoption and path to
use for a commercially oriented CRC proposal than for a public benefit proposal.
That is, commercial criteria relating to production and marketability are easier to
grasp and assess than the economic, social or environmental impact of a discovery or
invention. Financial projections of benefits may be impressive - but are totally
unrealisable unless there is a vehicle for implementation. In a commercial context,

44
Evaluation of the CRC Programme 2003

this may be a new or existing company; in a public good context, this might be a new
public programme – but these outcomes are much harder to establish up front.44
There is generally a need for an intermediary to interpret research results into a form
that can be understood and used by businesses in a commercial setting or by pro-
gramme managers in a public policy setting. The “gap” between the community of
science and the commercial and policy settings are well known and the arguments
well rehearsed. It is not a matter of simply exhorting scientists and researchers to be
more entrepreneurial or commercial, or for business people and policy makers to be
more attuned to using research.
The “transfer” of research outputs to application in a commercial or public policy
setting occurs along a number of “pathways”. Navigation of these pathways invaria-
bly involves the intermediation of a range of brokers, advisers and communicators.
These agents may rely on market signals or opportunities or they may “manage” the
relationship between the providers and the users of research. As a Cooperative
Research Centre is a special form of managed relationship it follows that an important
aspect of its success relies on the effectiveness of its management leadership.
In some instances a CRC may have to substitute market relationships for managed
relationships. This is likely to occur where the CRC does not include a research user
who is interested in, or capable of adopting, research outcomes. In such cases,
research outcomes are marketed through a technology license or spin-out company.
These business development CRCs tend to occur in those industries where businesses
acquire their technologies through acquisition of technology-based start-up compa-
nies. Venture capital investors perform a critical role in this area: their task is to
create new businesses and to help them to grow.
The greater the level of technical risk in the scientific discovery or technological
invention, the higher the market risk in terms of attractiveness to potential end users,
and the greater the need for intermediation to manage the risks involved. Venture
capital investors perform this role in business. Increasingly, large businesses are
acquiring and accessing research and development outcomes through acquisition of
technology via taking stakes in or buying start-up companies rather than investing
directly in industrial research projects. The trend is particularly apparent in informa-
tion and communications technologies, and in pharmaceuticals.

4.5 Pathways to adoption: a framework

It is possible to identify a number of pathways from invention and discovery in the
research environment to application and utilisation in a customer/client service
environment. A framework for considering paths to application and use is illustrated
below. The paths identified are not mutually exclusive. They are, however, relevant
to the CRC environment.

44
In discussions about the involvement of social sciences and the humanities in CRCs the contribution of policy analysts in
designing and advocating public programmes should not be overlooked.

45
Evaluation of the CRC Programme 2003

Paths to Use: Between the Ladder of Science and the Product Development Cycle

The “Ladder of
Path to Adoption Intermediary Adoption Strategy Application End Users
Science”

Teaching University Graduate/Post Graduate Recruitment Opportunities

Post Graduate Research in Industry Established and
Industry Teaching and Research Supervision Organisation Possibilities
Knowledge
Application Product/
Changing market
Communication,
Technology Broker
Communication, Programme
Awareness Diffusion Strategies
Development conditions

Knowledge Technology Acquisition Process

Technology Licensing Technology Marketer
Strategies
Diffusion Improvement New Markets

Strategic Alliance, JV,

Industry Partner
Research and Technology Client Service
Partnership Development Agreements
Demographics
Knowledge Alliances Spinouts
Development
Technology Based Start Private Equity; Corporate
Up Company
Seed Investor Venturing New Consumer
Organisation
perceptions
Knowledge
New “Business Moods
Creation University Owned Public Listing
Business Joint Business Venture Private Equity raising Model”
(Discovery)
New Product/ Social/
Programme Environmental
Academic Entrepreneurs
Staff and Researchers leave to start new business Technology pressures
Research (Businesses run within or parallel to university) R&D
14
© John H Howard, 2002

Whilst the pathways tend to have a commercial orientation, they are also relevant to
the translation of applications into adoption in a public policy or public programme
environment. The pathways relevant to the CRC environment are addressed below.

4.5.1 Research training and education

The most common form of application of research outputs is the training and subse-
quent employment of university graduates in industry. The CRC Programme has a
major role in research training with the objective of preparing people for the applica-
tion of research in a business or public policy environment. This pathway is particu-
larly apparent in commercial and public organisations that have large research facili-
ties and there is a career path in industrial research. In technology intensive compa-
nies, experienced researchers also move from research to product development,
marketing and general management roles.
The main issue from a CRC perspective is that researchers-in-training may be pre-
cluded, or constrained in publishing or disseminating the results of their research in an
academic environment.
The Group of Eight Universities submitted that:
. . . in the main, the research training outcomes have been excellent. Research stu-
dents are given the opportunity to work on focused projects, to engage with business
and industry and to receive scholarships and other financial rewards. Students do en-
counter some difficulties when their publishing and public presentation activities are

46
Evaluation of the CRC Programme 2003

restricted because of commercial-in-confidence considerations and this concern

needs to be resolved.45

IP created by the student in a university setting generally belongs to the student. The
situation can be different in a CRC setting where participants may claim ownership of
IP created.

4.5.2 Communication: changing attitudes and behaviours

Communication is sometimes referred to as “technology diffusion”. In a research
environment the essential task is to encourage people and organisations to adopt the
research in a way that improves business performance or achieves desired economic,
social and environmental outcomes.
The CRC Programme generates a vast amount of information contained in Annual
Reports, Brochures, Booklets, Success Stories and Press Releases. While “communi-
cation campaigns” targeted at end users to create awareness as a basis for change have
an important place for CRCs, it is not enough to simply publish or report research
results in the expectation that users will locate and use them. Publication is not the
same as communication.
The problem in the adoption of research outcomes may not be a problem of informa-
tion availability, but a problem of getting the attention of the people and organisations
who are in a position to make decisions that affect economic, social and environ-
mental outcomes.

4.5.3 Application: take up in industry practice and public programmes

The processes and procedures through which research from CRCs translates into
industrial processes and public programmes and policies are variable. Generally, it
requires close collaboration between research provider and research user. CRCs that
operate as “industrial research consortia”, undertaking research on a pre-competitive
collective basis tend to adopt a project-based focus on research with adoption and
application strongly in mind. Projects may form part of a longer-term research
agenda.
Several CRCs have appointed technology marketers to translate the results of research
into a form that is understood by decision makers in both business and government.
Much of this work involves one-on-one communication – explaining the way in
which research results can be adopted and applied from the perspective of the user.
This involves developing an understanding of the target end user’s operating envi-
ronment and how the research results may contribute to achieving overall business or
policy goals. The water industry CRCs have made a strong commitment in this area.
In the case of agriculture CRCs, research outcomes are applied by State Agriculture
Departments in programmes directed towards improving productivity, returns and
competitiveness. However, in natural resource management, the processes are often
more complex. Translating research findings into public programmes and actions
may require a very high degree of advocacy. Increasingly, however, actions and

45
Submission, Group of Eight

47
Evaluation of the CRC Programme 2003

agendas in natural resource management require a sound science base. The basis for
action in restoration and repair of wetlands provides a contemporary example.
The Outcomes Survey, undertaken as part of the Evaluation, specifically asked
questions relating to impact in terms of adoption and use of research results in new or
changed public programmes. The results of the Survey are reported in Sections 5-9
of the Report

4.5.4 Commercialisation: new processes, new products and new businesses

In the area of emerging technologies, particularly in information and communications
technologies and biotechnology, the path to adoption is often through “commerciali-
sation”. Commercialisation involves the creation of new and improved products or
processes and/or new business models. It involves one or more of the following
strategies:
Technology Licensing to existing or new businesses.
Entering into strategic alliances, joint ventures, partnerships.
Creating new technology based start up companies.
The skills required to implement and deliver commercialisation outcomes from public
science and technology are complex and scarce. Moreover, there are many who claim
to have skills in this area but delivery fails to match up to promise and expectations.
Commercialisation is not only about securing intellectual property rights and creating
governance structures for a start-up enterprise: it is about creating viable and sustain-
able businesses. This issue is raised again in Part II.

4.6 Evidence of adoption of CRC outcomes

The Evaluation Team endeavoured to identify and report CRC outcomes in a system-
atic way. This was approached by reviewing CRC Reports, Periodic Reviews and
other documentation in order to identify the actual outcomes of the investments in
these organisations in terms of relevance for industrial application and actual utilisa-
tion.
Regrettably, the most common practice still is to report potential benefits rather than
demonstrate actual benefits. The Evaluation Team had a concern that there may be a
gap between what many CRCs report they have achieved, or could achieve, and what
they have actually achieved in terms of take up by end users.
Publicity about potential use and application is of interest and makes good news
stories, but for the purposes of evaluation evidence is required about implementation
and take up. It is difficult in the existing CRC promotional material to differentiate
between what has been adopted and what has the potential to be adopted. There is far
too much emphasis on “good news” as opposed to “good content”.
The CRCs referred to in Figure 3 have clearly demonstrated that research outputs
have been applied and have made, and will continue to make, major impacts. It is also
important to know what were the factors underlying and driving the successful

48
Evaluation of the CRC Programme 2003

outcomes.46 Moreover, since implementation generally involves a commitment to

continual and ongoing innovation for sustained success, it is important to know how
this is being done. This information should be more readily available.
Figure 3: Sample of CRC Achievements
CRC Achievements
AJ Parker CRC for Developing a thiosulfate process for gold extraction - Thiosulfate is seen as an environmentally friendly
Hydrometallurgy: alternative to cyanide. As part of its work towards producing a viable thiosulfate process for gold
extraction, the AJ Parker CRC for Hydrometallurgy has developed a recovery method which uses resins
to recover gold from solution after the gold is leached with thiosulfate. The gold attaches to the resin
surface. A simple method for selectively retrieving gold from the resins has also been developed.
Australian Cotton A combination of ecological and economic research by the CRC with grower groups has documented the
CRC: economic value of Integrated Pest Management (IPM) approaches to pest management.
The CRC has also identified two new, potentially more attractive blends of plant volatile chemicals as
potential attractants for Helicoverpa, the main insect pest of cotton. A provisional patent application
covering formulation of the most attractive blends has been lodged with the Australian Patent Office.
Australian An ATCRC patent is pending for increasing mobile phone tower capacity. The invention has the
Telecommunica- potential to alter the landscape of Australian cities. It could result in a 41% increase in mobile phone
tions CRC: tower (basestation) capacity in a power limited environment, thus allowing more users per basestation.
CRC for Aboriginal The CRC is assessing the effect of pneumococcal vaccine Prevenar® on rates of pneumococcal diseases
& Tropical Health: in Northern Territory children. Central Australian children suffer the highest reported incidence of
invasive pneumococcal disease in the world. Pneumococcal disease is caused by Streptococcus
pneumoniae bacteria and infections with this bacterium can cause serious meningitis, pneumonia,
septicemia and middle ear infections.
CRC for Advanced The CRC has developed a new process, "pullforming”, for making parts for aeroplanes - a simple, low-
Composite cost, automated procedure for pulling and forming composite materials into shape through a die. In one
Structures application alone, it has reduced labour by 30% with a potential saving of $500,000 over 5 years and also
made the customer providing the product for Boeing much more competitive through easily meeting a
target for a reduction in costs of 20%.
The CRC with its participant, Boeing-Hawker de Havilland, devised a new approach to the lamination of
a selected number of aeroplane parts which were particularly expensive to produce. The time-saving
achieved by the new process allows as many as five to ten parts to be made by the same amount of labour
as would be required for just one part, using lamination by hand. Potential savings on one current
assembly are around $100,000 per year.
CRC for Cast CAST has developed and patented new technology for an environmentally friendly melt protection
Metals Manufactur- system to prevent molten magnesium from burning in air. The promising new melt protection system
ing (CAST). uses the hydrofluorocarbon gas HFC-134a, replacing the potent greenhouse gas sulphur hexafluoride
(SF6), which is the currently used industry standard. The new technology has the potential to eliminate
green house gas emissions by the world's magnesium industry equivalent to over 5 million tonnes of
carbon dioxide per annum.
CRC for Cattle & Researchers working in the CRC have recently discovered the world's first gene marker for beef
Beef Quality tenderness. This complements the world's first and only other gene marker test for a production trait, the
TG5 marbling gene.
A provisional patent has been lodged, and Genetic Solutions Pty Ltd (Commercial Partner of the CRC
for Cattle and Beef Quality) expects to market the gene marker test to Australian beef breeders within 6
months.
CRC for Cochlear Collaborative research with one of the CRC's core participants, Cochlear Limited, has led to the
Implant & Hearing development of the Australian and US award-winning Contour electrode array as well as to the new
Aid Innovation: ESPrit ear-level speech processor. These devices greatly improve the benefits to adults and children with
hearing loss.
The NAL-NL1 fitting software, developed by the CRC and Australian Hearing, has been licensed by
most hearing aid and audiology test equipment companies for their products. NAL-NL1 allows non-
linear hearing aids to be adjusted for maximum performance and increased speech intelligibly. The major
international advance ensures optimum fitting to improve speech recognition for hearing-impaired
people.
CRC for Eye The CRC, in collaboration with CIBA Vision, has developed a breakthrough soft contact lens that can be
Research & worn continuously night and day for up to 30 days, and which sets a new industry standard for oxygen
Technology: permeability.
The Focus Night & Day® lens has now been launched internationally. The lens is expected to earn a
multi-million dollar income, with predictions that the new generation of extended wear lenses will
capture at least half of the current contact lens market. It is also expected that the convenience of this

46
This material is summarised from CRC Association reports and profiles.

49
Evaluation of the CRC Programme 2003

CRC Achievements
lens will entice spectacle wearers to contact lenses, triggering further growth in the market.
CRC researchers have found that tears may indicate if people have certain types of cancer. In a world-
first discovery, researchers at CRCERT and the Proteome Analysis Facility at Macquarie University,
have found tears of patients with certain forms of cancer contain a marker protein.
CRC for Interna- The CRC developed fourteen industry-ready technologies, four of which have already been adopted by
tional Food industry. Four spin-off companies have been established and two global licenses are pending in
Manufacturing & breathable films and the grape packaging system. The CRC also holds 7 patents/applications in Australia
Packaging Science: and 40 overseas. The return on total investment in this CRC is expected within 10 years from innovations
already delivered to its industry partners.
CRC for Mining Three software programmes developed by the CRC for Mining Technology and Equipment (CMTE) are
Technology & enabling mines to make use of powerful geosensing techniques. By providing a cheap and easy way to
Equipment process and interpret data, SeisWin, LogTrans and ImageWin are removing impediments to the use of
(CMTE): tools that provide much greater geological certainty.
CRC for Molecular The CRC has developed germplasm that captures new molecular techniques in a product that can be used
Plant Breeding: directly by breeders. An example in the cereals area is the development of highly transformable lines of
wheat named 'MPB Bobwhite'. These lines grown under appropriate conditions can give transformation
efficiencies of up to 60%.
CRC for Sensor, Over-the-horizon-radar: Sponsored by Telstra Applied Technologies, and in collaboration with DSTO,
Signal & CSSIP has developed the receive and processing subsystems of a HF surface wave radar. This has been
Information built and deployed in two locations in Northern Australia for experimental evaluation.
Processing (CSSIP): The system performed exceptionally well in these trials and was able to detect targets out to several
hundred kilometres. Further work to produce an operational system based on this work is being initiated.
CRC for Tissue A new South Australian biotechnology company has been established which builds on the successes of
Growth & Repair: the CRC for Tissue Growth and Repair to achieve self-sufficiency. TGR BioSciences Pty Ltd is a unique
strategic research and development enterprise with a proven track record in identifying discoveries,
capturing intellectual property and creating commercial value in bioscience.
The focus of TGR Biosciences is on novel bioactives for treatment of gut, topical wound, bone and
tendon disorders. The applications of this research include the pharmaceutical, nutriceutical and dairy
industries. There is a major emphasis on topical applications for gut disorders and wounds, as well as
growth factors targeted for local action in bone and tendon repair.
The company is establishing a platform discovery programme based on high-throughput screening assays
and proteomics to identify novel bioactive factors, with particular input from the expertise of one of its
shareholders, the Australian Proteome Analysis Facility at Macquarie University.
CRC for Waste Scientists have used advanced microscopy techniques to study the surface characteristics of the
Management & pathogen, Cryptosporidium, the organism that triggered the 1998 Sydney water incident.
Pollution Control The knowledge they have gained will assist researchers understand why Cryptosporidium can pass
Limited through sand filters and help improve water treatment.
The CRC has announced an agreement to sell its subsidiary, Waste Technologies of Australia to Zeolite
Limited in a three-stage $20 million deal.
CRC for Water Developed computer models that describe the build up of biofilms, coliform growth and chlorine decay
Quality & within the water distribution system. These models will help water suppliers design chlorination
Treatment: disinfection systems that remain effective throughout the distribution system, while keeping chlorine
dose rates as low as possible.
Quality Wheat CRC A protocol showing how to blend grists and flours for specific quality was developed (in a contract from
Ltd: the Grains Research and Development Corporation) so that outcomes could be predicted with greater
certainty.

The achievements identified above are substantial and convey a very positive result of
the CRC Programme. However, the information is incomplete and the material that
is publicly available does not always indicate how success was secured and the extent
of commitment and the nature of the skills applied from implementation.
It would be useful to have more consistent information about how the outputs of
CRCs have been subsequently used and applied by industry, government and the
community. This point applies to situations in which a CRC has closed down and/or
the knowledge has been exploited by a third party. Comprehensively tracing these
wider subsequent impacts is a potential role for the CRC Association.

50
Evaluation of the CRC Programme 2003

Recommendation
I - 2. CRCs, through the CRC Association, prepare a series of detailed case
studies, across all CRCs, describing paths to adoption, application
and use of research. The case studies should identify the factors that
lay behind and drove the successful outcome and how this was done.
These concerns were the basis of designing the performance information framework
and undertaking a survey of CRC Managers and business participants in CRCs in
order to identify the level of adoption, application and use of CRC outputs. This
framework is discussed below.

4.7 Performance indicators and performance information framework

From a policy and management perspective there are a number of desirable character-
istics of a performance monitoring and reporting system. They include.
Being specifically geared to the setting and monitoring of policy and programme objectives and
performance targets.
Being able to provide information on both resource usage (inputs) and on outputs and outcomes,
measured against historical trends (and future targets), by programme and programme element,
region, research field, etc.
- Reporting against trend and actual performance against planned (expected)
performance, in sufficient detail to give an overall picture of the performance of
the Programme.
- Flagging the need for management and/or policy intervention in particular areas
where trends move outside specific “tolerance” limits.
Being able to produce timely reports, in readily comprehensible formats – and should be
sufficiently flexible to allow non-specialists to interrogate the system.
Being able to answer “what if” questions about broad demand for Programme services, or about
the implications for outputs/outcomes based on alternative futures.
Being focussed on regular presentation of a small number of key indicators, which portray the
Programme’s overall performance against short term budget and/or standards oriented targets
and against long term strategic plans.
Being cost effective: it should not be developed beyond the stage where the costs of further data
collection, maintenance and reporting, exceed the benefits resulting from the additional effort.

These characteristics are often lost sight of when attention turns to what is technically
possible and feasible as distinct from what is desirable from a policy, management
and operational perspective.
The previous Department responsible for the CRC Programme, the Department of
Industry, Tourism and Resources, invested considerable resources in the present
Management Data System – a performance information system. That system can
provide a substantial amount of performance information relating to programme
resource usage (inputs) and programme outputs. This information can be presented in
terms of both trend and actual performance. It does not, however, easily provide
outcome information. It is our understanding that the Department of Education,
Science and Training intends to revise the Management Data System.
Outcome information typically comes from outside the Programme administration
framework and requires separate collection procedures and analysis. Some informa-
tion relating to outcomes is included in the 2nd and 5th Year Review Reports and in the
Annual Reports. This information is structured around assessments of the extent to

51
Evaluation of the CRC Programme 2003

which Centres are achieving results in relation to the Centre selection criteria. The
information is not, however, presented in a way that facilitates compilation and
analysis.
A number of government programme evaluations currently underway are attempting
to define net economic benefit outcomes (R&D Tax Concession, R&D Start, Biotech-
nology Innovation Fund). The CRC Programme should also provide indications on
return to government funds where this can be realistically calculated. However, this
information can only be prepared by the individual CRCs that have the knowledge of
the research and how it might be adopted. Assigning this responsibility is difficult if
CRCs have been wound up.
The task of defining net economic benefit necessarily involves tracking the adoption
of research through to application and use. This can be done in those situations where
research is adopted by an existing or new business and products and services are sold
in a market environment. It can also be done in situations in which public sector
departments or agencies adopt or use CRC-developed knowledge. But the interpreta-
tion and meaning of future net economic benefit for long-term research is at best
speculative where reliance has to be placed on “potential” application and use and
there is no clear responsibility for implementation and take-up.
Nonetheless, CRCs should be encouraged to undertake such economic analyses where
useful and meaningful results can be derived.
Estimates of “potential application, if research is adopted” have been found in many
studies to be vague and unreliable. Researchers are fond of claiming “immense”
economic benefits as a result of their discoveries. However, the path to application
and use, resulting in realisable economic returns involves numerous business deci-
sions that are virtually impossible to predict, let alone estimate. Without a clearly
articulated investment strategy it is difficult to discern whether outcomes have oc-
curred as a result of the intervention or as a result of other events.
Thus, mapping out the potential paths, key decision points, complementary invest-
ments, expected take-up, together with the costs and risks involved should be central
to a CRC application – in the form of an “investment” proposal. When costs and risks
are estimated with rigour and reality, the realisable “net present value” of the invest-
ment tends to be lower, but more plausible. Research attractiveness should not be
confused with investment feasibility. The requirement for CRC applications to be
submitted as “investment” proposals is a key recommendation of this Evaluation.
Data are presented later in the Report in relation to financial returns relating to
progress in achieving commercial outcomes from CRC activity. Examples of com-
mercial outcomes include technology transfer consultancy services,47 licence revenue,
the creation of start-up companies and the sale of commercial offshoots. But this
only represents a partial picture, and “counting start-ups” represents only a partial
representation of the path to adoption, application and use.

47
For example services in the improvement to firms manufacturing process are cited in the Annual Report of the CRC for Cast
Metal Manufacturing.

52
Evaluation of the CRC Programme 2003

Nonetheless, the start-up route to research adoption is an important aspect of contem-

porary industrial innovation, particularly in technology intensive industries. Start-up
companies, as “New Technology Based Firms” (NTBFs) are important in the technol-
ogy acquisition strategies of larger corporations – either as direct acquisition or
through strategic alliance arrangement – particularly in the setting of a “knowledge
cluster”.

4.8 Approach adopted in the evaluation

The challenge for the Evaluation was to identify the set of performance indicators
that meets the needs of policy advisers and programme managers that portray the
Programme’s overall performance in relation to its objectives.
A framework for performance monitoring and reporting for the CRC Programme was
prepared during the Evaluation and is included in the project Working Papers. The
framework has been developed on the basis of the information that already exists in
the current MDQ System and other readily available data sources and information.
Outcome information can only realistically be obtained directly from the research
users and research providers.
For the purposes of the Evaluation, comprehensive outcome information relating to
the impact of the Programme in the areas of research, education, adop-
tion/commercialisation and collaboration was obtained through a structured survey of
CRC research user participants, CRC managers and businesses that have not partici-
pated in CRCs. The methodology for this Outcomes Survey is described in Attach-
ment 2. The performance information is reported in Sections 5-8 that follow.
While the Outcomes Survey task was undertaken as a “one off” project in this Evalua-
tion, it should be undertaken as a regular study to inform policy advisers and decision
makers about the impact of the Programme and where adjustment might be required.
Recommendation
I - 3. The performance information framework, and the related Outcomes
Survey, developed during the Evaluation be adapted to reflect the
proposed revised Programme objectives and used on a continuing
basis for the identification of, and reporting on, CRC outputs and
outcomes.

53
Evaluation of the CRC Programme 2003

5: Research Outputs and Outcomes

This Section of the Report addresses what we have termed the CRC “Research”
objective – that is:
To enhance the contribution of long term scientific and technological research and
innovation to Australia’s sustainable economic and social development

The objective, as stated, clearly relates to the utilisation of research by pointing to the
contribution to sustainable economic and social development.
The Terms of Reference that relate to this objective required consideration of the
extent to which the CRC Programme was:
Contributing to Australia’s economic growth, social well-being and environmental outcomes.
Developing Australia’s public and private research capacity in the areas of national need or
global opportunity.
Producing research of an excellent standard that would not have been undertaken otherwise.

The performance indicators that were identified in the Performance Monitoring

Framework for the Evaluation are as follows.

Output Indicators Outcome Indicators

Path to Adoption
Indicator Source Indicator Source
Extent to which research outcomes have
Creation of knowledge impacted on industry and/or public
that can be applied in: Research programme delivery through:
new and existing publications in . Accelerated or improved existing research Survey of
CRC projects
businesses; the formula- refereed /peer businesses/
Annual
tion of public policy; reviewed . Stimulated new research projects industry/
Reports
programme implementa- international . Contributed to the development of IP government
tion/delivery. journals or MDQ
. The introduction of new and/or improved organisations
monographs. Data
Furthers objectives of products, production processes, supply chain involved in
Base
equity, social justice and practice and public programmes CRCs
environmental sustainabil- Patent registrations . Improved business and/or industry
ity. profitability and public programme
performance
Survey of
Creation of knowledge Projects that are businesses/
that is aligned with consistent with and CRC Research user satisfaction with: industry/
national research priorities contribute to Annual . Technical quality of the research government
and areas where Australia knowledge in Reports . Innovative quality of the research organisations
has competitive advantage priority areas involved in
CRCs
Extent to which CRC has created
Achieving “critical mass” opportunities for researchers to: Survey of
CRC
and “seamless” (cross- Jointly authored . Obtain greater access to facilities and CRC CEOs
Annual
institutional) approaches publications equipment and
Reports
to research management. . Build trust and confidence researchers
. Obtain promotion, recognition

Findings in relation to the outputs and outcomes in these areas follow. In a number of
output categories, the information was either not available or inadequately reported in
many CRC Annual Reports with the result that it is not possible to provide informa-
tion that can be relied upon to indicate performance of the CRC Programme in
aggregate.

54
Evaluation of the CRC Programme 2003

5.1 Resources allocated

Data collected by the Department of Education, Science and Training indicate that,
overall, CRCs have allocated $1,224.5m or 73 percent of their resources to research in
the period 1998-99 – 2001-02. Seventeen CRCs allocate over 80 percent of resources
to research activity and six CRCs allocate over 85 percent.
While research provides the basis on which CRCs are established, there is also an
objective to transfer research results into application. A commitment of 80 percent
means that there are only 20 percent of resources available for technology transfer and
communication.

5.2 Creation of new applicable knowledge

In terms of the discussion in previous Sections of the Report, the contribution of
research to social well-being and environmental outcomes will be through the produc-
tion of applicable knowledge.

5.2.1 Output data

The Management Data Questionnaire collects information in relation to a number of
research activities and outputs. Over the life of the Programme, the MDQ reports that
a total of 15,839 papers prepared by CRC researchers have been accepted for publica-
tion. The overall trend in papers accepted for publication from CRC researchers over
the years 1991-92 to 1999-2000 is illustrated below.
CRC Programme: Papers Accepted for Publication 1991-92 - 1999-2000

800

700

600

500
Number

400

300

200

100

0
1991/1992 1992/1993 1993/1994 1994/1995 1995/1996 1996/1997 1997/1998 1998/1999 1999/2000
Year

Agriculture and Rural Based Manufacturing Environment Information and Communication Technology
Manufacturing Technology Medical Science and Technology Mining and Energy

The data indicate an overall fall off in publication activity since 1997-98. The data
also indicate a much higher level of publication activity in the environment and
agriculture CRCs. While this may reflect a stronger academic research orientation, it
also reflects the strong science orientation in addressing problems and canvassing
solutions in relation to the preservation, repair and restoration of natural capital
resources and in agricultural and farming practices.
More detailed CRC production information, collected over the last two years, is
contained in Table 13.

55
Evaluation of the CRC Programme 2003

Table 13: CRC Programme Outputs – Research – 2000-01 - 2001-02 (Total)

Total
Number of book chapters published 602
Total number of books published 222
Number of full written conference papers published in refereed proceedings 3,082
Total number of papers/journal articles published 3,511
Total number of research projects carried out by Centres during the reporting period 3,638

The information in Table 13 points to a significant volume of activity and output.

These indicators would be useful in assessing the performance of individual research-
ers, and the relative performance of individual CRCs, but as a CRC Programme
indicator they merely state that a large amount of material has been produced. The
time frame to assess or comment on trends in the above categories of publication is
too short.
A complication in interpreting the data in Table 13 is that it is not known whether
some of the output identified above (books, papers, etc) has been produced while a
researcher has been working in a CRC or produced as part of other aca-
demic/industrial research activities.
A more specific indicator of generation of applicable knowledge is reflected in patents
generated. Information relating to patenting activity over the years 1996-97 to 2001-
02 is provided in Table 14. The data are reported as submitted by CRCs to the
Department of Education, Science and Training. It is emphasised that patents are an
indicator of research output – not adoption or research commercialisation.
Table 14: Number of patents and applications maintained in Australia
1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002
Mining and Energy 14 15 10 18 10 11
Manufacturing Technology 47 71 32 30 32 32
Information and Communication Technology 18 53 41 8 58 104
Agriculture and Rural Based Manufacturing 31 26 15 24 19 14
Environment 9 4 9 18 16 18
Medical Science and Technology 53 72 88 59 68 82
Number of patents and patent applications maintained in Australia 172 102 112 100 102 114

Table 14 indicates that the CRCs with the highest level of patenting activity are in the
ICT sector (predominantly the Photonics CRC) and in the Medical Science and
Technology category. The CRC for Waste Management and Pollution Control has
also a significant number of patents in the Environment sector.
International patenting is an indication of relevance and significance of a CRC.
Information on patents and patent applications made overseas is listed in Table 15.
Table 15: Number of patents and patent applications made overseas
2000/2001 2001/2002
Mining and Energy 18 61
Manufacturing Technology 70 24
Information and Communication Technology 46 209
Agriculture and Rural Based Manufacturing 16 19
Environment 76 87
Medical Science and Technology 108 149
334 549

The data in Table 15 indicates a preference for CRCs to undertake patenting overseas.
It also points to the extensive patent portfolio of the Photonics CRC, the CMTE, the
CRC for Waste Management and Pollution Control and the medical/life sciences
CRCs.

56
Evaluation of the CRC Programme 2003

5.2.2 Outcome data

The Outcomes Survey sought to identify the success of the CRC Programme in terms
of the extent to which research had impacted business development and growth.
From the research user perspective, the highest impact has been in relation to “accel-
erating or improving existing research projects”. The impact was lowest in relation to
contributing to the development of intellectual property and improving business or
industry profitability. The results are presented in Table 16.
Table 16: Performance indicators: Research user views of research impact
As a CRC Participant, to what extent so you think Very High Moderate Low Very Low Not Sure Total
the research of CRCs has impacted on High % % % % % %
%
Accelerating or improving existing research projects 12 36 24 12 8 8 100
Stimulating new research projects 8 40 28 16 8 0 100
Contributing to the development of IP 4 20 32 28 8 8 100
Introduction of new/improved products, processes 4 40 16 20 16 4 100
Improving business/industry profitability 12 16 24 28 8 12 100

Given the focus of the CRC Programme on long-term research, business perceptions
of impact on research is a good outcome. Research users also indicated that the
impact had been high in terms of introducing new products and processes, but of
much less impact in contributing to profitability. This follows from earlier discussion
about the motivation of users to participate in CRCs.
CRC Managers were asked a similar question, but they were asked to think about both
the actual and potential impact. In this regard, their perceptions are highly optimistic,
reflecting the interest in research outcome potential as discussed earlier. Eighty
percent of CRC Managers believed that there is a high to very high prospect of
research leading to the introduction of new and/or improved products. This is re-
flected in Table 17.
Table 17: Performance indicators: CRC Manager views of research impact
To what extent do you think the research of your Very High Moderate Low Very Low Not Sure/ Total
CRCs has had or will have impact: High % % % % NA %
% %
Accelerating or improving existing research projects 32 42 16 4 - 6 100
Stimulating new research projects in industry 32 46 12 6 - 4 100
Contributing to the development of IP 26 36 26 6 - 6 100
Introduction of new/improved products, processes 28 52 10 2 - 8 100
Improving business/industry profitability 16 38 26 10 - 10 100
Improving public programme/policy performance 26 14 26 10 2 22 100

The higher rating of CRC Managers would also reflect the longer-term perspectives
and time horizons in relation to research activity and outcomes.

5.3 Creation of knowledge that is aligned with national research priori-

ties and areas where Australia has competitive advantage
Under current arrangements, there is no specific requirement for CRCs to commit to
projects that reflect the recently announced National Research Priorities. However,
an analysis undertaken in the Department of Education, Science and Training indi-
cates that all CRCs fall within the National Research Priority categories. It is planned
to require CRC application and selection to have regard to Priorities in the next round.
From a global perspective, Australia has a competitive advantage in what are com-
monly regarded as the commodity industries of agriculture, mining and energy. These

57
Evaluation of the CRC Programme 2003

industries are well represented in the current CRC portfolio. In these industries
businesses are seeking to differentiate by developing a “product” focus and to build
and retain market share by reducing costs, increasing productivity through application
of technology and aggressively targeting customer needs through quality and service.
The Beef CRC has been particularly successful in this area with its “tender gene”.
In a number of other industries, particularly manufacturing, Australia has the oppor-
tunity to become globally competitive in small, specialised, niche markets.48 For
example, Australia performs well in the areas of manufacture of mining equipment,
and medical devices – including hearing technologies and contact lens research and
application. All of these areas are associated with CRCs.
There is also a relationship between CRCs and industry Action Agendas in terms of
CRCs being involved in implementation of specific initiatives. The Department of
Education, Science and Training seeks information from other government agencies
in relation to Action Agendas as part of the selection process.
The recently released Report Enabling Our Future: A Framework for the Information
and Communications Technology Industry recommended that NICTA, CSIRO and
DSTO should coordinate the establishment of major publicly funded research groups,
including IT related CRCs and appropriate larger groups to:
Develop an implementation plan setting out actions to respond to recommenda-
tions in the report.
Work together to more fully integrate and embed private sector R&D facilities
into the Australian ICT R&D community.49
As a way of assessing CRC research in terms of its relevance to industry and business
needs, CRC research user participants in CRCs were asked in the Outcomes Survey
about their level of satisfaction with CRC research in relation to research scope, focus
and quality. These may be taken as indicators of research relevance. The responses
are contained in Table 18.
Table 18: Performance Indicators: Research user satisfaction with research scope, quality and
relevance
As a CRC Participant, how satisfied are Very Satisfied Neither Dissatisfied Not sure Total
you with the following in relation to your satisfied % Satisfied or % % %
CRC % Dissatisfied
%
The scope of projects covered 16 56 4 24 0 100
The focus of projects covered 24 40 12 28 0 100
The technical quality of the research 28 52 16 4 0 100
Innovation quality of the research 24 52 12 8 4 100
Relevance of the research to your needs 16 40 20 20 4 100
Relevance to Australia’s long term needs 16 52 28 4 0 100

In general, research users are satisfied, or highly satisfied in relation to indicators of

research relevance. There are, however, indications that some research users are not
satisfied with the relevance of the research, particularly in relation to scope and focus.

48
See Howard Partners and ACIIC, Securing Our Manufacturing Future: Small Business Manufacturing to 2015 and Beyond
(Sydney: Small Business Development Corporation, 2001)
49
Australia. Framework for the Future Steering Committee, Enabling Our Future: A Framework for the Information and
Communications Technology Industry

58
Evaluation of the CRC Programme 2003

There is, at the same time, a very high level of satisfaction with research quality and
the relevance to Australia’s long-term needs.

5.4 Achieving “critical mass” and “seamless” (cross-institutional) ap-

proaches to research management
Comments in discussions and consultations during the Evaluation, and in submis-
sions, indicated that both research providers and research users were satisfied with the
way in which the CRC Programme had built critical mass. Critical mass is indicated
by enhanced access to research facilities and equipment, increased trust among
researchers, opportunities for career advancement and capacity to undertake long-term
research.
Achievements in this area are substantially impacted by the way in which a CRC is
managed, and in particular the working of the Board and the skills, knowledge and
experience of the CEO.
Information from the Outcomes Survey relating to research user satisfaction with the
“critical mass” indicators is contained in Table 19. The strongest indicators are in the
areas of access to facilities and equipment within the CRC framework. Significantly,
over 70 percent of research users are satisfied or highly satisfied with the CRC in
building trust.
Table 19: Performance indicators: Research User satisfaction with the extent to which the CRC
has created opportunities for "critical mass"
How satisfied are you with the extent to which the CRC has Very Satisfied Neither Dissatis- Not sure Total
created opportunities for researchers to: satisfied % Satisfied or fied % %
% Dissatisfied %
%
Obtaining access to f&e within the CRC 24 48 20 4 4 100
Obtaining access to f&e outside the CRC 8 40 24 4 24 100
Build trust and confidence within the research community 12 60 16 4 8 100
Build trust and confidence within your industry 12 40 28 16 4 100
Obtain career advancement/recognition 16 28 40 4 12 100
Undertake and commit to undertaking long term research 48 28 12 12 0 100

The high proportion of “unsure” in relation to access to facilities and equipment

outside the CRC might suggest that CRCs do not often go outside their collaborative
arrangement, and the importance of CSIRO facilities for the Programme.
The levels of satisfaction with the “critical mass” indicators are even higher from the
perspective of CRC Managers. This is reflected in Table 20.
Table 20: Performance indicators: CRC Manager satisfaction with the extent to which the CRC
has created opportunities for "critical mass"
How satisfied are you with the extent to which your CRC Very Satisfied Neither Dissatis- Not sure Total
has created opportunities for researchers to: satisfied % Satisfied or fied % %
% Dissatisfied %
%
Obtain access to f&e of the CRC participants 36 52 6 4 2 100
Obtaining access to f&e outside of the CRC participants 8 34 46 2 10 100
Build trust and confidence within the research community 36 42 14 4 4 100
Build trust and confidence with industry 38 44 12 4 2 100
Obtain career advancement/recognition 26 40 20 4 10 100
Undertake and commit to undertaking long term research 42 40 10 6 2 100

The CRC Managers are also very happy with the levels of trust and confidence that
has been established within the research community and within industry, as well as
prospects for career advancement and to undertake longer-term research.

59
Evaluation of the CRC Programme 2003

These findings in relation to critical mass must be regarded as a highly

positive impact of the Programme.

5.5 Conclusion
The following broad generalisations may be drawn from the outputs and the Out-
comes Survey data that provides quantitative and qualitative perspectives of the views
of participants in CRCs.

5.5.1 Research output

The volume of research output from CRCs is considerable, as reflected in the numbers
of publications and patents. Publication is particularly strong in the environment and
agriculture sector. Publication in these sectors is an important way of communicating
research results to users in government and non-government organisations involved in
restoration of natural capital and improved agricultural practices.
Patenting has been particularly strong in the pharmaceutical and medical related
CRCs. However, in CRCs related to mining and energy, patenting is less important
than adoption by industry users.

5.5.2 Research outcomes

With some exceptions, most CRC participants regard the research being undertaken as
being at least satisfactory to their interests in terms of business impact, and more
satisfactory in regards to its quality, and the technical capability of the people doing
the work. Most participants see research as relevant to their business.
Compared with the CRC research users, the views of the CRC Managers are signifi-
cantly more positive - rating far higher the impact of CRC research, and in stimulating
new research projects in industry, new products and IP, improving industry profitabil-
ity and building community capacity. This group viewed the impact of the CRCs’
research as considerably greater than CRC research users when asked the same
questions. This reflects the broader perspective of CRC Managers and their focus on
broader and environmental economic benefits and potential benefits rather than direct
business benefit.
CRC Managers are slightly more satisfied that their CRCs have created a climate of
trust and confidence with users that will lead to long-term commitment to undertake
research. The divergence of views is not as extreme as differences in perceived
impact of R&D. Managers are also marginally more confident in believing that CRC
outcomes have resulted in both business and government developing new products,
processes and supply chain practices.

60
Evaluation of the CRC Programme 2003

6: Education Outputs and Outcomes

The “Education” objective for the CRC Programme is:

To enhance the value to Australia of graduate researchers.

The Terms of Reference require consideration of the following:

Increasing the proportion of public researchers who are commercially oriented.

The performance indicators that were identified in the Performance Monitoring

Framework for the Evaluation are as follows.
Path to Output
Source Outcome Indicators Source
Adoption Indicators
Industry/business/user satisfaction
with: Survey of
Graduates MDQ
PhD and businesses/
with relevant Data . Qualities and capabilities of CRC
Masters industry/
and applicable CRC graduates
Degree government
industry Annual Industry willingness/ preparedness to:
Graduates organisations
knowledge Reports . Recruit CRC graduates in preference involved in CRCs
to other graduates

Information collected in relation to these indicators is provided in this Section.

6.1 Resources allocated

According to Department of Education, Science and Training data, CRCs have
allocated 6.5 percent of their resources to education in the period 1998-99 to 2001-02.
Only nine CRCs allocated more than ten percent of their resources to education.
These CRCs are spread across all industry and technology categories.
Expenditure on Education does not include the full cost of education and research
training, as many students are on scholarships and awards. The data will include
additional payments to students over and above an award remuneration.
Universities indicated during the Evaluation that establishing specifically designed
education programmes, such as course-work masters and short courses, within CRCs
involved high costs and often attracted little interest from end user organisations.
The market for short course education programmes is also highly contested.

6.2 Graduates with relevant and applicable industry knowledge

6.2.1 Output information

Between 1991-92 and 2001-02, the MDQ data indicates that 2,621 students have
commenced work on a PhD in a CRC and that 1,426 PhDs have been awarded. In
addition, there have been 1,423 Masters Research students commencing and 1,022
completions. The number of students enrolled in formal postgraduate coursework
qualifications totals 527 for the period. There have been a total of 327 coursework
Masters degrees awarded.
The number of undergraduates taking part in education courses has been recorded as
62,519.

61
Evaluation of the CRC Programme 2003

The numbers of full time equivalent (FTE) students in CRCs over the life of the
Programme is provided in Table 21. The table indicates a fall off in enrolments in
1998-99, picking up again in 2000-01.
Table 21: PhD, Masters and Undergraduate Students - 1991-92 - 2001-02
1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001-
92 93 94 95 96 97 98 99 00 01 02
No. No. No. No. No. No. No. No. No. No. No.
Full time equivalent PhD students 94 425 783 1,006 1,158 1,277 1,248 1,111 1,003 1,253 1,391
Full time equivalent masters research students 53 172 292 318 340 350 377 254 383 179 208
Full time equivalent numbers of postgraduate
coursework students 296 451
Undergraduates taking part in Education
courses 708 3,576 3,028 4,203 6,561 5,546 n.a. 5,976 4,774 7,733 9,124

For the purposes of comparison, information relating to the total number of PhD and
Masters students in Australian universities at June 2002 is provided in Table 22.
Table 22: PhD and Masters Students in Australian universities June 2002
Field of Education Doctorate by Doctorate by Master's by Master's by
Research Coursework Research Coursework
Natural and Physical Sciences 6,553 7 1,081 1,690
Information Technology 1,000 30 301 12,707
Engineering and Related Technologies 3,374 0 1,228 4,706
Architecture and Building 425 0 267 1,351
Agriculture, Environmental and Related Studies 1,517 1 461 1,352
Health 4,663 55 1,216 7,573
17,532 93 4,554 29,379
Other 16,508 1,401 5,615 82,663
Total (a) 34,040 1,494 10,169 112,042

Overall, CRC PhDs amount to about eight percent of all PhDs enrolled in science,
technology and innovation-related fields of education. However, the involvement of
CRCs in PhD education varies significantly across these fields. To gain a perspective
of the relative concentration of PhD students, information concerning CRC PhD
enrolments according to industry and technology category is provided in Table 23.
Table 23: CRC PhD enrolments according to industry and technology
1998/1999 1999/2000 2000/2001 2001/2002
Agriculture and Rural Based Manufacturing 207 216 261 256
Environment 377 350 405 424
Information and Communication Technology 164 99 188 242
Manufacturing Technology 88 60 119 146
Medical Science and Technology 94 113 136 157
Mining and Energy 181 165 144 166
1,111 992 1,232 1,356

The data in Table 23 suggest that CRCs account for about 25 percent of the ICT
candidates, 45 percent of agriculture and environment candidates and approximately
10 percent of candidates in the engineering and minerals areas.
From the data available, it would appear that the CRC Programme has made a major
contribution to the education of researchers in the areas of agriculture and the envi-
ronment, and to a lesser extent in the ICT area.
A further indicator of the contribution of the CRC Programme to educating graduates
with relevant and applicable industry knowledge relates to employment following
graduation. Information on CRC graduates obtaining jobs in industry following
completion over the last four years is provided in Table 24.

62
Evaluation of the CRC Programme 2003

Table 24: Number of students from CRCs taking up employment with industry/end users
1998/1999 1999/2000 2000/2001 2001/2002 Total
Agriculture and Rural Based Manufacturing 33 62 38 35 168
Environment 67 73 67 82 289
Information and Communication Technology 26 11 46 24 107
Manufacturing Technology 23 18 36 22 99
Medical Science and Technology 24 39 49 41 153
Mining and Energy 48 59 44 34 185
394 465 523 455 1,655

Many graduates take up employment with a CRC participant organisation. Consis-

tent with the data on enrolments, the highest levels of employment for CRC PhDs
related to the environment - and particularly the Antarctic CRC.

6.2.2 Outcome information

The Outcomes Survey indicated that 72 percent of research users were either satisfied
or very satisfied with the qualities and capabilities of CRC graduates. Thirty six
percent indicated a high to very high willingness to recruit CRC graduates in prefer-
ence to other graduates. 50
CRC Managers rated their perception of the satisfaction of employers with the capa-
bilities of CRC graduates at 82 percent (25 percent satisfied and 58 percent very
satisfied). They also rated highly (30 percent) or very highly (44 percent) the prefer-
ence of employers to recruit CRC graduates in preference to other graduates. This
apparent discrepancy may be associated with the high proportion of PhDs in agricul-
ture and environment and their career path to public research organisations.

6.3 Supervisors with relevant industry knowledge

The number of non university staff supervising post graduates provides an additional
indicator of the role of CRCs in the creation of industry relevant knowledge. This is
provided in Table 25
Table 25: Number of non-university staff supervising research postgraduates in CRCs
1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002
Agriculture and Rural Based Manufacturing 200 218 136 158 138 159
Environment 164 216 189 149 146 141
Information and Communication Technology 31 27 20 8 60 37
Manufacturing Technology 48 68 50 30 23 43
Medical Science and Technology 59 54 50 63 74 52
Mining and Energy 71 100 89 97 60 60
573 683 534 505 501 492

The data indicate a decline in the level of commitment over the years since 1998-99.
This would reflect the changing mix of CRCs as older ones wind up and newer ones
come on stream.
From the Outcomes Survey, the data indicate that 40 percent of research users rated
the contribution of postgraduate supervisors from industry as being high or very high.
The equivalent rating from CRC Managers was 56 percent.

50
This may reflects a sampling bias as government agencies as users were not extensively sampled. This may have to be
addressed – particularly in the light of the inconsistency with CRC Manager views.

63
Evaluation of the CRC Programme 2003

6.4 Conclusion
It is clear from the output data that CRCs are having a major influence in education
relating to the agriculture and the natural resource management sectors. By contrast,
the influence is low in manufacturing.
Based on the Outcome Survey evidence, industry participants have a positive to very
positive view as to the CRC graduates and students, showing significant preference
for employing CRC graduates over others and have positive views about the influence
of industry supervisors in their education.
CRC Managers believe employers are overwhelmingly very satisfied or satisfied with
their graduates and were significantly preferred over graduates from other courses.
The extent of their belief was even greater than the positive views held by industry
partners. They also rated the influence of industry supervisors positively.
Consultations and submissions suggested that there is an unrealised opportunity for
CRCs to add considerable extra value through education programmes that go beyond
the current offerings of the partners. The Deputy Vice Chancellor, Research, at
Curtin University commented:
I would judge most present education programmes as very competent, usually em-
bracing sizeable PhD programmes, scholarships, visiting fellows, workshops, confer-
ences, annual reviews and coursework programmes (some of which even involve
links between institutions).
The research-based PhD programme was introduced in Australia in the late 1940’s to
address the weakness in its science and technology base exposed during the Second
World War. Today, most higher degree work in the science/engineering/technology
sector is still carried out by research, despite repeated calls for graduates with a better
mix of skills in areas such as communication, ability to learn, capacity for coopera-
tive teamwork and capacity to make decisions and solve problems.

Some Australian universities have implemented additional coursework studies to

extend the learning opportunities for PhD students and their supervisors in areas such
as commercialisation, entrepreneurship, leadership, and project management.

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Evaluation of the CRC Programme 2003

7: Commercialisation/Technology Transfer Outputs and

Outcomes

The “Commercialisation/Technology Transfer” objective of the CRC Programme is:

To enhance the transfer of research outputs into commercial or other outcomes of
economic, environmental or social benefit.

The Terms of Reference in this area refer to:

Adding to the nation’s intellectual property and its commercialisation or utilisation.
Upgrading the innovative capacities of Australian business enterprises.
Improving the basis for public policy formulation and Programme delivery.

The performance indicators that were identified in the Performance Monitoring

Framework for the Evaluation are as follows.

Path to Adoption Output Indicator Source Outcome Indicator Source

Extent to which CRC research

Widespread
outcomes have impacted on and/or been
adoption across
reflected in:
Adoption of industries. Survey of
Business and/or government commit-
new/improved Incorporation of CRC Annual busi-
ment to development of new and/or
procedures, practices research results in reports nesses/industry/gov
improved products; production
and processes in public programmes CRCA ernment
processes supply chain practice, and
industry and/or in health services, Reports. organisations
public programme performance.
government agriculture and involved in CRCs.
Impact in relation to increases in sales,
natural resource
exports, profits, employment and
management
improved Programme performance.
Survey of
Extent to which patents have been used
busi-
Sale or Licensing of MDQ Data and applied in the production of
Patent licensing nesses/industry/gov
technologies to CRC Annual new/improved products.
and or sale. ernment
existing businesses Reports. Impact in relation to increases in sales,
organisations
exports, profits, employment.
involved in CRCs
Extent to which spin-out companies
Creation of new develop into valuable companies that
Consultant
businesses in the Start up companies MDQ Data produce products and services for end
research; economic
form of spin-out created. Research. users.
impact data.
companies Impact in relation to increases in sales,
exports, profits, employment.
Strategic alli-
Alliances and
ances/partnerships
partnerships
directed towards MDQ Data Extent to which commercialisation Consultant
formed.
implementing new CRC Annual agreements result in increases in sales, research; economic
Commercialisation
processes and/or Reports. exports, profits, employment. impact data.
agreements entered
bringing products to
into.
market
Survey of
Industry/business satisfaction with
busi-
Provision of contract MDQ Data performance of CRC research in
Contracts entered nesses/industry/gov
research services for CRC Annual fulfilling contract specifications.
into. ernment
businesses Reports. Impact in relation to increases in sales,
organisations
exports, profits, employment.
involved in CRCs.

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Evaluation of the CRC Programme 2003

Information relating to these indicators is provided in this Section of the Report.51

This is preceded by a brief discussion concerning resource allocation.

7.1 Resources allocated

Commercialisation and technology transfer is a major objective of the CRC Pro-
gramme. However, from an overall perspective, and according to Department of
Education, Science and Training data, only 8.2 percent of resources are allocated to
this category. But within the category there are some major individual CRC commit-
ments. For example, five CRCs allocate more than 20 percent of their resources to
this category and a further five allocate more than 10 percent.52
Expenditure on commercialisation is a good indicator of commercialisation commit-
ment for CRCs where the path to market is new products or business models. Other
parties may allocate additional resources where commercialisation is being under-
taken by a start-up company (such as technology investor). However, CRCs need to
apply resources to get the research to a stage where it is “investment ready”. It would
be expected that there would be an increased resource commitment to commercialisa-
tion at the later stage of the CRC life cycle.
There are also many CRCs where research is adopted through the processes of
research itself and it is difficult to disentangle what activity is research related and
what is application related. This aspect of industrial research provides an important
base for the CRC Programme. It is reflected in those CRCs that have a close collabo-
rative arrangement between researchers and industry partners.
Nonetheless, CRCs with a focus on business development need to commit substantial
resources to this specialised field of activity.

7.2 Adoption of new/improved procedures, practices and processes in

industry and/or government

7.2.1 Output data

An analysis was undertaken of recent CRC Reports and Reviews, to identify discover-
ies and inventions that have resulted in an identified application or use and the extent
of adoption and estimated economic benefits.
The results of that analysis are set out in Table 26. Information about economic
impact, adoption and take-up is included where available.
Table 26: Reported CRC discoveries and inventions and evidence of adoption and utilisation
Reported Discoveries and Inventions and Evidence of Adoption (Innovation) and Benefits
Agriculture
CRC for Aquaculture Biodegradable coating used to protect $10M worth of pearl oyster shells and $5M of salmon
CRC for Australian Sheep Electronic sheep management to increase flock productivity
Industry
CRC for Cattle and Beef Genetic tenderness test for beef cattle
Quality

51
The Evaluation sought information relating to economic impact (employment, exports, profits particularly) through a special
survey of CRC initiated start-up companies. The results and the low response rate indicated that it was too early to reach any
conclusions in regard to economic impact of CRCs at this stage.
52
The data relating to expenditure on commercialisation and technology transfer can tend to overstate variations between
individual CRCs due to the state at which they are in their development.

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Evaluation of the CRC Programme 2003

Reported Discoveries and Inventions and Evidence of Adoption (Innovation) and Benefits
CRC for Molecular Plant Halved time of development of new cereal cultivars with increased drought resistance
Breeding
CRC for Quality Wheat Adoption of PrimeHard wheat; estimated increased income to growers of $9M from adoption
Products and Processes
CRC for Sustainable DNA probes to measure environmental health of fish farms
Aquaculture of Finfish
CRC for Sustainable Potential payoff of $194M from $2.8M research leading to improvement to the genetic potential of eucalypts for
Production Forestry hardwood plantations
CRC for Sustainable Sugar Linkage of sugar runoff and fishkill; Significant gain in sugar content from adoption of new supply management
Production
CRC for Viticulture Contribution of more than $14M to wine industry through a software package on crop management
Environment
CRC for Catchment Hydrology Reductions of up to 50% in costs of proposed works through application of urban stormwater decision-support
system
CRC for Coastal Zone, Impact and management of sewage overflows in Brisbane
Estuary and Waterway
Management
CRC for Freshwater Ecology New techniques to assess river health
CRC for Sustainable Cotton CottonLOGIC software for Palm Pilot to optimise pest management
Production First specific weed guide for cotton
Irrigation management decision support system to improve crop water management
CRC for Sustainable Tourism Expected earnings of $3M expected by 2004-5 from system to measure environmental impact of various forms
of tourism
CRC for the Great Barrier Feasibility of sterilising ballast water
Reef World Heritage Area
CRC for Tropical Plant Diagnostics for two banana diseases with potential to save millions of dollars
Protection
CRC for Waste Management Sale of subsidiary Waste Technologies of Australia in a 3-stage $20M deal
and Pollution Control Ltd
CRC for Weed Management Estimates of potential savings of $45M over the next 30 years through biocontrol of bitou bush
Systems
Information and Communication Technologies
Australian Photonics CRC Direct Rite system allows signals to travel 120 kms without requiring amplification, which will substantially
reduce the costs of upgrading telecom networks
CRC for Sensor Signal and Slope Stability radar to detect movement in open cut coalmine walls
Information Processing
Manufacturing
CRC for Advanced Composite Time-saving by Boeing-H-de-H in lamination of parts estimated at $100k per part per year.
Structures Pullforming reduced labour by30% (in one application) with a potential saving of $0.5M over 5 years
CRC for International Food Enzyme-based paper production from recycled materials estimated by Visy to increase its earnings by 0.5-1.0M
Manufacture & Packaging per year
Science
CRC for Welded Structures Faster construction procedures for natural gas transmission pipelines estimated saving of $10M
Medical
CRC for Aboriginal and Targeting kidney disease
Tropical Health
CRC for Asthma Human genome project gives flying start in identifying genes linked to asthma
CRC for Bioproducts Demonstration of potential of plant cell culture to make pharmaceuticals on a large scale
CRC for Cellular Growth Identification of EGF receptor, regarded as ideal binding site for a new class of anti-cancer drug
Factors
CRC for Chronic Inflammatory Identification of a range of promising molecules associated with chronic inflammatory diseases
Diseases
CRC for Discovery of Genes Close to identifying key genes behind endometriosis
for Common Human Diseases
CRC for Eye Research and Developing implantable contact lens
Technology
CRC for Tissue Growth and GroPep (commercial arm) listed in 2000 with market capitalisation of $60M
Repair
CRC for Vaccine Technology Progress towards a vaccine for CMV – a cause of crippling birth defects
Mining and Energy
AJ Parker CRC for Realised benefit by companies of $34 M (benefit/cost ratio of 10:1)
Hydrometallurgy
Australian CRC for Solar power to 200 remote indigenous communities; Stand-alone P/V system, Wilpena Pound, SA; High
Renewable Energy penetration wind turbine, Denham, WA; Wind turbine hardware, Exmouth, WA; P/V trough systems in Solahart
installation, Rockingham, WA; AIEW grid installation of a zinc bromide battery, White Cliffs, NSW
Australian Petroleum CRC Independent economic analysis identified NPV in excess of $300M from $8 M CRC investment
CRC for Clean Power from Potential for 15% reduced greenhouse emission, 50% increased efficiency, from burning brown coal
Lignite
CRC for Mining Technology Tight radius drilling allowing access to gas in currently unmineable coal beds
and Equipment

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Evaluation of the CRC Programme 2003

This material indicates a substantial level of achievement, but it has been difficult to
identify and draw out from the array of material that is currently produced. As
suggested in Section 4.6 information needs to be prepared and disseminated in a more
effective way to target audiences in government, industry and the community.
As indicated earlier, the issue is not about publicity and promotion: it is about com-
munication. Communication is best approached from the perspective of the receiver –
not the sender. Production of a glossy brochure or magazine, with “good news”
stories does not of itself amount to communication. Such material may merely create
“noise” and divert attention from the processes for attracting the attention of potential
investors and users.
Recommendation
I - 4. A communication strategy be developed for the CRC programme that
is directed towards the provision of consistent, standardised and rele-
vant information to industry, government and the community about
CRC results and achievements. The strategy focus on the way in
which research has been adopted and applied, and include informa-
tion on demonstrated economic, social and environment benefits.
The strategy be resourced from within the CRC Programme and co-
ordinated by the CRC Association.

7.2.2 Outcome information

In the Outcomes Survey all research users were asked a number of questions in
relation to the extent to which their organisations had taken up research results in the
development of new products, processes, supply chain practices or methods of service
delivery. Information in relation to adoption in a commercial context is provided in
Table 27.
Table 27: Performance Indicator: Adoption in Commercial Application
To what extent do you think CRC research outcomes has Very High Moder- Low Very Not Total
resulted in your business / company commitment to: High % ate % Low Sure/
% % % missing
%
Develop new and/or improved products 8 24 - 24 16 28 100
Develop new and/or improved production processes 4 16 20 12 16 32 100
Develop new and/or improved supply chain practices - 8 16 12 20 44 100
Develop new and/or improved methods of service delivery - 8 12 20 16 44 100

The responses indicate that only 32 percent of research users rated the contribution of
CRC research to new or improved products as high or very high. Forty percent rated
the contribution as either low or very low. A similar pattern emerges in relation to
adoption in production, supply chain practices and service delivery.
A very substantial proportion of respondents indicated that they were “not sure” or
did not answer the question. This might suggest that the research results are too early
to be refected in a business context and a motivation for CRC participation beyond
direct commercial return. This explanation would relate to why 50 percent of re-
search users indicated that they would remain in the CRC Programme. CRC user
participants who are focussed primarily on national benefit outcomes would also
provide responses in this category.

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Evaluation of the CRC Programme 2003

In relation to the adoption of research from CRCs targeted at non-commercial applica-

tion, the Outcomes Survey indicated that most research users were not sure whether
the results had been adopted in one or more programmes. This is indicated in Table
28.53
Table 28: Performance Indicator: Adoption in Public Programmes
To what extent do you think CRC research Very High High Moderate Low Very Not Sure Total
outcomes has resulted in Government’s % % % % Low %
commitment to development of new or %
improved
Legislation and/or new regulations - 12 8 16 12 52 100
Industry support programmes 4 16 8 12 4 56 100
Methods of service delivery - 8 16 24 4 48 100
Supply chain practices - 12 16 12 8 52 100

The high level of responses in the “not sure” category also suggests that it might be
too early to ascertain impact as well as a perception on the part of commercial CRC
user participants that the question was not applicable to their interests or involvement.
From a CRC Manager perspective, the perception of levels of commitment to adop-
tion is much higher. This is reflected in Table 29. That is, 42 percent of CRC Manag-
ers rate as high or very high the level of adoption of research in new products and 52
percent in new production processes. The difference in perception between research
users and CRC Managers might reflect differences in time horizon and CRC Manager
perception of user commitment based on potential.
Table 29: Performance Indicator: Perceptions of commercial adoption by CRC Managers
To what extent do you think your CRC research outcomes Very High Moder- Low Very Not Total
has resulted in business and / or Govnt. commitment to: High % ate % Low Sure/
% % % missing
%
Develop new and/or improved products 18 24 26 10 - 22 100
Develop new and/or improved production processes 24 28 16 6 - 26 100
Develop new and/or improved supply chain practices 6 12 16 14 2 50 100
Develop new and/or improved industry support 8 16 26 10 6 34 100
programmes

In relation to adoption through government initiatives and action, the overall level of
adoptions is perceived to be moderate. In the area of adoption in broad industry
practices, the perceived level of adoption rates at 58 percent in the high to very high
categories. This is indicated in Table 30.
Table 30: Performance Indicator: Perceptions of public sector adoption by CRC Managers
To what extent do you think your CRCs Very High High Moderate Low Very N/A Total
research outcomes have resulted in more % % % % Low /missing
effective: % %
Legislation or Regulations 8 6 24 10 2 50 100
Government programmes 6 24 26 6 6 32 100
Methods of service delivery 4 26 18 8 2 42 100
Community behaviours 2 20 12 8 2 56 100
Industry practices 16 42 24 4 - 14 100

There is a very high level of uncertainty in the answer to the question in relation to the
extent of adoption in regulatory processes and community behaviours.

53
Not sure whether this table relates to all users or to users with a “public benefit” orientation

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Evaluation of the CRC Programme 2003

7.3 Sale or licensing of technologies to existing businesses

Output indicators relating to technology licensing and/or transfer are provided in
Table 31.
Table 31: CRC Programme Outputs - Technology Transfer/Commercialisation 2000-01 - 2001-02
(Total)
Total
Number of technology commercialisation agreements 474
Number of licenses or options on intellectual property contracted 233
Number of agreements on outright sale of technology to industry and other end users 8
Other commercial agreements 60
IP maintained in Australia (patents) 709
IP maintained Overseas (patents) 59

Up until 2001-02 collection of information relating to technology agreements has

been aggregated. More recent collections break this down into income from licenses
and options on intellectual property contracted, income from spin-out companies, and
income from other commercial agreements. Discussion of spin-out companies is
contained in Section 7.4.
Between 1991-92 and 2000-2001 CRCs generated $32m in income from technology
agreements. The distribution across industry is identified in Table 32.
Table 32: Income (000s) from Technology Agreements exceeding $100,000 (1991-1992 – 2000-
2001)
Total
Mining and Energy 16,103
Manufacturing Technology 1,500
Information and Communication Technology 1,583
Agriculture and Rural Based Manufacturing 106
Environment 3,440
Medical Science and Technology 8,037
Total all CRCs 32,805

Within the totals of Table 32, there has been substantial income generated by the
CMTE, the CRC for Waste Management and Pollution Control and the CRC for
Tissue Growth and Repair.
Between 2000 and 2002, 23 CRCs reported income from licenses and options on
intellectual property. The total income for the two years combined was $10.2m.
Forty two percent of this income was sourced to the Photonics CRC. CRC income
from other commercial agreements amounted to $1.2m over the same period. Seven
CRCs received income from this source.

7.4 Creation of new businesses in the form of “start-up” companies54

Research undertaken for the CRC Association by John Yenken of Karingal Consult-
ants reports a total of $30.4m in sales in 2001-2002 for CRC spin-out companies.
Projections, supplied by the CRCs are for sales to reach $944m. The estimated time
frame for the sales revenue to be realised is not available. Atmosphere Networks, a

54
The terms “start-up” and “spin-out” are used interchangeably in this Report.

70
Evaluation of the CRC Programme 2003

company created from the CRC for Telecommunications to produce copper loop
broadband networking is reported as having been sold for $88.5m.55
The income from spin-out companies flowing back to the CRCs as reported to the
Department of Education, Science and Training totalled $6.5m over the two year
period 2000-01 to 2001-2002. The relatively small scale of this income provides a
context when looking at the complexity and cost of preparing Centre Agreements for
some CRCs where potential for possible IP revenue streams are envisaged.
These results suggests that if the CRC Programme is to achieve more in the area of
research commercialisation, existing CRCs will need to allocate more resources to
this area of activity, and the Programme will need to support more CRCs with a
specific focus on business development and the commercialisation of research. As
indicated earlier, recommendations are made in Part II for the Programme to focus
specifically on supporting CRC applications that are based on “investment” proposals.

7.5 Strategic alliances/partnerships directed towards implementing new

processes and/or bringing products to market (commercialisation
agreements)
The Outcome Survey sought information about CRC performance in fulfilling specifi-
cations in relation to commercialisation agreements and business partnership agree-
ments. The perceptions of research users, answering from a business perspective, is
provided in Table 33.
Table 33: Performance indicator: User perspective on CRC performance in commercialisation
agreements and partnerships
How would you rate your satisfaction with the Very High High Moderate Low Very N/A Total
performance of your CRC’s research in fulfilling % % % % Low /missing
the specifications in its: % %
Commercialisation agreements 16 - 20 16 8 40 100
Business partnership contracts 12 4 20 12 8 44 100

According to Table 33, 16 percent of research users rate the performance of CRCs as
very high in relation to commercialisation agreements and 12 percent in relation to
business partnership agreements. The very high proportion of responses classified as
not applicable would be a reflection of the relatively low number of CRCs that are
engaged in this activity. The perspective of CRC Managers on this issue is reported
in Table 34.
Table 34: Performance indicator: CRC Manager perspective on CRC performance in commer-
cialisation agreements and partnerships
How would you rate industry/business Very High High Moderate Low Very N/A Total
satisfaction with the performance of your CRCs % % % % Low /missing
research in fulfilling the specifications in its: % %
Commercialisation agreements 14 26 14 - - 46 100
Business partnership contracts 16 38 14 2 - 30 100

Consistent with other responses, CRC Managers rate their performance as much
higher that the research users. However, the non-response rate would also reflect the
low level of involvement across the CRC system in this form of commercial relation-
ship.

55
Cooperative Research Centres Association, CRCs and Spin-Off Companies: Findings from a Survey by the Cooperative
Research Centres Association Inc (Canberra: CRC Association, 2002).

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Evaluation of the CRC Programme 2003

7.6 Provision of contract research services for businesses

Research contracts and consultancy provide a major source of income for many
CRCs. Over the time frame of the Programme, a total of $366m has been generated
from this source. The most significant contributions have been in the Mining and
Energy sector – the AJ Parker Centre, the Petroleum CRC and the CRC for Mining
Technology and Equipment (CMTE). The Centre for Eye Research also generates a
substantial amount of income from research contracts.
The level of income from contract research for CRCs within the major indus-
try/technology categories is listed in Table 35.
Table 35: Income (000s) from research contracts and consultancies from industry-end users
1991-92 – 2001-2002
Total
Mining and Energy 125,910
Manufacturing Technology 24,203
Information and Communication Technologies 34,690
Agriculture and Rural based manufacturing 63,298
Environment 66.446
Medical Science and Technology 51,758
366,305

Information concerning income from contract research on an annual basis is set out in
Table 36. The total level of income for 2000-2001 is in line with the Mercer Stocker
projection of $35.6m in income from this source. However, the Mercer Stocker
prediction was based on 42 CRCs. The level of income increased substantially in
2001-02.
Table 36: Income (000s) from contract research (1998-99 – 2001-2002)
1998-1999 1999-2000 2000-2001 2001-2002
Mining and Energy 16,564 15,876 11,660 19,774
Manufacturing Technology 1,826 2,385 2,219 3,087
Information and Communication Technology 2,780 2,386 3,673 3,952
Agriculture and Rural Based Manufacturing 8,307 12,290 3,769 5,941
Environment 9,818 6,734 7,673 6,723
Medical Science and Technology 5,901 6,193 6,511 9,142
Total all CRCs 46,672 45,403 36,408 50,262

Contract research undertaken in CRCs raises some difficult issues relating to CRC
management. A former General Manager of Rio Tinto observed in a memo to the
Evaluation that the situation for companies working with CRCs, and sponsoring
research projects, is somewhat confusing because of the cooperative structure. That
is:
The underlying project contracts are usually written with one of the CRC joint
venturers, rather than with the CRC itself.
Depending on the nature of the project, most or even all staff involved may be
from just one of the CRC joint venturers.
There is a growing tendency for CRC participants to fund projects, on the basis of
direct, single company arrangements. This can be in addition to pre-competitive
funding by several companies of a project. However, project funding is not yet seen

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Evaluation of the CRC Programme 2003

to be at a level that provides an 'excess' to support core or underlying basic research,

as is undertaken by PhD students.56
The emergence of a substantial focus on research contracting and consultancy reflects
an evolution of the CRC Programme from the opportunistic collaborative arrangement
to the more transactional and integrative (as discussed in Section 3).

7.7 Overall economic and commercial impact

In the Outcomes Survey, research users and CRC Managers were asked about the
economic, social and environmental impacts of research. Responses from research
users are provided in Table 37.
Table 37: Performance indicator: Research user perspective on economic, social and environ-
mental impact
To what extent has your CRC’s research Very High High Moderate Low Very N/A/ Total
outcomes (including patents) had a positive % % % % Low missing
impact in relation to your business’s: % %
Sales 4 8 16 16 32 24 100
Exports - 12 12 16 32 28 100
Profits 4 4 24 12 32 24 100
Employment - 12 8 16 28 36 100
The environment - 8 4 8 12 68 100
Social benefits - 4 12 - 12 72 100

From the perspective of their own business interest, research users report a predomi-
nantly low to very low overall economic impact - as indicated by sales, exports,
profits and employment. There is also a very high level of non-responses, suggesting
that many CRCs are not oriented in this direction.
This perception is not shared by CRC Managers, who see a moderate to high eco-
nomic and industry impact. However, CRC Managers were asked the question in
relation to overall impact – not limited to the businesses of CRC participants. There
is, however, a very high non-response rate, again suggesting that economic impact is
not a major driver for many CRCs. This is indicated in Table 38.
Table 38: Performance indicator: CRC Manager perspective on economic impacts
To what extent has your CRCs research Very High High Moderate Low Very N/A/ Total
outcomes (including patents) has a positive % % % % Low missing
impact in relation to: % %
Sales 2 30 8 8 - 52 100
Exports 2 20 10 14 - 54 100
Profits 6 16 22 10 - 46 100
Employment 2 10 30 10 - 48 100
Industry support programme performance 8 6 20 12 2 52 100

These responses raise issues in relation to the commercialisation/technology transfer

focus of the Programme. This is discussed below.

7.8 Commercialisation in natural resource management

Commercialisation of R&D from the natural resource/environmental CRCs has been
minimal, largely because of its primarily “national benefit” nature, and the need to

56
Submission, Rod Grant, former Chairman of the Metallurgical Society of the Australasian Institute of Mining and former
General manager, Rio Tinto

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Evaluation of the CRC Programme 2003

ensure the uptake and adoption of the R&D by resource managers and users, both in
government and in community groups.
The broader long-term objective of natural resource/environmental CRCs is to pro-
vide information and knowledge to support planning, policy and management proc-
esses to address natural resource degradation and prevent the loss of production and
economic benefits from the use of natural resources.
While there may be particular areas that could be commercialised – perhaps more at
an international than national level – the return would likely not be significant, with
high transaction costs, and the funds to develop the commercialised product would
generally not be forthcoming.
The ‘products’ and outcomes of most CRCs in the environmental category are more
likely to be in the form of:
Adaptive management tools and strategies.
Guidelines for the protection or improved management and use of our natural
environment, its resources and services.
Decision support tools and sound scientific knowledge to inform natural re-
source management decisions.
Software programmes developed for a wide range of applications.
Improved understanding of natural systems, their processes and dynamics, the
risks they face, and their responses to human activity.
As the commercialisation of natural resource and environmental R&D is difficult, the
CRC Programme will need to look for new ways of extending their R&D into the
catchment scene. The application of the R&D should be given a high profile and
focus in all CRCs.

7.9 Concerns over the commercialisation focus of the CRC Programme

In submissions, discussions and consultations there was a strong view that the CRC
Programme should have a much greater orientation towards commercialisation.
The Australian Venture Capital Association (AVCAL), whose members invest mainly
in new companies in the biotechnology and information and communications tech-
nologies areas noted in its submission to the evaluation that:
AVCAL is concerned that the CRC Programme, with some notable exceptions, is on
the whole failing to realise commercial benefits to their full potential. Effective tech-
nology transfer, including commercialisation, is the best method for capturing long-
term economic benefit from the CRC Programme. Successful development of licens-
ing agreements and spin-off companies creates employment, national wealth and
harnesses the benefits of CRC research beyond the term of government funding. The
significance of the CRC Programme as part of Australia’s innovative effort means
that it is in the national interest to ensure that it captures the full potential of its re-
search output.
AVCAL attributes much of this failure to cultural and structural barriers that work
together to inhibit the will and ability of CRCs to interact with the business commu-
nity on commercial terms.

The experience of AVCAL and many of the practitioners in the venture capital
industry is that CRCs are not always focussed on the importance of capturing com-

74
Evaluation of the CRC Programme 2003

mercial returns from their research. The institutional focus of CRCs is seen as being
biased too far towards achieving scientific outputs rather than product development,
while the geographic dispersion of many CRCs often presents difficulties for early
identification and control of IP with commercial potential. Mistrust of venture capital-
ists and a misunderstanding of the real difficulties of effective commercialisation are
seen to compound this situation.
AVCAL argues that “good” people and “good” science are conditions precedent for
creating commercial opportunity. This infers that a stronger focus on the commercial
outcomes of the CRC Programme will maintain the quality of the scientific results
while creating lasting benefit for the community through the creation of employment,
innovation and GDP contribution.
The Victorian Government advised the Evaluation Team that, based on key findings
of a review undertaken of CRCs in the State, and on separate Industry Innovation and
Regional Development consultations, the following recommendations require consid-
eration:
The CRC Programme needs to focus more closely on the outputs of research as
articulated in the objective – “To enhance the transfer of research outputs into
commercial or other outcomes of economic, environmental or social benefits to
Australia”.
CRC funding should be structured to allow commercialisation and technology
transfer activity. CRCs should be encouraged to pursue projects beyond the
stage where the research is completed.
The CRC Programme should place a greater emphasis on industry-led bids.
Such bids typically demonstrate an outcome focus.
Similarly, ACCI expressed a concern that not all CRCs place sufficient resources into
the commercialisation of research. ACCI considered that CRCs be required to
demonstrate a significant increase in commitment to commercialisation of research in
the final two to three years of funding. The purpose of this requirement would be to
ensure that funding for CRCs does not become institutionalised and that the focus
remains on achieving outcomes within seven years, not just on conducting research.
Reflecting these concerns, in some part at least, CRCs selected in the 2002 Selection
Round will be required to prepare commercialisation plans within their first two years
of operation.
The issue of commercialisation and commercial orientation is addressed in Part II of
the Report in the context of shifting the emphasis of the Programme from a “funding”
to an “investment” strategy and specific recognition of CRCs oriented towards new
business development.

7.10 Conclusion
The differences between research user and CRC Manager views presented in this
Section of the Report reflect issues of timeframe and perspective. This is indicated,
for example, in the actual sales revenue of CRC spin-outs in 2001-02 being measured
at $30.4m, but the prospect being in the order of $1 billion. This estimate does not
include prospective sales from promising start-ups where managers have not made

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Evaluation of the CRC Programme 2003

predictions (for example, Carbon ReGen, established to use activated carbon in

drinking water).
It is also the case that some of the criticisms of CRC performance are directed at
CRCs working in areas of emerging technologies where control over intellectual
property, scale up and speed to market are important issues. The prospects for
introducing more agility and flexibility into the CRC model is also addressed in Part
II of the Report.
Nonetheless, the overall performance of the Programme in the area of commercialisa-
tion and technology transfer must be seen as disappointing. The initiatives taken in
the 2002 Selection Round, and the actions proposed in Part II are intended to address
this shortfall. A large part of the proposed strategy for change involves adjusting the
balance of effort within the Programme from a science and technology push to a
demand pull, as represented by technology investors and end users. Part of the
strategy will involve ensuring a high proportion of applications for CRCs in the more
commercially oriented emerging technology areas are supported.

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Evaluation of the CRC Programme 2003

8: Collaboration Outputs and Outcomes

The CRC “Collaboration” objective is:

To enhance collaboration among researchers, between researchers and industry to
other users, and to improve efficiency in the use of intellectual and other research re-
sources.

The Terms of Reference require consideration of whether the Programme has en-
hanced:
“collaboration among public and private researchers, and between public researchers
and commercial or community interest”.

The paths to application identified in the performance indicator framework follow an

analysis of the resources allocated to communication.
Source of Source of
Path to Adoption Output Indicator Outcome Indicator
Information Information

Level of CRC management and participant satisfaction

Connection of with:
purpose and people Numbers of CRCs . Researcher and corporate connection
across collaborating Numbers of . Level of interaction at other levels of the collaborating
organisations participants organisations
. Extent to which ongoing bonds (“social capital”) has
been created.
CRC
Compendium
CRC Annual Level of CRC management and participant satisfaction Survey of CRC
reports with: CEOs and
researchers
Individual CRC . The clarity of purpose and mission
CRC statements Newsletters- Survey of
Clarity of purpose in . The level of detail covered in Centre Agreements
of mission and distribution busi-
the collaboration . The level of integration between collaborating
purpose data nesses/industr
organisations y/government
MDQ data . The relative importance on corporate collaboration organisations
Centre portfolios involved in
Agreements CRCs
2nd and 5th year Level of CRC management and participant satisfaction
review reports with:
. Participant involvement in planning, development and
Mission management of the research programme
Congruence of
statements,
mission, strategy . The extent to which each participant understands the
project design and
and values in the other’s business
involvement in
collaboration . The extent to which collaboration is a strategic tool for
project execution
each participant
. Partners have engaged in developing a shared vision
for the collaboration
CRC
Compendium
Commitment of Level of CRC management and participant satisfaction Survey of CRC
CRC Annual with:
cash and in kind reports CEOs and
contributions that . The extrinsic (measurable) benefits that accrue to each researchers
Individual CRC participant from the CRC
lead to research Survey of
Creation of value Newsletters-
outcomes . The relationship of benefit to cost busi-
from the distribution
Income from IP . The economic, social and environmental value created nesses/industr
collaboration data
licenses, research . The balance of benefits between the participants y/government
MDQ data
contracts, . Increasing value creation and exchange over time organisations
teaching and other Centre involved in
Agreements . The intrinsic value created through the interaction and
services. ties of researchers CRCs
2nd and 5th year
review reports

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Evaluation of the CRC Programme 2003

Source of Source of
Path to Adoption Output Indicator Outcome Indicator
Information Information
Level of user/industry satisfaction with: -
Communication . The level of trust and respect that exists between the
Internal and centre and among participants
between partners
external
and broader Newsletters. . The openness and frankness of communication
publications
research and Websites . Collaboration relationship management Survey of CRC
Press and media
industry . Conversion of potential dissenters CEOs and
profile
constituencies . Publication of CRC activities, performance and researchers
achievements Survey of
Annual Reports Level of CRC Management and participant satisfaction busi-
Newsletters with: nesses/industr
Internal and
. Ongoing improvements in the in collaborative y/government
external Conferences
arrangements organisations
commitments to Websites
Continual learning involved in
learning and Speeches and . Processes for continually assessing learning from the
from and through CRCs
dissemination of papers collaboration
the collaboration
knowledge about delivered on Level of alumni interest and involvement in Centre
effective CRC activities
collaboration. management The level of contract work flowing to the Centre as a
and operation result of referrals by past graduates and staff
Number of
organisa-
tions/entities
involved in Survey of CRC
CRC Level of CRC management and participant satisfaction
collaboration CEOs and
compendium with: researchers
Evidence of ARC Linkage . The level of industry commitment and engagement Survey of
ongoing data
Commitment to the . Continued commitment of resources busi-
collaborations University
collaboration . Mutual expectation among participants nesses/industr
Evidence of research
. Execution capabilities of the Centre y/government
collaborations management
. Participant collaboration portfolio is consistent with organisations
outside the CRC and research
capabilities to commit. involved in
Programme – eg: training reports
CRCs
. ARC Linkage
. Bilateral
arrangements

Information relating to these indicators is presented in the remainder of this Section.

In some output categories, information has already been reported in earlier Sections of
the Report, whilst in others it has been difficult to aggregate information in a system-
atic way. This is due in large part to the way in which information is presented.

8.1 The “collaboration value construct”

All partnerships involve an exchange of value between participants: a key issue is the
value of the collaboration to each. The magnitude, form, source and distribution of
value among the participants is at the heart of relational dynamics. The perceived
worth of an alliance is the ultimate determinant of whether value will be created and
whether it will be sustained. The question of value to the participant organisation has
been a consistent theme of the Evaluation.
Value is different from the perspective of each participant – for example:
University – research/teaching, capacity building
Research organisation – return on investment
Business (private or public) – application, adoption and or use in new processes,
products, programmes that in turn meet a customer need (want)
Public programmes – new knowledge for application in programme design and
implementation (be they expenditure, regulatory, subsidy or communication
programmes)

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Evaluation of the CRC Programme 2003

Government – national, state and regional economic, social and environmental

benefits that would not have been delivered otherwise.
There are four dimensions of value to partners:
Value definition – setting expectations, quantifying benefits and weighing them
against costs
Value creation – how resources can be mobilised to create value, recognising
that different types of resources produce different magnitude of benefit. This
occurs at three levels –
- Generic resource transfer – exchange of money in return for good
research
- Core competencies exchange – each partner’s distinctive
capabilities are used to generate benefits to each partner and the
collaboration – allows for greater potential value creation as each
partner is leveraging special competencies and providing
proprietary/distinctive resources; specific identity of each partner
does makes a difference to the type and level of benefits
- Joint exchange - benefits are joint products derived from the
organisations’ competencies and resources; a particularly high
level source of benefits because it is unique to the alliance and not
replicable by others
Value balance – benefits need to flow in both directions and be deemed ac-
ceptably commensurate in value when each partner seeks ways to advance the
other’s agenda and has learned deeply about the other’s business
Value renewal – relationships are dynamic and subject to alteration due to
changes in the external environment, partners needs and changes in priorities;
successful collaborations can slide into complacency and cease to search for
value opportunities.
A value exchange that gets out of balance can erode a dominant provider’s motivation
to continue investing in the relationship, or will force a provider to attempt to exercise
greater influence on resource exchanges that get out of balance. In collaborations
there is a tendency to slip back into traditional contract role of “purchaser and pro-
vider”. These tendencies arise when trust relationships break down, when the re-
source circumstances of the partners change, and when there is a change in admini-
stration/management regimes in participant organisations.57
The way in which CRCs (and the CRC Programme as a whole) delivers value to
participant organisations is a major issue for the future of the Programme.

8.2 Connection of purpose and people across collaborating organisations

Performance information from the Outcomes Survey in relation to connection of
purpose and people across collaborating organisations is presented in Table 39 and
Table 40.

57
James E. Austin, The Collaboration Challenge: How Nonprofits Succeed Through Strategic Alliances (San Francisco: Jossey
Bass, 2000)

79
Evaluation of the CRC Programme 2003

From the research user perspective there is wide agreement about the level of collabo-
ration within the CRC environment, although the perception is by no means un-
equivocal.
Table 39: Performance Indicators: Research user perception on connection of purpose
How would you rate your agreement to the following Strongly Agree Not sure Dis- Strongly N/A Total
statements: Agree % % agree dis- %
% % agree
%
CRC researchers collaborate widely with my in house
24 44 - 20 8 4 100
researchers
CRC researchers collaborate widely with end users and
4 72 4 8 4 8 100
other organisations
My in house researchers collaborate widely with
28 24 8 28 8 4 100
researchers from other participant organisations
My managers collaborate widely with CRC Managers 24 32 8 24 8 4 100

From the CRC Manager perspective there is a much higher level of agreement with
the proposition that there is a wide level of collaboration within the CRC context.
Table 40: Performance Indicators: CRC Manager perception on connection of purpose
How would you rate your agreement to the following Strongly Agree Not sure Dis- Strongly N/A/ Total
statements: Agree % % agree dis- missing %
% % agree %
%
My CRC Managers collaborate widely with managers in
54 42 - 2 - 2 100
participant organisations
My CRC researchers collaborate widely with other
44 50 - 4 - 2 100
researchers in participant organisations
My CRC researchers collaborate widely with end users and
38 50 6 4 - 2 100
other organisations
My CRC researchers collaborate widely with researchers in
6 44 28 20 - 2 100
other CRCs

The outcome data does serve to indicate that the Programme has been successful in
building collaboration between research users and providers.

8.3 Clarity of purpose in the collaboration

Research user views on the clarity of purpose within the CRCs they are involved with
are set out in Table 41. Approximately two thirds of research users agree or strongly
agree that their CRC strategic documents encourage collaborative relationships.
Table 41: Performance Indicators: Research User Perception on Clarity of Purpose
How would you rate your agreement to the following Strongly Agree Not Dis- Strongly N/A Total
statements: The strategic documents in the CRC (mission Agree % sure agree Disagree %
and goals) encourages collaborative relationships: % % % %
Among researchers 36 32 8 20 4 - 100
Between my business and CRC researchers 20 48 8 8 8 8 100
Between the CRCs stakeholders (researchers and
12 52 12 16 8 - 100
participants) and end users of research outcomes

The views of CRC Managers in relation to the same issues are reflected in Table 42.
In this case approximately 90 percent of CRC Managers either agree or strongly agree
that the strategic documents encourage collaborative relationships.
Table 42: Performance Indicators: CRC Manager Perception on Clarity of Purpose
How would you rate your agreement to the following Strongly Agree Not Dis- Strongly N/A Total
statements: The strategic documents in the CRC (mission Agree % sure agree Disagree %
and goals) encourages collaborative relationships: % % % %
Among researchers 66 24 2 6 - 2 100
Between my CRC researchers and participants 64 28 2 4 - 2 100
Between my CRCs stakeholders (researchers and
64 28 4 2 - 2 100
participants) and end users of research outcomes

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Evaluation of the CRC Programme 2003

8.4 Congruence of mission, strategy and values in the collaboration

The effectiveness of collaboration is impacted by the degree of congruence of mis-
sion, strategy and values in the collaboration. Research user perceptions in relation
to indicators in this area are set out in Table 43.
Table 43: Performance Indicators: Research user perceptions of congruence of mission, strategy
and values
How would you rate your agreement to the following Strongly Agree Not Dis- Strongly N/A/ Total
statements: Agree % sure agree dis- missing
% % % agree %
%
My business was consulted by the CRC when it was
developing its strategic documents (eg collaborative 36 48 4 8 - 4 100
relationships)
My business is encouraged to participate in the planning,
development and management processes eg research 44 36 4 12 4 - 100
planning
The CRC has a high level of understanding of my business 12 60 8 16 4 - 100
My business acknowledges that collaborative arrangements
between all stakeholders in CRCs are essential for the 52 32 12 4 - - 100
efficient use of IP and other resources
I am satisfied with the level of detail about collaborative
arrangements between my business and the CRC covered in 20 36 12 16 8 8 100
the Centre Agreement
Allocation of IP rights have been agreed to by all participants
28 52 - 16 - 4 100
of the CRC
My business has appropriate and agreed performance
12 60 8 16 4 - 100
monitoring procedures/mechanisms for the CRC

Overall, research users have a high regard for operational aspects of the collaborative
arrangements for the CRC they are involved in. There is, however, a significant level
of disagreement in relation to perceptions of the way in which a CRC understands the
participant’s business and indicators of the level of involvement.
CRC Managers also have a very high level of agreement in relation to indicators
relating to mission, strategy and values. This is reflected in Table 44.
Table 44: Performance Indicators: CRC Manager perceptions of congruence of mission, strategy
and values
How would you rate your agreement to the following Strongly Agree Not Dis- Strongl N/A Total
statements: Agree % sure agree y missing
% % % dis- %
agree
%
My CRC worked closely with participant organisations in
62 30 4 2 - 2 100
development of strategic documents (eg mission and goals)
My CRC worked closely with participating organisations in the
48 48 2 - - 2 100
development of management processes eg research planning
All participant organisations have a high level of understand-
16 44 16 22 - 2 100
ing of each others business
The expectations of all participants have been integrated into
16 68 8 6 - 2 100
the research programme
All participant organisations acknowledge that collaborative
relationships are essential for the efficient use of intellectual 38 46 4 10 - 2 100
and other research resources
The Centre agreement contains an appropriate level of detail
34 50 8 6 - 2 100
about collaborative arrangements
Allocation of IP rights have been agreed by all parties 46 44 2 6 - 2 100
All participants have agreed on appropriate performance
22 64 6 4 - 4 100
monitoring procedures/mechanisms

The Survey results indicate a significant level of disagreement with the proposition
that “participant organisations have a high level of understanding of each others
business”.

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Evaluation of the CRC Programme 2003

Overall, the Survey indicates a high level of congruence in mission, strategy and
values in the CRC joint venture relationship.

8.5 Creation of value from the collaboration

In terms of the value created from the collaboration, the views of research users are
more mixed. This is reflected in Table 45.
Table 45: Performance Indicators: Research user perceptions of value from the collaboration
How would you rate the collaborative research Very High High Moderate Low Very Not sure Total
efforts for your business in the flowing areas: % % % % Low %
%
Benefits derived from the CRC 8 44 24 8 8 8 100
The benefits to costs 20 20 12 20 12 16 100
The sharing of benefits between the 12 36 24 12 12 4 100
participants
The creation of long term partnerships 20 32 28 8 8 4 100
Relationships between researchers 20 28 32 8 8 4 100

Table 45 indicates that about half of research users consider they obtain either a high
or very high level of value from the collaboration.
The CRC Manager perception of value created is somewhat higher. This would reflect
the broader focus of collaboration, particularly among other research providers. This
is reflected in Table 46. Eighty six percent of CRC Managers consider that CRCs
have delivered a high or very high level of benefit to participants, although the
relationship of benefits to costs is rated high to very high by only 62 percent of
mangers. There is a strong perception about the value created by long term partner-
ships and relationships between researchers.
Table 46: Performance Indicators: CRC Manager perceptions of value from the collaboration
How would you rate the collaborative research Very High High Moderate Low Very Not Total
efforts of all your participants in the flowing % % % % Low sure/
areas: % missing
%
Benefits derived from the CRC 28 58 10 - - 4 100
The benefits to costs 20 42 24 8 - 6 100
The sharing of benefits between the 10 62 20 4 - 4 100
participants
The creation of long term partnerships 38 50 10 - - 2 100
Relationships between researchers 44 40 14 - - 2 100

8.6 CRC management performance

The levels of satisfaction of CRC research users with indicators relating to CRC
management are indicated in Table 47.
Table 47: Performance Indicators: Research user perceptions of CRC Management
How would you rate your satisfaction with: Very Satisfied Neither Dissatisfied Not sure Total
satisfied % Satisfied or % % %
% Dissatisfied
%
The overall management of the CRC your business
20 44 16 20 - 100
participates in
The level of trust and respect that exists the CRC and your
20 48 12 20 - 100
business
The level of trust and respect that exists between other
12 60 20 4 4 100
participants and your business
The openness and frankness of communication between your
36 48 8 8 - 100
business and the CRC
The management of the collaborative relationship 24 44 16 16 - 100
Publication of CRC activities, performance and achievements
28 40 20 4 8 100
(between stakeholders)

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Evaluation of the CRC Programme 2003

How would you rate your satisfaction with: Very Satisfied Neither Dissatisfied Not sure Total
satisfied % Satisfied or % % %
% Dissatisfied
%
The CRCs commitment to the commercialisation of the
28 48 12 4 8 100
research
Ongoing improvements in collaborative arrangements
16 44 28 8 4 100
between your business and the CRC
The processes available for your business to tap into the
8 48 24 12 8 100
learning from the collaboration with the CRC
The level of CRC’s commitment to ongoing engagement with 24 36 24 16 - 100
your business
The ability of the CRC to deliver on agreed research 12 44 20 16 8 100
objectives

The highest levels of research users’ dissatisfaction relate to the overall management
of the CRC and the level of trust and respect that exists in the CRC. These views
represent only a fifth of overall user perceptions.
CRC research user perceptions of CRC commitment to collaboration in relation to
commercialisation, ongoing engagement and meeting objectives are indicated in
Table 48.
Table 48: Performance Indicators: Research user perceptions of commitment to collaboration
How would you rate your satisfaction with: Very Satisfied Neither Dissatisfied Not sure Total
satisfied % Satisfied or % % %
% Dissatisfied
%
The CRCs commitment to the commercialisa-
28 48 12 4 8 100
tion of the research
The level of CRC’s commitment to ongoing
24 36 24 16 - 100
engagement with your business
The ability of the CRC to deliver on agreed
12 44 20 16 8 100
research objectives

8.7 Collaboration with international networks

A key objective of the Programme is increased collaboration with international
research networks. It is one of the rationales for the increased funding ($227 million
over three years) under the Government’s Backing Australia’s Ability initiative. The
measurement and reporting on this objective of the CRC Programme is not well
defined, and reporting appears to be restricted to CRC Annual Reports and the Man-
agement Data Questionnaire.
The Management Data Questionnaire reports the names and countries of CRC
collaborations. In 2001-02 a total of 935 collaborations were recorded with overseas
institutions. Of these, 29.4 percent were in the United States and 11.7 percent in the
UK. Summary data relating to the countries where collaborations are located are
provided in Table 49.
Table 49: CRC International Collaborations (Number) 1997-98 to 2001-02
Country 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002
USA 136 143 156 239 275
Asia Pacific 125 137 195 265 233
Europe 132 194 189 247 210
UK 55 71 83 106 114
Africa 26 42 46 45 45
Canada 21 21 24 36 38
Latin America 7 12 17 22 12
Middle East 6 9 6 6 8
508 629 716 966 935

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Evaluation of the CRC Programme 2003

The data in Table 49 indicate a substantial increase in the number of collaborations

over the last five years. Outside the USA, the largest number of collaborations is
Australia’s region.
To provide an indication of the range of collaborations Figure 4 summarises informa-
tion prepared by the CRC Association58 in relation to collaborations in the Asian
region from the Directory Asia Initiatives 2002.
Figure 4: Examples of CRC Collaborations in the Asian Region
CRC for Advanced Agreement with the National Aeronautical Laboratory in Tokyo involving joint research and staff and
Composite information exchanges. It is also collaborating with the National University of Singapore and exchanging
Structures (CRC- research information on composite structure
ACS)
CRC for Cast Collaborative links with the Gintic Institute of Manufacturing Technology in Singapore; the Institute of
Metals Manufactur- Metal Research of the Chinese Academy of Sciences; the Centre for Advanced Aerospace Materials,
ing (CAST) Korea; the Korean Automotive Technology Institute; and Yonsei University, Korea.
Australian Photonics Memorandum of Understanding with the Information and Communications University in Daejon, Korea,
CRC for a students/staff exchange program.
Australian Grant from the Government of Hong Kong for collaborative research on signals in electronic and
Telecommunications communications systems. Collaborative research is also underway with the Centre for Wireless
CRC Communications and with the DSO National Labs, both in Singapore, and with the Department of
Applied Mathematics at the Hong Kong Polytechnic University. Links have also been developed with
the Electronics and Telecommunications Research Institute at Daejeon in Korea.
CRC for Satellite Under agreements with the Korea Advanced Institute of Science and Technology (KAIST) and the
Systems Nanyang Technological University (NTU), Singapore, the CRC will develop the FedSat Advanced Data
Acquisition and Messaging payload for launch aboard the Korean microsatellite KAISTSAT-4 in 2003,
and in conjunction with NTU’s small satellite project.
The AJ Parker CRC Collaboration with the Bhurupa University in Thailand and Lampung University in Indonesia on a
for Hydrometallurgy project on the optimisation of crystal growth. Links with scientists at the Regional Research Laboratory
in Bhubaneswar, India and is involved in base metals research with the National Iranian Copper
Industries Company in Iran.
CRC for Clean Three year research project with Hokkaido University, Gunma University and the University of Tokyo
Power from Lignite (supported by the New Energy and Industrial Technology Development Organisation (NEDO) of Japan)
Research collaboration agreement with the Institute of Coal Chemistry of the Chinese Academy of
Sciences, which involves a joint study of the chemical changes that occur during the pyrolysis of bio-
solids and coal.
Collaborating with Taiyuan University of Technology in China on the gasification of Australian and
Chinese coals. Other collaborations involve the National Chemical Laboratory in India, and Okayama
University and Chiba Institute of Technology in Japan.
Australian Cotton Collaborating with the Shanghai Institute of Entomology to develop synthetic volatile attractants for
CRC Heliocoverpa moths. These are being field trialled in China, the Darling Downs and Ord River areas.
CRC for Australian Collaborative research with the Haryana Agricultural University and the Punjab Agricultural University.
Weed Management The research involves the management of herbicide resistant Phalaris minor in the rice-wheat system of
northern India.
CRC for Waste Signed cooperation and commercialisation agreements and entered into R&D contracts, worth over $2
Management and million, with groups in the East and South East Asian regions.
Pollution Control Major collaboration with the Institute of Environmental Technology and Industry (IETI) at Pusan
Limited National University in Korea to establish the Korea-Australia Science and Technology Exchange Centre.
Memoranda of understanding with the Guangdong Environmental Protection Industry Association and
Guangzhou Municipal Environment Protection Bureau to facilitate technical assistance, joint R&D and
the exchange of technical information through workshops and training courses, leading to joint business
partnerships and commercial projects.
Eight technologies from the CRC’s R&D programmes are currently under negotiation for sub-license to
partners in Asia and North America.
CRC for Cochlear Cochlear implant workshop program, which have involved participants from Japan, China, Taiwan,
Implant & Hearing Korea, India, Singapore, Hong Kong, Thailand, Indonesia and Malaysia and have led to a rapid
Aid Innovation expansion of implant clinics in these countries and the adoption of the Australian developed cochlear
(CRC HEAR) technology.
CRC for Diagnos- Through its commercial partner, Panbio Ltd, CRC has established collaborations with the Mahidol
tics (CDx) University in Bangkok on the development and clinical evaluation of tests for nasopharyngeal
carcinoma, melioidosis and typhoid. Also collaborating with researchers at the US Armed Forces
Research Institute for Medical Sciences in Bangkok to clinically validate flaviviris diagnostic tests.

58
CRC Association, CRC Asia Links, Extracts form the Asia Iniatives Directory(CRC Association, 2002, accessed); available
from http://www.crca.asn.au/.

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Evaluation of the CRC Programme 2003

CRC for Eye Links with the L V Presad Eye Institute in Hyderabad, India and collaborates in clinical trials to test new
Research and vision correction and eye care systems and in investigations of ocular inflammation. These trials have
Technology been invaluable in developing CRC products.
(CRCERT) In 1998 successfully completed the Asia Pacific Contact Lens Education Program, which reached 12,750
practitioners in China, Indonesia, Thailand, the Philippines, Taiwan, Malaysia, Singapore and Hong
Kong.
Works closely with the International Centre for Eyecare Education and the International Association of
Contact Lens Educators in the delivery of eyecare services and education to the region.
Development of a contact lens specially for the Asian eye shape. This has involved substantial
innovation in rigid gas permeable contact lens design
Links with the Centre for Cellular and Molecular Biology in Hyderabad; the Harmano Eye Clinic in
Japan; the National Center for Optometry in China; the Tunn Hussein Onn National Eye Hospital in
Kuala Lumpar; the Department of Ophthalmology at Ichikawa Hospital in Tokyo; and Toray Industries
in Japan.
CRC for Vaccine Developed strategic linkages with the International Vaccine Institute in Seoul.
Technology Works with the Human Institute of Parasite Diseases, the Human Medical University and the Institute of
Parasitic Diseases in Shanghai. Work on Epstein Barr virus is facilitated by researchers in Hong Kong.
The centre is also collaborating on the development of a malaria vaccine and has formed a number of
strategic linkages with the help of the Australia India Council.
In India it collaborates with the Indian National Veterinary Institute, the International Centre for Genetic
Engineering and Biotechnology and the Postgraduate Institute of Medical Education and Research. It is
also working with the Papua New Guinea Institute of Medical Research on malaria.

The Association has also prepared documentation relating to collaborations with the
European Union.59
Apart from CRC Annual Reports, there is no process for reporting the outcomes of the
collaborations. The CRC Association should be encouraged to continue reporting the
information as part of Communication Strategy recommended elsewhere in the
Report.
As most multi-national corporations operate on a devolved basis there is very little
international collaboration within the CRC environment in the business domain.
What is unclear is how much collaboration is expected (including to satisfy the
objectives for increased funding under BAA) and how this is spread across types of
CRCs.

8.8 Views of businesses not involved in CRCs

As part of the Evaluation, the Outcomes Survey sought information form businesses
that had not participated in the CRC Programme. A total of 40 telephone interviews
were conducted. Further information about the Survey is located in Attachment 2. Of
those surveyed:
70 percent had an active collaboration strategy.
70 percent had heard of the CRC Programme.
36 percent had been invited to participate in a CRC at formation and 32 percent
after established.
10.7 percent had entered into a contract for the CRC to undertake research with
28.6 percent being very satisfied and 42.9 percent being dissatisfied.
In terms of future involvement in the CRC Programme, respondents provided the
following answers:

59
CRC Association, CRC Research Links with the European Union(CRC Association, 2003, accessed); available from
http://www.crca.asn.au/.

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Evaluation of the CRC Programme 2003

Table 50: Non-Participating Businesses Attitudes to Future Involvement in a CRC

Would you consider: Definitely Probably Possibly Probably Definitely Total
Not Not
Contracting Out Innovation Research to a CRC 10.3 6.9 44.8 27.6 10.3 100.0
Collaborating on Small Scale Research Projects 17.2 24.1 31.0 27.6 100.0
Becoming a participating member of a CRC for the life of a CRC 3.1 13.8 27.6 31.0 24.1 100.0
research programme

The responses indicate that businesses are prepared to become involved in CRCs on a
short term, project by project basis, but are not willing to make a commitment to long
term research. This points to the difficulties, raised elsewhere in the Report, about
finding industry participants who are prepared to commit to longer-term research
programmes.
The commitments to longer terms research are more likely to be found in the public
sector, in areas such as water, agriculture and natural resource management. A recent
development has been the involvement of State governments in CRCs as “industry”
partners in emerging technology and industry categories.

8.9 Conclusion
The following broad generalisations may be drawn from the output data and the
Outcomes Survey that provides a qualitative perspective of the views of participants in
CRCs:
With some exceptions, a significant proportion of the research user participants
feel positive about the way CRCs encourage them to become collaboratively
engaged in strategic planning, in getting people networked and working together
and making facilities available to each other.
Most user participants feel that CRCs do make efforts to understand their
businesses and that there is significant trust and mutual respect across the mem-
bership.
CRC Managers in large majority agree, or agree strongly, that collaboration is
strong between managers and researchers from their CRC with those of partici-
pant organisations and also end users. This is held more firmly than the views of
user participants.
CRC Managers believe more strongly, than their research user counterparts, that
their strategic documents, eg mission and goals, encourage collaboration with
all parties, and consistently rate CRC collaborative benefits significantly higher
than their research user counterparts in regards to benefits, cost benefits, shared
benefits and long term relationships.

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Evaluation of the CRC Programme 2003

9: CRC Administration, Management and Governance

9.1 Resources allocated

According to Department of Education, Science and Training data, CRCs allocate
only eight percent of resources to administration. However, this figure disguises
some major variations.
Although it is possible to hide administrative costs in projects, a commitment of
resources at around ten percent should be seen as acceptable. It may, however, be a
matter of concern that several Round 7 CRCs are allocating in excess of 20 percent to
administration – although this may presumably be associated with set up costs.
Resources allocated to administration are not available to contribute to generating the
outputs and outcomes of a CRC. Every effort should be made by the CRC “industry”
to ensure that these costs are minimised through streamlining and simplification of the
set up procedures and commonality of administrative and business systems. It is
understood that the CRC Association has commenced such an initiative.

9.2 CRC legal structures

CRCs may be incorporated or non-incorporated entities and both models have chalked
up impressive successes60. CRCs typically establish related subsidiary entities when
there is a perceived commercial need. The CSIRO and most universities have
indicated a preference for working through unincorporated entities. Universities
report that more problems have emerged with incorporated bodies, as their objectives
often diverge over time from those of the university.
There are complex legal and taxation issues associated with both incorporated and
unincorporated structures. The issues have given rise to considerable cost in estab-
lishing CRCs through the negotiation and formation of Centre Agreements and related
governance structures. However, there has been little sharing of information among
CRCs with the result that, following a diverse range of advice provided by lawyers
and tax and corporate advisory accountants, CRCs have developed a diverse and
complex range of operational and commercial structures.61
Although some limited generic template agreements are available, new CRCs have
typically spent considerable time and money establishing documentation that is
drafted specifically to their interests. These documents are reviewed and amended
extensively as they pass through many hands, especially in CRCs with multiple
participants. A seasoned CEO has described a typical experience in commencing a
CRC:
As the Centre was unincorporated, both the Australian National University and
CSIRO partners had to be satisfied with and sign off every contract. Yet neither was
made the prime agency and consequently was unable to give the negotiations the
immediate and personal contact they required. Consequently, commercial law firms

60
Of the 63 CRCs in 2002, 51 were unincorporated joint ventures, 8 incorporated and limited by guarantee and tax exempt not
for profit, 3 limited by shares and tax exempt not for profit and one limited by shares and tax paying.
61
See Howard Partners Working Paper. There are a range of other inquiries and advice/guides and published papers on this
matter produced by lawyers/tax/accounting/management professionals.

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Evaluation of the CRC Programme 2003

would be engaged to advise during negotiations and write each contract. The old say-
ing "take two lawyers and expect three opinions" was proven again. It was only in the
Centre’s last two years that an efficient modus operandi was devised. A specialist
contracts firm in Canberra was engaged, with a partner who consulted for, and was
trusted by, both CSIRO and the Australian National University. This proved a boon
for us during contract negotiations. They became faster, the process was clearer and
the understandings on the CRC side were far better.62

It is still the case that the experience of established CRCs has not been extensively
drawn upon, although there are now State-based networks of CRC executives/ busi-
ness managers committed to sharing information. Nevertheless, CRC stakeholders at
CEO and senior executive levels, even after 12 years of CRC operations, hold views
such as:
(At worse) - “there are over 60 different businesses out there”; “its all over the
place”; “after all these years I still go to meetings and hear the same issues and noth-
ing has been done”; “new CRCs are still re-inventing the wheel even 12 years on”.
(At best) - “better systems have been developed but there remains much duplication -
there is need for more consistency and commonality in approach” and “CRCs are
SMEs with disproportionate corporate overheads in their set up and efforts to com-
mercialise their IP”.

The costs to set up a CRC have been estimated to be as much as $1 million in one
instance. ATO rulings on tax status may take 12 months or more.63 This results in
unreasonable waste of time and misallocation of resources, and brings uncertainty,
loss of focus and distraction.
The cost, time and effort that is devoted to the negotiation of Centre Agreements and
establishing the appropriate corporate vehicle in anticipation of a possible stream of
income and capital gain from technology licensing and/or creation of a new business
may be misplaced when considering the track record in this area. The reality is that
there are very few discoveries and inventions that come out of university research that
generate substantial financial returns for the institutions64. Most of the returns accrue
to the investors who take the market risk in the commercialisation process65. The data
presented in Section 8 suggests that the greater part of commercial revenue from
CRCs has come from contact research and consultancy.
This situation may change with a greater focus on commercialisation within the CRC
Programme, but the current complexity in legal arrangements would work against the
creation and operation of CRCs that are directed towards developing a strong com-
mercial focus. The resources required for creating and managing what are essentially
temporary organisations, requiring a high degree of flexibility for participants to enter
and depart, means that for many businesses the opportunity costs are simply too high.

62
Chris Buller and William Taylor, "Partnerships Between Public and Private: The Experience of the Cooperative Research
Centre for Plant Science," AgBioForum 2, no. 1 (1999)
63
In one case the tax ruling took four years.
64
See Australian Centre for Innovation, Howard Partners, and Carisgold, Best Practice Processes for University Research
Commercialisation (Canberra: Department of Education, Science and Training, 2003), and Australia. Australian Research
Council, Commonwealth Scientific and Industrial Research Organisation, and National Health and Medical Research Council,
National Survey of Research Commercialisation (Canberra: Australian Research Council, 2002).
65
There is considerable debate when establishing CRCs about the value of background IP. In the commercialisation process the
value of inventor equity is continually negotiated down by venture capital investors.

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Evaluation of the CRC Programme 2003

The absence of a direct, simple, templated pathway for the set up and running of
CRCs has resulted in a diversion of Commonwealth and other resources into a grow-
ing CRC advisory industry. This has, in turn, resulted in some cases in what might be
seen as excessive set up and administrative costs with replicated advice in regards to
the legal and tax issues confronted by individual CRCs. The complexity involved is
out of proportion to the purpose of a CRC as a public-private industrial research
partnership with an intended limited life. The CRC vehicle should, nonetheless,
facilitate the transformation of a CRC into a more permanent arrangement through an
appropriate exit mechanism.
The Commonwealth, via the CRC Programme administration area, has not had the
mandate to focus attention on these matters. CRCs have had to choose their own set-
up and operational structures. The Commonwealth’s own preference is for CRCs to
be incorporated, or adopt equivalent corporate behaviours if unincorporated. Neither
of these arrangements is necessarily appropriate
The reality is, however, CRC success is largely determined by its leadership, not its
structure. From all accounts during the Evaluation – in workshops, submissions and
interviews – it is the demonstrated CRC leadership provided by a CEO and Chair, the
trusting relationship developed over time between the CEO, Chair and Board, and the
demonstrated cooperative and collaborative behaviours of CRC participants at all
levels that greatly determine the coherence, quality and impact of a CRC’s outcomes.
Options and recommendations for an appropriate CRC entity are canvassed in Part II.

9.3 The role of the board and the chair

The CRC Programme has established mechanisms aimed at achieving a high level of
industry influence in CRC management. The structuring of boards, governance
requirements, ongoing review processes and the incorporation of CRCs have all been
refined to facilitate collaborative arrangements. Industry generally supports these
efforts and believes that they should remain a component of the CRC Programme.
Despite these arrangements, there is a concern that too many governing boards are
provider driven.
As CRCs combine disparate interests - from industry with product and outcome
motives to academia with research and investigation interests, the goals of the CRC
Programme can be compromised in CRCs that fail to actively manage the interests of
all parties. A review by the Victorian Department of Innovation, Industry and Re-
gional Development found that successful CRCs outline clear objectives and strate-
gies to achieve those objectives from the outset.66 Each party’s role in achieving those
objectives must be articulated and agreed at commencement. This must be agreed at
the Board level.
A common observation in submissions and discussions was that the more successful
CRCs have strong and well organised Board structures. This in turn, creates strong
leadership at both the executive and science levels within the CRC. Where strong
leadership at Board level is observed, this has come about primarily by the intent of

66
Submission, Department of Innovation, Industry and Regional Development, Victoria

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Evaluation of the CRC Programme 2003

the organisations making up the CRC, rather than from strong requirements at the
CRC Programme level.
There was a great deal of discussion during the Evaluation about the role of Boards
and the importance of having a predominance of industry membership. However,
most CRC participants look for board “representation” as a way of exercising control
over the Centre’s activities. Other participants do not seek Board “representation” but
exercise influence in Centre activities through other means and channels.
As CRCs move towards a more commercial basis of operation, and the size of finan-
cial responsibilities increases, issues of governance from a corporate perspective
become more salient. A business style of operation requires a business-oriented
structure. The point at which that occurs, however, is a more difficult issue to re-
solve. As suggested above, such a structure may not be necessary or appropriate at
the time a CRC is formed.
The view of most participants is that flexibility should be retained in constitutions and
governance arrangements for CRCs. In its submission the University of Melbourne
pointed out:
Flexibility should be maintained in the models appropriate for CRC management.
There is no convincing evidence available that the incorporated CRCs have a supe-
rior performance to unincorporated CRCs. The key factors should be the strength of
the leadership, the quality of the research programmes, the board of management
structure and the strategies for knowledge protection and transfer. The CRC Pro-
gramme should foster diversity not uniformity of approach to the science and tech-
nology (S&T) management required.67

Both incorporated and unincorporated entities can be successful if well managed.

When management problems arise in uncorporated structures they are more difficult
for participants to deal with when there is an absence of sound governance practices.
For universities, these problems arise when the strategic direction of the CRC di-
verges from that originally agreed to. Such problems can, however, be mitigated with
appropriately structured and accountable boards and competent CEOs.
The CRC Board should clarify each party’s expectation of the others. This should be a
key objective of a Board and is a pre-condition to resolving any issues of priority,
commitment, indemnity, incorporation and management of intellectual property. If
particular difficulties are encountered or anticipated, success in a joint venture may be
achieved through formal partnering or alignment processes involving expert external
facilitation. A CRC Board needs to revisit major issues at regular intervals, especially
if the focus of the CRC is changing. The Board should test expectations against
known joint venture activities.68

9.4 Communication
Managing a CRC requires a major commitment to regular and comprehensive com-
munication amongst participants. This includes communication between:

67
Submission, The University of Melbourne
68
Submission, AMIRA

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Evaluation of the CRC Programme 2003

Researchers within the CRC, especially if they are located at different nodes in
different parts of the country.
The CRC Director, the Board and advisory committees.
Between the Boards of CRCs in a common industry sector.
Between industry nominees on the CRC Boards and the industry organisation.
Between the CRC and industry, government and the community in relation to
results and success.
Establishing and maintaining this level of communication is facilitated when there is
strong industry leadership, as in the mining, agriculture and water industry sectors.
For many CRCs external communication does not appear to be a high priority. Yet
communication is an important path to adoption.
According to the Department of Education, Science and Training data, CRCs spend,
on average, only 1.9 percent of their total expenditure on communication. Given the
purpose of the CRC Programme in promoting adoption, this low level of commitment
to communication is of concern. As stated earlier, communication in this context is
much more than “publicity” or “publication”. It is at the basis of knowl-
edge/technology transfer.
Information collected in the Evaluation Outcomes Survey suggests that most CRCs
have developed strategies for communication. The approaches are listed in Table 51.
Table 51: Proportion of CRCs reporting communication strategies
Developed strategy for communication of CRC Education Published Knowledge News- Website Other
knowledge (what has been learned) to users % reports broker letters % %
% % %
Specific strategy for communicating knowledge – 92 75 37 92 75 7
form of programme

It would appear that most CRCs address communication through their education
programmes, which are a specific target. Other forms of communication rely on
paper based or electronic means. However, it is well established that the most effec-
tive form of knowledge transfer is through direct face to face contact. The level of
commitment to this form of communication, through knowledge brokers, according to
Table 51 is quite low.
Research user perspectives on the effectiveness of CRC communication within the
CRC environment, rates a combined 56 percent high to very high. This is indicated in
Table 52.
Table 52: Performance indicator: Research user view on effectiveness of CRC Communication
strategies
How effective is the overall communication Very High High Moderate Low Very Not sure Total
strategy % % % % Low %
%
The overall communication strategy 8 48 20 12 4 8 100

Effective communication occurs through targeted communication strategies and

campaigns implemented by communication professionals. Results can, and should be
measured by changed behaviours, including adoption.

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Evaluation of the CRC Programme 2003

Recommendation
I - 5. As a condition of approval, CRCs be required to identify a clear and
credible strategy for the communication of research outcomes to tar-
geted end users.

9.5 Critical success factors for CRC performance

CRC participants identified a number of critical success factors for CRCs perform-
ance, which in turn, impact on the overall success of the Programme. They include:
A clear understanding of purpose, mission and measures of success.
A commitment from participants who have both something to give and who can
get more out of the joint venture than operating alone.
The CRC Board should clarify each participant’s expectation of the others.
An active industry oriented Chair and a Board dominated by industry.
First class leadership of the CRC in terms of skills, knowledge and experience
of a CEO and other senior positions.
Key researchers should provide a substantial amount of their time to each CRC.
Regular and comprehensive communication among stakeholders.
The mining industry is associated with what are perceived to be a number of success-
ful CRCs. Success has not been achieved, however, without some difficulties. A
former General Manager of Rio Tinto Limited observed:
The usual structure of a CRC is as a joint venture between universities (i.e. certain university
departments) and one or more divisions of CSIRO. This structure is extraordinarily difficult to
manage, and needs the highest level of management and leadership capability in the CRC CEO
or Director, to make it work in any reasonable fashion.
Almost all employees in the CRC are employed by one of the joint venturers, so their primary
(and monetary) allegiance is to that employer. Very few staff are employed by the CRC itself.
As a result, the CRC CEO has little or no direct authority over the individuals, especially the
researchers.
The researchers - many of whom may not be devoted full time to the CRC - tend not to give full
recognition/allegiance to the CRC; so for example, their technical publications often give their
affiliation as their university department, or CSIRO Division, rather than the CRC.
This situation makes it very difficult for the CRC to attain the stature, such as in terms of
international recognition, that it needs in order to both gain stronger staff allegiance, and industry
recognition and support.
It remains a constant struggle for the CEO in his efforts to weld together the CRC as an entity,
rather than just a 'loose association' to which staff give notional support so that they get their
share of CRC (ie. government) funds.

The joint venture structure also creates extraordinary problems and tensions in
relation to intellectual property, where universities especially tend to jealously defend
their 'right' to patents, and the 'cultural' rights that university staff have in this regard.
Invariably, there are disagreements in relation to the value of Intellectual Property
when it comes to commercialisation negotiations.

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Evaluation of the CRC Programme 2003

9.6 Management and organisational implications of the “maturing” of

the CRC Programme
All organisations tend towards formalisation of structure and routine as they mature;
but structuring without explicit design can be expensive and can direct resources away
from goal achievement. In any organisation there is a need for some degree of
structure and routine, but the critical question for the CRC Programme is where that
structure should be developed and how it should be applied.
It is apparent that the CRC Programme has been “maturing” in that organisation
participants (not necessarily the researchers) are moving from an opportunistic, one-
off approach to involvement in the Programme to a more careful, considered ap-
proach. This maturing reflects an institutionalisation of the Programme on the part of
participating organisations. There is also increased structuring within CRCs, but the
structuring is not uniform or consistent.
It is important to keep in mind that innovation requires organic, or adaptive, arrange-
ments rather than mechanistic, or bureaucratic, structures. This tends to occur best in
relatively small organisations – such as CRCs, which are equivalent in scale to small-
medium businesses. It follows that individual CRCs should have simple management
structures and should be able to draw on experience and learning in relation to centre
agreements, governance, management practices, technology transfer, technology
marketing, taxation advice, financial and information systems, etc.
Notwithstanding the collaborative objectives of the Programme, collaboration has
been mainly at the level of the researcher – suggesting an opportunistic focus. There
has been little collaboration between university administrations and other participant
organisations including the CSIRO and State government agencies. This is reflected
in the diversity of centre agreements, and an inability to get a “participant view” that
would enable standing up to the lawyers, getting the reporting requirements reduced,
changing the selection process, and benchmarking.
The role of the Department of Education, Science and Training under present ar-
rangements relates to compliance and stewardship: it may be inconsistent with that
role to provide advice that could be subsequently challenged through administrative
review procedures (FoI, AAT). It follows that the provision of advice could fall to the
industry association or to an independent objective third party provider.

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10: Programme Management and Administration

The Purpose of this Section is to comment on the current Programme administration

arrangements. Suggestions and recommendations for change are addressed in Section
14.
There is a general view from within government, the universities and business that the
CRC Programme is “over-administered”. The overwhelming message obtained
during the consultations process and in submissions was to streamline the administra-
tive processes and arrangements. This applies to all aspects of the application,
selection, formation, monitoring and review processes.

10.1 Department of Education, Science and Training management respon-

sibilities
The present staffing commitment in the Department of Education, Science and
Training allocated to the CRC Programme is set out in Table 53.
Table 53: CRC Administration - Staffing
Position Classification Commitment (FTE)
Branch Manager SES Band 1 0.5
Managers Executive Level 2 1.5
Assistant Managers Executive Level 1 4.5
Liaison Officers APS 6 4.0
Liaison Officers APS 5 5.0
Project Officer APS 6 1.0
Finance and Administration Support APS 4 1.0
Finance and Administration Support APS 3 1.0
Total Staffing 18.5

These officers are tasked to advise on the development of Programme guidelines and
selection criteria, provide support for the CRC Committee and Expert Panels, and
manage the Programme on a day-to-day basis.
The Programme management tasks are reflected in a number of documents. These
documents, totalling approximately 250 pages, are listed below:
Figure 5: CRC Programme Documentation
Document Pages
Guidelines for Applicants 2002 Selection Round and General Principles for Centre Operations 35
Application Form, including Notes on the Completion of the Application Form 35
Agreement between the Commonwealth and a (nominated party) in relation to a Cooperative Research Centre 38
Model Agreement for the Establishment and Operation of a Cooperative Research Centre 26
Management Data Questionnaire 19
Annual Report Guidelines 22
First Year Visit Guidelines 5
Second Year Review Guidelines 18
Fifth Year Review Guidelines 13
Guidelines for Auditors 6
Visitor Guidelines 14
Windup Guidelines 18
249

The documents reflect the high level of guidance provided and the scope and extent of
review activity. The level of review and reporting activity across the CRC portfolio
involves an enormous amount of effort and generates masses of documentation. This
is quite apart from the work and documentation created by advisers and lawyers
retained by CRCs and participants to work through the documentation.

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Evaluation of the CRC Programme 2003

10.2 Eligibility
To be eligible for financial support, a proposed CRC must include at least one higher
education institution, as well as at least one research user or industry group, among its
core participants.
Applications will be accepted in the fields of natural sciences and engineering.
Applicants may submit proposals in areas that complement existing CRCs. For the
2002 round, the Guidelines for Applicants advised that preference would be given to
proposals that fill major gaps in the research fields currently funded by the CRC
Programme.
Participants in CRCs that are within two years of concluding their current contracts
were eligible to apply for second and third round funding in the latest round. How-
ever, applicants in this category were required to:
Demonstrate a clear record of research, leading to success in commercialisation,
technology transfer or utilisation
Be based on a research programme involving expansion into new areas of
research and the education and training programme related to that research
Demonstrate strengthened or additional collaborative arrangements between
researchers and industry and users particularly in the form of commercialisation,
technology transfer or utilisation.
Existing CRCs were also encouraged to submit applications to seek funding for new
or complementary programmes combining research and commercialisation, technol-
ogy transfer or utilisation that they wish to add to their current contract. Such applica-
tions cannot extend the length of time of the current contract. Any programmes added
must be completed within the current term of the CRC.

10.3 Applying for CRC funding

The first stage of applying for CRC funding is the submission of a Notification of
Intent (NOI). This information was published on the AusIndustry website to inform
all applicants of any related proposals and to encourage possible collaborations.
Applicants that failed to submit a NOI are not precluded from submitting an applica-
tion.
Applicants are advised in the Guidelines for Applicants 2002 Selection Round and
General Principles for Centre Operations that:
All applications will be assessed on merit against the nine CRC Programme
selection criteria (see Figure 6 below).
Applications must be credible against all criteria.
Applicants should aim to develop an integrated and well-balanced proposal.
The documents to be submitted as a proposal are a comprehensive strategic
business plan and a completed application form.
The business plan must specifically address the selection criteria, and be no
more than twenty-five pages in length.
The application requires detailed information on participant’s cash, in-kind and
other contributions as well as details on key staff.

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Evaluation of the CRC Programme 2003

Applicants are invited to attach short curriculum vitae for the proposed CEO and each
key researcher to the Business Plan. Applicants are also invited to attach up to ten
pages of supporting material, including letters from supporting participants (where not
signing the application) identifying financial commitments or letters of support from
industry/stakeholders not participating as a core or supporting participant in the
application. Applications must be a joint submission by all participating organisations.
The head of each organisation must endorse the application.
Figure 6: The Selection Criteria for the 2002 Round
Objectives of the CRC
1 The proposed CRC has well defined objectives that address a specific community and/or industry need.
2 The proposed outcomes of the CRC will make a significant contribution to Australia’s sustainable economic and social
development.
Quality and relevance of the research programme
3 The proposed research programme is of high quality and is well defined, with clear outputs that are achievable over the life of
the CRC. The outputs are relevant to the stated objectives under selection criterion 1.
Strategy for utilisation and commercialisation of research outputs
4 The proposed CRC has a well structured, feasible and practicable strategy for the commercialisation, technology transfer or
utilisation of the research outputs to achieve the proposed outcomes identified under selection criterion 2.
The strategy should specifically address SME involvement in the CRC through direct or indirect participation and through
involvement in the application of research outputs through commercialisation, technology transfer or utilisation, including where
appropriate the spin-off of new SME companies. Milestones should be identified as a basis for performance monitoring.
Education and training
5 The proposed CRC has a well developed graduate education and training programme oriented to research user and industry
needs. The education and training programme will demonstrably enhance the employment prospects and the value of the
graduates of the programme in the industry and user environment.
Collaborative arrangements
6 The collaborative arrangements reflect a strong commitment by participants to build links between the research groups and
organisations, and between research groups and user and industry participants. The collaborative arrangements will integrate and
enhance the CRCs research and educational programmes. The proposed CRC is required to address the issue of international
linkages and indicate how proposed linkages would contribute to the objectives of the CRC.
Resources and budget
7 The budgeted resources, cash and in-kind support, including time allocation of key personnel, from all participants clearly
demonstrate their commitment to the CRC and are adequate to support the proposed research and education programmes.
Management structure
8 The proposed CRC has an effective management structure, including financial, operational and research management
arrangements, to ensure that the objectives of the CRC are realised.
Performance evaluation
9 The proposed CRC has a performance monitoring and evaluation strategy appropriate for the internal assessment of research
and education programmes, and for commercialisation, technology transfer or utilisation. The strategy will also meet the
reporting requirements of the Commonwealth.

The CRC Guidelines for Applicants 2002 provide a detailed commentary on these
selection criteria. These run into 11 pages and they are highly prescriptive and, in
effect, introduce a number of “sub-objectives” to the Programme in that they direct
and also constrain a CRC proposal. The term “should” appears in the Guidelines a
total of 97 times.
The format and style of the CRC selection criteria and related documents, reflects the
emergence of a “rules based” system of administration - commonly associated with
the processes of formalisation or bureaucratisation.69 Applicants have every incentive
to an application that satisfies the “rules” – rather than focussing attention on develop-
ing “investment proposals” that will deliver sustainable, economic and social devel-
opment outcomes (The essence of the first objective of the Programme as currently
formulated).

69
“Rules based” systems are contrasted with “choice based” systems. Under choice based systems, action is tied to anticipation
of consequences (outcome), evaluated in terms of prior preference. Rules based systems are based on a logic of appropriateness
and control. See James G March, Martin Schulz, and Xueguang Zhou, The Dynamics of Rules: Change in Written Organisa-
tional Codes (Stanford: Stanford University Press, 2000)

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Evaluation of the CRC Programme 2003

The periodic Reviews undertaken in the context of the administration of the CRC
Programme are also set against the selection criteria. These documents are, in turn,
highly prescriptive as to process, procedure and matters to be addressed.
The relationship between objectives and selection criteria is addressed in Part II. At
this stage, it is sufficient to emphasise that the selection criteria be simplified with a
view to ensuring that CRC proposals are directed towards achieving the outcomes of
the Programme.
Recommendation
I - 6. The CRC Selection Criteria be revised and simplified with a view to
being less prescriptive and more focussed on the way in which a pro-
posal will deliver outcomes in relation to the Programme’s mission
and objectives.

10.4 Assessment process

The selection process is conducted in three stages with applications being assessed
against the CRC Programme objectives and selection criteria. The CRC Committee
makes recommendations to the Minister at each stage of the process as to which
application will proceed to the next stage.
The CRC Committee bases its advice on the applications submitted and on advice
received from the two Expert Panels. The Minister will make the final decision at
each stage. The stages of the selection process are detailed in Figure 7.
Figure 7: CRC Application Assessment and Selection Process
Stage 1 - eligibility
The Expert Panels and CRC Committee will evaluate applications received by the closing date against the CRC Programme
objectives and selection criteria. The Committee will make a recommendation to the Minister as to which applications should and
should not proceed to stage 2 (short listing). Following a decision by the Minister, the Chair of the CRC Committee will formally
notify the unsuccessful applicants.
Stage 2 - short listing
For those applications proceeding to the second stage, assessment reports will be obtained from referees nominated by the
applicants, and independent assessors nominated by the Expert Panels or Committee. The Expert Panel will make an evaluation
of the comments provided by the referees and assessors against each application and advise the CRC Committee. The CRC
Committee will make a recommendation to the Minister as to which applications should and should not proceed to stage 3
(interview). Following a decision by the Minister, the Chair of the CRC Committee will formally notify the unsuccessful
applicants.
Stage 3 - interview
An interview will be conducted with those applications proceeding to the third stage. The interview will discuss the application
in more detail and address specific issues identified by the Expert Panels. Each interview panel will consist of the chair and/or
co-chair of the relevant Expert Panel, one or more members of the life sciences or physical sciences and engineering panel and in
some cases an independent expert.
The CRC Committee advises the Minister on which applications are suitable for funding, as well as the recommended funding.
The Minister considers the Committee’s advice and decides which applications should be funded.
The Minister formally announces successful applications and the funding offered.

Under current arrangements all applications that meet the selection criteria go forward
for detailed assessment by the Expert Panels. This is because applicants ensure that
they cover off on the identified selection criteria. However, a major effort is required
by applicants to make their proposals look “competitive”. There is now a high level
of risk in committing a substantial level of resources to preparing a bid with no
knowledge of the size of the field or indication of likely success.
The DSTO submitted that the CRC model is only practical where there is a strong
degree of certainty about whether proposed CRC bids would be successful and where
the establishment timeframe is not prohibitive. The Organisation commented:

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Evaluation of the CRC Programme 2003

Given the long lead time (measured in years) for preparing a CRC bid - of getting
support for the CRC concept and encouraging relevant participants - an enormous
amount of effort is effectively wasted when these CRC bids are not successful. This
timeframe is even longer if the bid participants then wait to submit their proposed
CRC to the next round; as well as the lost opportunity of alternate options not being
pursued in the meantime.70

Should greater certainty in the CRC selection process be provided, DSTO indicated
that it would also consider a much more active role as a driver of new CRC proposals
with an emphasis on future national research priorities.
These matters can be addressed through the introduction of a two-stage application
procedure as is adopted in many other Commonwealth programmes. A two-stage
process would involve:
Submission of a Preliminary Proposal in response to a general and public
“Request for Proposals”
Submission of Full Proposals – following an invitation based on an assessment
of the Preliminary Proposal.
A Preliminary Proposal would contain an outline and summary of the research, briefly
but clearly stating objectives, methodology and potential national and industry
benefits, budget details and the extent of end-user involvement and commitment.
Preliminary Proposals would be assessed against formal (but abbreviated) selection
criteria, national and industrial research priorities, the extent of potential national and
industry benefits and the resources available within the Programme.
Full Proposals would provide more detail in relation to linkages and contacts with
industry, personnel and other resources to be committed, detailed budget estimates
and projections, a realistic assessment of outcomes and a strategy for implementation.
In this respect the Full Proposal would represent an “investment proposal”. Sugges-
tions for a change in emphasis in the Programme towards this end are canvassed in
Part II.
Recommendation
I - 7. CRC Applications be submitted and assessed in a two stage process:
A Preliminary Proposal outlining the research, objectives and poten-
tial benefits; a Full Proposal would be invited following Committee
assessment of the Preliminary Proposal

10.5 Funding arrangements

CRCs receive funds from several sources:
Programme funds.
Universities.
CSIRO and other publicly funded research organisations.
Businesses and industry associations.
State Government.

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Funding is received either directly as cash or as “in kind”, represented mainly by the
time of research staff from universities, the CSIRO and businesses.
According to the Guidelines for Applicants, 2002 the amount of CRC Programme
funding provided to CRCs amounts, on average, to about one quarter of the total
funding. The CRC Committee examines the proposed “leverage” of the Programme
funding sought in the application, expressed as the ratio of the total contributed
resources budgeted for the proposed CRC to the Programme funding sought from the
Commonwealth. The Guidelines state:
The provision of an appropriate and adequate amount of cash is regarded as highly
desirable, as it increases the flexibility available to the CRC governing board to op-
timise its resource allocation decisions. The cash available per full time equivalent
researcher is seen as a useful indicator in this regard.

The overall industry commitment to the CRC Programme has grown with successive
selection rounds. The Committee indicated in the 2002 round that it expected indus-
try’s commitment would continue to increase, particularly for the larger and estab-
lished industries, and those industries which have a long standing association with the
programme.
In an endeavour to build leverage CRC Proposals are tending to include a larger
number of industry partners. This, in turn raises questions about the effectiveness of
participation – quite apart from the management difficulties involved in a joint
venture with multiple partners. However, a wide scope of industry partners allows
SMEs to become involved. Many CRCs have encouraged SME involvement through
a “collegiate” arrangement.

10.6 Monitoring and oversight

The accountability framework that the CRCs impose on all parties is extremely tight,
but open and transparent. This is important when bringing together a range of organi-
sations, particularly for those who are making cash contributions, to ensure appropri-
ate reporting and to ensure high quality science is provided.
That said, an over-riding principle is that as CRCs have been established as a form of
“non-government organisation”, carrying out responsibilities for industrial research
on a devolved basis, they should be entrusted to undertake the tasks that have been
agreed in contracts and agreements without detailed oversight. Accountability should
be on the basis of reporting against milestones and achievements. Essentially, the
Boards of the entities should be responsible for ensuring accountability in day-to-day
management and operations.
The limiting factor in this area has been the uncertain structure and status of the “CRC
entity” in a joint venture environment. This issue is addressed at some length in Part
II

10.6.1 Reporting
There is strong support within the CRC system for accountability for the expenditure
of public funding. The scope, coverage and intensity of that framework was raised as
an issue during the Evaluation.

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As the major recipients of Commonwealth funding for teaching and research, univer-
sities are highly geared to respond to Government’s accountability requirements.
However, they view the accountability requirements for the CRC Programme as
particularly demanding, especially when compared with other Commonwealth
research programmes, such as those administered by the ARC and the NHMRC.71
The accountability framework for the CRC Programme involves five separate ele-
ments:
An annual Management Data Questionnaire.
A second year review.
A fifth year review.
An annual report.
There is substantial benefit to the Centres themselves in complying with these ac-
countability requirements, but there is scope for rationalisation. As the system
currently operates, there is a very heavy reporting requirement, which research
providers particularly see as burdensome and bureaucratic.
It is essential that a reporting and monitoring system:
Demonstrate an appropriate level of accountability for a large amount of public
funds.
Allow the Department of Education, Science and Training to assess the progress
of the CRC in terms of its performance against plan.
Identify problems and provide guidance if appropriate or termination of fund-
ing.
Perform these functions efficiently with only that level of reporting deemed
necessary.

10.6.2 Ongoing monitoring and review processes

Quarterly and annual financial reports

Many CRC Managers claimed in consultations that, for a relatively small organisation
the level of financial reporting required is excessively onerous – and more appropriate
to larger businesses operating in a corporate environment. At the same time, organi-
sations that are receiving taxpayer funded assistance and support should recognise
that there is a basic level of accountability that needs to be met.
CRCs with accounting and financial reporting systems that meet their own manage-
ment and financial reporting needs should have no difficulty in meeting the reporting
requirements for the Department of Education, Science and Training.

Management Data Questionnaire

As would be apparent from previous sections of this Report, the Management Data
Questionnaire (MDQ) provides a great deal of useful information about CRC proc-

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esses and outputs. The MDQ does not, and cannot, provide information in relation to
outcomes. However, aggregate and individual reporting of the information can
provide useful information about the progress being made towards the achievement of
those outcomes
The data generated by the questionnaire provides an important and useful time series
of information about CRC activity and performance. However, there needs to be a
better system for extracting information from the database and reporting the content
of that information back to CRCs. Publication of information will quickly ensure that
CRCs who have been remiss in completing returns make certain that accurate infor-
mation is included.
In general, CRCs should not have a major problem with providing the data for inclu-
sion in the MDQ. The information provided should be part of a standard set of
management information reported to Boards. They were, however, particularly
interested in seeing the information in aggregate and in comparison to other CRCs.
More information about CRC performance among CRC participants, Boards and
managers will improve knowledge about the Programme’s operations and inspire
greater confidence in the way in which CRCs are working towards creating outcomes.
Recommendation
I - 8. The Management Data Questionnaire be continued as an annual
report to the Department of Education, Science and Training and be
expanded to capture, where appropriate, the outcome indicators iden-
tified in the “Performance Monitoring Framework” prepared during
this Evaluation; information obtained from the Questionnaire be re-
ported back to CRCs on a regular basis

Second and Fifth Years Reviews

CRCs have commented that it takes most of the first year to really get things working
because, although discussions will normally have been held between the main players
in developing the application, the investment will not be large until the outcome of the
application is known.
It has been suggested that the first review should not take place until at least the end
of the third year. As the main purpose of a CRC is to undertake research, not much
will usually be achieved until after the first year. There seems little point in putting
much effort into simply evaluating systems and procedures.
The Fifth Year Review provides a focus on the commercialisation outcomes of the
CRC. In the context of CRC expectations, commercialisation should be considered at
the outset if the CRC is to maximize impact from its research.
The Evaluation Team considers that the scope and coverage of much of the present
Review Activity should properly be the responsibility of the Boards of CRCs. The
Reports of the Second and Fifth Year Reviews follow a relatively standard pro-forma
and are of little value, or interest, to an external user. The process of Review might
well provide a benefit to the CRC. To that extent, it should be the responsibility of
the CRC to initiate and implement process improvement.

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To the extent that CRC Boards are established to be responsible and “accountable for
the management of the CRC and setting overall policies, research directions, for
utilisation, technology transfer, commercialisation and budgets and for overseeing the
executive”72 it makes little sense to set a condition on this responsibility by require-
ments for Second and Fifth Year Reviews as they are currently designed. This should
be the responsibility of Boards.
Consistent with principles of responsible corporate governance, Boards should,
however, be required to undertake regular, independent Performance Audits, publish
the results of those Audits, and act on the recommendations. Those Audits should be
undertaken every three years. Performance Audits should provide an attestation that
the decision making processes and procedures that are in place will enable the deliv-
ery of the planned outcomes of the CRC. This issue is addressed again in Part II.

Annual Reports
Each CRC produces an Annual Report. There are specific guidelines for their prepa-
ration and production.
The Reports cross a spectrum from publicity and promotional documents to serious
attempts to meet accountability requirements. There is, therefore, no consistency in
reporting for specific measurement purposes in the Annual Report documents.
The findings from a content analysis of 2001-02 Annual Reports indicated that73:
Most reports don’t specify which authors of publications are CRC researchers
and some don’t even clearly state which publications are peer reviewed.
Most don’t clearly list number of licenses and patents and sales. The same
applies to commercialisation agreements and contracts and there is a wide vari-
ety of interpretation as to what constitutes a “commercial agreement”.
A lot of the reports do not state who funds the PhD and Masters students.
Many of the financials were also difficult to decipher for specific measures and
in some cases it was difficult to identify possible double counting.
It is difficult to determine which collaborations were ongoing and which had
been completed.
A lot of the performance indicators ended up being subjective because most of
the required responses were not clearly stated in the reports.
From a communication perspective, many of the reports required a degree of industry
knowledge to be able to interpret what was said. In the event that the report was only
aimed at the CRC stakeholders, this would be acceptable. However if the report were
aimed at a broader target audience, such as financial investors, then the documents
would need to better communicate their messages.
CRCs should address the form and content of Annual Reports from a communication
perspective.

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Australia. AusIndustry, CRC Guidelines for Applicants 2002 Selection Round and General Principles of Centre Operations
73
The content analysis was undertaken for the Evaluation Team by the Australian Institute for Commercialisation.

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Commercialisation Plans
For Round 8 the Department of Education, Science and Training introduced a re-
quirement that CRCs prepare commercialisation plans. This will encourage a focus on
commercialisation from the CRCs at commencement. These plans should, however,
be incorporated into the research project plans and should encourage end user in-
volvement in the research and the associated commercialisation.
Commercialisation plans that are developed separately from the underlying research
are considered to be little assistance. Industry-led CRCs focus on commercial out-
comes from commencement and build this focus into their research and development
programmes.
To the extent that CRC applications are based on an investment proposal basis, as
suggested elsewhere in this Report, the integration of commercialisation and research
plans will automatically follow. The specific details of commercialisation opportuni-
ties will evolve in the context of the research programme.
Recommendation
I - 9. The Annual Report, Second Year Review and Fifth Year Review
processes be integrated into a single reporting process that focuses
on assessing the achievements of the CRC against credible mile-
stones agreed in the selection process and in CRC operational plans.
CRCs continue to be required to report quarterly on income and ex-
penditure against budget; Boards be required to commission regular
Performance Audits at least every three years; the results of those
Audits be published.

10.7 The role of the Visitor

The role and function of the Visitor has been discussed at length during the Evalua-
tion. From the Commonwealth’s perspective, the Visitor can perform a useful role
immediately following the establishment of the CRC from a “pastoral” or mentoring
perspective, but beyond that there is little value. There is, however, a substantial
administrative cost.
During discussions and consultations the Evaluation Team met with Visitors who had
quite divergent views about their role and function. In a number of cases, Visitors
had no clear idea about what their function was.
The Evaluation Team has concluded that Visitors can and do perform a useful role
where the role is defined – either by the CRC or the Visitor. But they are not part of
the Commonwealth accountability stream. Without a Commonwealth prescription,
that role is best determined by the CRC.
Recommendation
I - 10. The Boards of individual CRCs decide whether a Visitor be ap-
pointed and the time frame for the appointment. The cost of the Visi-
tor appointment should be met by the CRC

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11: Emerging Issues

The CRC system is now larger, more complex, has more players and a greater rich-
ness of interactions between the various players. Moreover, the capabilities of the
players have increased. There is now a much more sophisticated understanding of the
relationship between research and innovation. This provides both opportunities and
challenges.
There are, however, many constraints that need to be overcome to realise the potential
of the CRC system as it moves forward. Some of these are canvassed below.

11.1 Managing a long term commitment

Universities and businesses are not well prepared for long-term commitments. During
a seven year time frame it is almost certain that there will be significant change. The
term is beyond the tenure of most Deans, Heads of Department and Corporate R&D
Managers. Small businesses and non-government organisations are also not in a
position to commit to long-term programmes.
New Deans of Faculty find themselves carrying the decisions of past Deans. Some
expect university staff to commit no more than 50 percent of time to CRCs, and the
rest to other university duties and review them accordingly. Research leaders in
industry or whole groups are often made redundant.
CEOs in CRCs don’t always serve seven years and many work substantially less than
this creating challenges in the management of ongoing relationships with participants.
CRCs also have industrial relations issues and exposures to deal with. Students in
CRCs have reasonable expectations of completing their PhDs in the minimum time of
three years.
A number of difficulties also arise in relation to the management of very large re-
search programmes, particularly where financial arrangements are established through
a formal Centre Agreement involving multiple parties. These include
Management of a large team of staff within a university human resources
framework can be problematic, including significant industrial exposure
Financial exposure to severance payments, salary commitments.
The seven year funding commitment, with potential for extension, is seen by universi-
ties as a major strength of the system in that it recognises the long-term view that
needs to be taken in many research areas. The downside however is being locked into
lengthy engagements in circumstances where their own research priorities, personnel
and finances may fluctuate.
Though accepting the need for continuity and long-term commitment in areas such as
medical/clinical research potential participants in industries that are managed on a
global basis do not like long term lock-in even if it includes a one-year notice of exit.
Head office priorities change with changes in market situations and strategic direc-
tions and corporations want simpler terms of entry and exit in working in collabora-
tions.

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11.2 Managing participants

CRCs vary considerably in the number of participants. There has been an increasing
tendency for more recent CRC applications to involve a greater number of smaller
partners, with the effect that in some cases no single partner is sufficiently large to
have real “ownership” of the research programme; the effect is that some CRCs
effectively sub-contract out smaller research programmes to the providers rather than
developing a strong research collaboration (referred to as the “mini-ARC” effect).
This potentially works against a focus on tackling larger, long-term research projects
on a collaborative basis.
Where CRCs have multiple partners from a wide and complex range of institutions,
there may be no de facto responsibility for the operation of the CRC; some CRCs
have so many partners that each partner’s equity is below 10 percent. Some CRCs
have clearly tried to engage too many research providers and end up by offering very
poor returns. There has to be a balance between assembling an appropriate skill base,
maintaining cohesion in the CRC, and offering an appropriate level of returns to all
partners.
The practicalities of managing a large team of participants and researchers need to
be investigated during the selection process. Evidence of prior collaboration between
parties should be sought.

11.3 Resource challenges

The central element of the CRC Programme is to bring together industry, research
agencies and universities. These players have had to show their commitment to the
work of the CRC they support by bringing resources to the table. There are increasing
pressures on the capacity to commit those resources. Internal contestability within
research and business organisations can also make it difficult to free up funds for
strategic external collaborative activities that depend on successful participation in
other competitive processes.
Each CRC requires a significant commitment to management and administration,
including membership of Boards, committees and involvement in periodic reviews
and reporting. They require real, ongoing and long-term commitment of resources
(personnel, space, laboratories, infrastructure). In some States, audit and public
accountability legislation has made it difficult to devolve responsibilities to CRCs.
From the perspective of many universities, high cash commitments to CRCs consume
resources that would otherwise provide support for a diversity of research pro-
grammes. As result, some universities are complaining of CRC-fatigue, and claim that
they already have reached a limit in terms of the number of CRCs they can support,
despite the presence of quality researchers who could join a CRC’s research pro-
gramme.
There is clearly a limit to which organisations can continue to provide funds to
become eligible for a CRC. This is especially the case when research agencies
respond to other government policies, such as those that require them to develop
strategies to focus their research into long term programmes directed towards national
priorities.

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In consultations, both research providers (the CSIRO and other public research
organisations, universities) and research users (major corporations and government
agriculture and natural resource management agencies) pointed to far tighter budgets
and finances, with the result that there is considerably less “slack” in their systems.
All report having to do more with fewer resources than a decade ago.
Moreover, the large research-intensive universities with involvement in up to 20
CRCs have hinted that they are now reaching a limit. Universities are being called
upon to act as a “research funder” in CRCs in that most CRC proposals have sought
significant amounts of cash. They believe they are now more cash “funders” than
“receivers” in CRCs and in future would want and expect research users (industry) to
do more by way of cash support. This is despite the benefit of CRC research income
boosting the research block grant by 30-40c in the $ that a university gets from its
involvement in a CRC.
Research users are also looking at opportunity costs and choosing between using
limited resources internally, funding R&D in the public sector on a bi-lateral contract
basis (without the CRC “compliance or bureaucracy” burden) or continuing to par-
ticipate in CRCs at more of a “watching brief” level of investment in a CRC. The
complexity of engagement (and disengagement) is becoming too costly. That is, the
benefit of being involved in a CRC and in leveraging public sector resources is being
assessed against the costs. In this vein, major industry participants in past CRCs have
indicated that they will be more selective and strategic in their future involvement.
Some have decided if it is possible to collaborate on a bi-lateral level with a research
provider they will avoid a CRC.
These considerations suggest that there might be a case for fewer CRCs, with more
resources available to each, and a stronger strategic focus among the joint venture
partners.

11.4 Researcher commitment and loyalty

In committing staff to a CRC a void is left for other activities in the university. While
there may be overlap between CRC and university activities, there will be a substan-
tial amount of time when a CRC researcher is not available for university activities,
including Departmental research programmes.
The problem arises on account of the “fractional” involvement of staff in a CRC and
determining the balance between effective and token participation; fractional assign-
ment also creates tensions in loyalties and lines of responsibility for staff who are
employees of a university with a significant involvement within a CRC.
As many CRCs rely for their research activity on the pooled efforts of individual
researchers or groups of researchers working in their parent organisations, the loyalty
of these researchers becomes essentially split:
Is it to the CRC or is it to the parent organisation or a combination of both?
How are successes publicised and which organisation takes credit?
This aspect has proven to be a major hurdle to good cooperation in many CRCs and
steps towards its resolution should be an important consideration in the selection and
review processes.

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Evaluation of the CRC Programme 2003

Researchers are strongly influenced by the promotions policies of their home organi-
sations and the issue of appropriate recognition of success needs to be addressed at the
national level. For example, some UK universities are quite explicit in considering
contributions to the success of cooperative research ventures with the private sector
(i.e. analogues of CRCs) in promotions to higher academic ranks.

11.5 Safeguarding the interests of research students

At least part of the research effort for a researcher attached to a CRC is directed or
aligned with the priorities of the CRC. These priorities may change over time imply-
ing that sometimes “interesting” academic aspects of research programmes may not
be fully explored; programmes may be terminated, suspended or interrupted if the
priorities of the CRC change; universities have a real potential exposure if resources
(including staff) dedicated to CRC programmes are suddenly no longer required.
Moreover, training of higher degree research students is an important part of the
charter of the CRC system. Yet many CRCs experience difficulties in changing the
direction of CRC research projects when, from a commercial sense, they are judged to
lack promise, but there are PhD students working on them. Because the average
length of candidature of PhD students is four years, mechanisms are required to allow
change in research direction without imperilling students’ candidature.
One method that has been successfully used by some CRCs is to guarantee students
funding of at least the level of an APA for the whole of their candidature, even though
they may receive above-APA funding when they commence and whilst their project
remains on the critical research agenda of the CRC.
Associated with any shift to APA-level funding could be a change in the ownership
policy for intellectual property, with the CRC giving up its rights to ownership of IP
once a project is no longer considered commercially important to the CRC.
There is an attitude amongst the private sector partners in some CRCs that appointing
significant numbers of PhD students unduly constrains the flexibility of the CRC to
change research direction and believes that the CRC system needs to develop guide-
lines for new CRCs that overcome this attitude.
Faced with difficulties in recruiting high quality Australian PhD students, some CRCs
have extensively hired international research students and have paid universities the
international student fee, the students a stipend and have provided infrastructure costs
to support the research. This considerably increases the costs of supporting a PhD and
limits their numbers.
Whilst recognising that international research students do confer breadth on a research
group, there is a concern that too high a proportion of students from overseas, who are
obliged to leave Australia at the end of their candidatures, will constrain the pipeline
of students into Australian industry. It is important for the CRC system and PhD
programmes within CRCs that research training should include some business aspects
to make such PhD programmes attractive to local students.

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12: Conclusion

There is now greater corporate/industry and institutional volatility than in the early
1990s. All six industry sectors under which CRCs have been classified experience
ongoing business cycles and volatility – mergers/acquisitions, global industry fluctua-
tions and currency shifts. Commitment to seven-year business plans is relatively rare,
so signing commitments that far in advance is unattractive. Some industries tradition-
ally have not contracted industrial research in this way.
Nonetheless, the availability of a seven-year research programme is attractive to many
large businesses, but more particularly to public enterprises and government depart-
ments and agencies. That said, there are arguments for both long term CRCs in some
areas (application of scientific discoveries in a health services/medical environment
for example) and shorter more flexible arrangements in others (such as in emerging
technologies and industries).
The CRC system has delivered some impressive achievements in many areas. This
includes the creation of effective research consortia in mining and energy, the growth
of capacity in natural resource management, the training of researchers in natural
resource management and the environment who are in a position to contribute to the
resolution of Australia’s serious natural capital problems and the creation of busi-
nesses in medical devices and technologies.
In the area of agriculture, the environment, water, mining and intelligent manufactur-
ing, the CRC Programme has made a major contribution to “matching the technology
push provided by [Australia’s] strong research base with the demand pull of industry
and other research users”. In the emerging areas of information and communication
technologies, biotechnology and medical devices, the model has been successful when
used effectively for development of new business models taken up by existing busi-
nesses or involving the creation of new businesses. There is strong industry concern
about the commitment to commercialisation in this sector.
Going forward, the CRC Programme would benefit from a stronger emphasis on
CRCs managing towards outcomes and a focus on new business development.
Individual centres should concentrate much more on the outcomes achieved and on
their effective use of research management processes designed to achieve successful
outcomes. Such a concentration would no doubt contribute to closing the gap in
perceptions of success between research providers and users.

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Part II: A Focus on the Future: The CRC Programme

within the Broader Science and Innovation System

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1: Introduction

The Terms of Reference for the Evaluation required consideration of the following
questions:
The appropriateness of the objectives in light of developments in related Australian programmes and
policies, developments in related overseas programmes and policies, and current understanding of the
nature of industrial innovation:
Do the objectives, including the balance between them, provide the basis for an effective CRC
Programme over the medium and longer term, taking account of developments in:
- Related programmes including those implemented under Backing Australia's
Ability (eg, Centres of Excellence, ARC research programmes).
- Taking account of any preliminary results of the mapping of Australia’s science
and innovation activities across the public and private sectors to be undertaken
by the Commonwealth.
- Policy on research and innovation, including National Research Priorities.
- developments in the research ‘culture’ in universities and public sector research
agencies.
- Structural aspects of Australian industry.
- Technological and industrial trends?
Does the mix of economic and social objectives for the Programme remain appropriate?
Are there overseas programmes and policies that provide a basis for changes to CRC Programme
objectives?

These matters are addressed in the first three sections of this Part of the Report in
terms of a “strategic assessment” that covers:
The industrial research environment of the CRC Programme in terms of the
changing institutional framework for public-private collaboration and the com-
mercialisation of publicly funded research.
Related policies and programmes to promote public-private research collabora-
tion.
The implications and impact of these developments on the CRC System.
This analysis is followed by an assessment of the clarity and appropriateness of the
current CRC objectives and recommendations for change and adjustment. A mission
(statement of purpose) and revised statement of objectives for the Programme is
recommended. This is followed by suggested changes to:
Selection criteria and procedures.
Revised Programme management arrangements.
Funding arrangements.
The accountability framework.

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2: The Changing Institutional Framework for

Cooperative and Collaborative Industrial Research

The present operational context of the CRC Programme is significantly different to

the circumstances prevailing at the inception of the Programme in 1990 and the
announcement of the first CRCs in 1991. In this Section of the Report a number of
issues that relate to the positioning of the CRC Programme in the contemporary
landscape of cooperative and collaborative industrial research are identified and
discussed.

2.1 Introduction
The economic and institutional framework that has evolved over the 12 years since
the CRC Programme commenced has placed international competitiveness as a top
order priority. This has impacted heavily on all industries, and the businesses that
make up those industries, particularly in regards to their plans and strategies for
industrial research and innovation. This is reflected in
Changed business planning horizons, faster product development cycles
Wider choices in industrial research alliances and in the location of industrial
research facilities/infrastructure
Major structural changes in a number of industry sectors
Changed national/international business regimes, regulatory controls, capital
market downturns, and national security.
In addition, national public policy in the area of science and innovation, and the
policies of universities and public research organisations has placed an emphasis on
the commercialisation of the results of publicly funded research. There are also high
expectations from State governments in this area.
Approaches to industrial research also need to be seen in the context of the adoption
of contemporary management practices and a commitment by Boards and CEOs to
superior business performance and the maximisation of shareholder value.
High performance companies tend to be organisational activists and more likely to be
innovating in the areas of structure, process and boundaries. They do more outsourc-
ing, more downsizing, more operational and strategic decentralisation, and deploy
more special project teams74. They are also characterised by denser and more inclu-
sive webs of relationships with organisations outside their corporate boundaries. Such
factors have altered the way companies pursue industrial research and innovation
when working with public sector research providers.
In general, there is now a far higher consciousness of the importance of collaboration,
networks, alliances, regional economic clusters, and the trading of complementary
assets in intellectual capital as models and frameworks for research-led pursuit of

74
William G Dauphinais, Grady Means, and Colin Price, Wisdom of the CEO: 29 Global Leaders Tackle Today's Most Pressing
Business Problems (New York: Wiley, 2000)

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Evaluation of the CRC Programme 2003

innovation. These models are internationally recognised as essential contributors to

future economic wealth of regions and countries.
Australia’s public policy initiatives and actions in meeting such challenges include
greater funding provided under the Backing Australia’s Ability framework, (eg
benefiting for example both the ARC, NHMRC and targeting support for commer-
cialisation and new enterprise formation). This has led, in turn, to new and generally
expanded opportunities through which businesses can collaborate with public sector
research providers. There remain, however, challenges as to how productive engage-
ment at this public/private sector boundary can be improved further.
In parallel to these initiatives, economic and financial pressures have also engendered
challenges to traditional organisational structures, academic research and educational
behaviours, cultures and reward systems. These have impacted on individuals,
groups/teams, institutions and major public sector industrial research providers,
particularly in universities and the CSIRO.
There have been initiatives to focus Australia’s public sector resources in defined
areas of national research priorities in order to better position Australia against other
competitive, knowledge-driven economies and to address security and environmental
challenges.

2.2 Innovation pathways: between the “community of science” and the

“application of knowledge”
As indicated in Part I, there is also a growing recognition that there are different
innovation processes, or pathways to adoption in different industry sectors and
components of sectors - from the processes of knowledge creation, as discovery and
invention, to the processes of application and use, in a product, process or service that
meets a customer need. In some industries aspects of the process are combined or
they are skipped or omitted. In others there is a reverse dynamic as science is used to
test, explain and enhance the characteristics and performance of products already in
the market.
The main differences in commercialisation between industry sectors arise because of
differences in the drivers of the innovation process along innovation pathways. It is
possible to classify pathways into three categories.75
Innovation based on shifts in scientific knowledge - science based innovation –
such as in drug discovery in the pharmaceuticals industry: discovery is linked
directly to a product for an uncertain, untested but potentially highly profitable
market. “Discovery” research, using techniques of molecular biology, for exam-
ple, is important in this process. The innovation process pushes product and
market opportunities.
Innovation based on shifts in technical knowledge – applications or engineering
based innovation – such as in plastics, chemicals, automobiles: product devel-
opment is the main driver of innovation arising from commercial and market

75
John H Howard, ARC Research Investment, Innovation Pathways and Support for Commercialisation: A Discussion
(Canberra: 2002)

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considerations. The innovation process pulls through basic research and new
knowledge into technologies to create new and/or enhanced products.
This research relies, however, on the continual generation of new knowledge
through discovery. But discoveries may take many years to become attached
to a commercial application. From this perspective, a high degree of impor-
tance is attached to protecting intellectual property in discoveries.
Innovation based on improvements in market knowledge – a consumer driven
process flowing from greater knowledge of and responsiveness to consumer
tastes and preferences arising from the capacity of technologies to track and
model market segment behaviours (sometimes referred to as “mass customisa-
tion”).
There are no doubt other pathways. But the distinctions are important in terms of
addressing ways in which information about discoveries and technologies is conveyed
to, and taken up by, industry “receptors” along the innovation pathway. The orienta-
tion of research, education, commercialisation and collaboration will be impacted by
the nature of the innovation pathway relevant to that CRC.
The growing role of universities in the performance of basic research for industry has
been associated with recognition by businesses that more fields of research at univer-
sities now hold out significant promise of generating findings that may be of commer-
cial significance. The connection between university research and commercial tech-
nology appears to be particularly close in biotechnology, a factor that influences the
character of many university-industry research relationships - and may distinguish
them from university-industry research relationships in other fields.76

2.3 Changing strategies for investment in industrial research

At the time of inception the CRC Programme was based on developing a relationship
with university researchers and corporate (industrial) researchers. It reflected a
traditional, “linear flow” model of corporate research with scientists coming up with
interesting ideas and novel concepts and passing them over to production and market-
ing managers. There was, and still is, a view that there are also a lot of interesting
ideas in universities that could be passed over to corporations in this way. However,
the difficultly is taking those ideas to the next step through adaptation, scale up,
production and, most importantly, addressing an end user need.
The traditional model for funding research has been that corporations “taxed” their
business units and used revenues to give to an R&D department or laboratory, as a
“subsidy” to pay for research. Some of this funding found its way to universities to
tap into specific areas of competency and capability and was managed on a collabora-
tive “laboratory based” model. The new knowledge created would be given away for
free. When the R&D department (perhaps in collaboration with a university) came

76
David C Mowery and Richard R Nelson, "The US Corporation and Technical Progress," in The American Corporation Today,
ed. Carl Kaysen (New York: Oxford University Press, 1996).

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Evaluation of the CRC Programme 2003

up with something it gave it back to the company – for free.77 This process was,
however, very expensive and resource intensive. Paul Romer points out that:
The command control – tax, subsidy mechanism is not the perfect solution. While
there are a billion haystacks in which there will be some very valuable needles, it is
very expensive to look under every one. It is also the case that the research effort
gets spread very thinly.

It has become clear to businesses that they cannot just give scientists lots of money
and let them follow their curiosity (although this does not imply that there is no value
to businesses in basic research). But if they do, the “tax subsidy” system dissipates
efforts and does not lead to the highest return to shareholders. As a result, companies
are beginning to create market type mechanisms that impose market tests on research.
Research units are increasingly being set up as profit centres, and in some cases
outsourced or spun-out entirely as separate entities. As a result of these trends, the
model under which businesses enter into open-ended relationships with universities to
undertake collaborative research is being superseded. Similarly, university research
centres are established with a financial return in mind.
Industrial research is increasingly being approached on the basis of a capital expendi-
ture/investment appraisal decision, and on a project-by-project basis, using a “busi-
ness” management model. Internal research divisions now charge different divisions
for any of the results they produce that other divisions use. These divisions are also
being “market tested” against independent research laboratories, including publicly
funded research organisations and universities.
In the corporate environment, research and development capability is no longer
regarded as a critical strategic asset and a barrier to competitive entry in some indus-
tries. Large companies have traditionally done most of the research, including basic
research, in their respective industries – DuPont, Merk, IBM, GE, AT&T. Now, these
companies are finding strong competition from newer companies – Intel, Microsoft,
Sun, Oracle, Cisco, Genentech, Amgen – who do little or no basic research on their
own. They have innovated with the research discoveries of others. Research capabil-
ity is acquired through acquisition of technologies developed in start-up companies.78
An important aspect of industrial innovation is now based on creating start up compa-
nies to develop and market new discoveries and “disruptive” technologies to end-
users. These users may be a final consumer but, more likely, will be an established
corporation further along the industry value chain. These features are apparent in the
life sciences, information or communications industries. The creation of these start-
ups, based on knowledge assets, and little in the way of “complementary assets” such
as buildings, plant and equipment, has been facilitated by the availability of a new
form of risk finance – venture capital. This aspect of industrial innovation explains the
interest in “spin-outs” from CRCs.
The larger corporations that use these technologies in taking new products and
services to market (for example, computer hardware, telecommunications and phar-

77
Joel Kurtzman, "An Interview With Paul Romer," in Thought Leaders: Insights on the Future of Business, ed. Joel Kurtzman
(San Francisco: Jossey Bass, 1998).
78
Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology. (Boston: Harvard
Business School Press, 2003)

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Evaluation of the CRC Programme 2003

maceutical companies) invest less in internal R&D and more in “scouting” and
acquiring technology and start-ups. Alternatively, they can enter into meaningful
strategic alliances with small and medium sized companies whose business model is
to increase the value of the technology/discovery and sell it on fast. More generally,
outside perspectives and competencies flow into and out of organisations through
many routes:
Partnerships with universities.
Alliances and acquisitions.
External venture investments.
Recruiting and hiring.
Customers and suppliers.
Relationships and curiosity of individual employees.
These sources of external influence have played pivotal roles in all aspects of corpo-
rate innovation.79
Many established companies have also found that much of their basic research wasn’t
useful to them. They exited or abandoned projects – only to have them taken up by
start-ups and turned into valuable companies. This form of “open” innovation is
contrasted to “closed” innovation models in the following terms.
Figure 8: Closed vs. Open Innovation
Closed innovation Open innovation
Industries: Agriculture, mining Industries: Information, Communications,
Pharmaceuticals
Largely internal ideas Mainly external ideas
Low labour mobility High labour mobility
Little venture capital Active venture capital
Few, weak start-ups Numerous start-ups
Universities unimportant Universities important
Source: Chesbrough, Henry. Open Innovation: The New Imperative for Creating and Profiting from Technology. Boston:
Harvard Business School Press, 2003.

Within this overall context there appears a broader trend of companies in many
sectors cutting back on their long-term in-house research. This trend increases the
importance of the role played by research organisations with close industry involve-
ment as they build up the ‘R&D corporate knowledge’ of a sector. However, the
trend does not apply to all sectors.
The nature of industrial research in health-related fields is long, expensive, risky and
heavily regulated. The role of IP, and patents in particular, is vital. Because of the
length and cost of the developmental phase, companies need an exclusive right
(through a patent) to recoup these development costs. This makes the idea of having
more than one commercial partner involved in particular projects quite fraught.80 In
contrast the CRC for Photonics has a large number of partners, including SMEs, as

79
John D Wolpert, "Breaking Out of the Innovation Box," Harvard Business Review 80, no. 2 (2002)
80
Consequently, the CRCs for Cellular Growth Factors, Inflammatory Disease, Cochlea Implants, Diagnostics, Discovery of
Genes for Common Human Diseases, and Vaccines, all only have one commercial partner

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Evaluation of the CRC Programme 2003

does the CRC for Cast Metal Manufacturing. The Programme should retain the
flexibility to cover the various needs of all industry sectors.
Emerging industries often have less research and industry infrastructure (and less of a
track record) to draw on than more established areas. Companies are often small and
face difficulties fully engaging with other research organisations and other firms.
This can work against proposals from such sectors in the CRC selection process. A
CRC can have a significant catalytic effect on the growth of such industries and this
potential ought to be given weight in the selection process.

2.4 Changes in the higher education system and orientation of public

research agencies
The unified national system introduced in 1988, together with a continuous flow of
policy changes and constrained public funding, has created a series of management
challenges as well as major opportunities for universities to participate in a broader
and growing market for teaching and research services. The higher education sector
has gone through, and is continuing to adjust to a process of “industrialisation”. The
changes that have occurred are often referred to as an academic “revolution” in the
higher education sector.81 This revolution, which has also occurred in Europe and
North America, shares many of the characteristics of prior processes of industrialisa-
tion.
To many, the “academic revolution” involves the translation of research into new
products and new enterprises together with an increasing reliance by businesses on
knowledge originating in academic institutions.82 Whilst a great deal of the discus-
sion and discourse in the literature on knowledge commodification and knowledge
capitalism is concerned with scientific and technical knowledge, the “academic
revolution” relates as much to the teaching and advisory activities provided by higher
education personnel.
These changes are occurring in a broader context of evolution of the “mode” of
knowledge production. Knowledge creation is becoming increasingly distributed in
the context of the global knowledge economy, with the role of universities changing
from the familiar mode (mode 1) involving generation in disciplinary contexts – to a
system of production that occurs in broader trans-disciplinary contexts and arises in
the process of application and adoption in business, industry and government (mode
2).83 That is, mode 2 knowledge production occurs in many different sites and in
many heterogenous contexts of application.
Universities are unique in this process in that they produce both knowledge and train
future knowledge producers; they contain strategic sites, or home bases, of both
research and science. This feature of the new production of knowledge is a central
feature of the CRC system: CRCs create industry relevant knowledge as well as
training future knowledge producers for industry.

81
An industry is characterised by the existence of producers and consumers, the production of commodities (goods and services)
that have an exchange value.
82
Henry Etzkowitz, Andrew Webster, and Peter Healy, eds., Capitalizing Knowledge: New Intersections Between Industry and
Academia (New York: State University of New York Press, 1998)
83
Gibbons and others, The New Production of Knowledge: The Dynamics of Science and Research in Contemporary Societies

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Evaluation of the CRC Programme 2003

The realisation that university based knowledge is of use to industry has also led to
changes in the rules governing how universities and companies interact with each
other – shifting the relationship from a ‘eleemosynary’ (electing to choose) to a
business basis. The emergence of a business orientation involves not only the produc-
tion of a commodity but also its marketing, as a product, to a customer (that is, an end
user). It has meant that the function of technology transfer within a university envi-
ronment involves much more than registering intellectual property rights; it involves
its “packaging” and active marketing.84
Accordingly, technology transfer has become more complex with a large range of
specialisations involved – IP law, technology marketing, corporate finance and
management. In an industrial context, the concept of technology “transfer” becomes
redundant; technology is produced, packaged and marketed in an exchange transac-
tion. The process might also be “vertically integrated” and managed in an organisa-
tional framework – such as in a CRC. The interaction of market based and managed
relationships is the subject of ongoing research.85

2.5 The emergence of university research centres

The emergence of new forms of knowledge creation has seen the emergence of the
“university research centre” as the organisational and management vehicle.
University Research Centres are generally regarded as flexible, comprehensive
research and education organisations, offering a research climate that focuses on
product development, design testing, as well as the traditional basic research discov-
ery activities. They are also seen as focussing on interdisciplinary research, technol-
ogy transfer, and technical assistance to industry. They are expected to bridge the gap
between academic applied research and the more narrowly focussed technology
activities that hopefully lead to economic development in their own states and the
global economy.86
There are many forms of research centre of which Cooperative Research Centres are a
special category. In Australia, their distinguishing characteristic and feature is the
involvement of government through the provision of funding, on a competitive basis,
as a way of leveraging industry and university research effort and commitment. Apart
from that, they do not reflect any specific research priority or direction. They also
provide, through a seven-year funding arrangement and a legally binding joint venture
agreement an element of stability in an increasingly dynamic and turbulent industry
and academic environment.
The benefits of research centres in industrial research are seen to lie in the following
attributes:
Faculties involved in centres are often more involved in technology transfer.
Centre research staff are advantaged in relationships with industry scientists.

84
See Ron Johnston and John H Howard, "Engagement in An Era of Industrialisation," in TBA (2003).
85
John H Howard, The Industrialization of Higher Education: From Knowledge Creation to Knowledge Production (Forthcom-
ing)
86
William R Tash, "University Research Centers Rising!," Scipolicy 2, no. 1 (2002)

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Evaluation of the CRC Programme 2003

Centres are an important resource for employment for non-tenured scientists and
post doctoral scientists until they find more permanent employment.
They encourage scientists to become more involved in cutting edge technologies
and interdisciplinary research.
There is advantage for students in participating in hands on research and for
later careers in industry.
Cooperative arrangements have, however, been criticised on the grounds that they still
tend to focus on single disciplines87 and that universities and researchers see industry
funding as a way of underwriting their own research programmes and agendas. Some
other problems often raised include:
Weak and/or cumbersome governance arrangements.
Lack of financial support from the host university and other research providers.
Red tape in negotiating agreements and hiring personnel.
Inadequate management support and infrastructure.
Absence of faculty rewards for participation.
Poorly trained centre managers who cannot bridge the gap between the “com-
munity of science” and the commercial drivers in the world of business.
Inappropriate director appointments that lead to obsolescence in research
creativity
Competing demands for research and teaching.
The presence of research centres however is considered to be one of the factors
stimulating the growth of the university sector - but their continued expansion is now
requiring more rather than less university financial support. In this regard it is of
interest that CRCs are heavily concentrated in Australia’s largest research universi-
ties.88 Smaller and regional universities, whilst involved in fewer CRCs tend to make
heavy commitments to agricultural and natural resource management CRCs. During
this Evaluation, all universities raised concerns about the commitment to providing
cash in CRC applications.
Cooperative and collaborative research is projected to become an increasingly signifi-
cant element in the higher education industry and government research activity. The
form and extent of business involvement is evolving as companies move towards a
system of “open innovation” where companies seek to distribute and acquire IP
through licensing arrangements, joint ventures and other arrangements.89
Notwithstanding these beneficial outcomes, there are some concerns as well. These
include the constraints that collaborations with commercial firms bring to freedom to
publish their work, pressures on university research to shorten the time horizon for
their technical vision, and the pressure that commercial financial interest may place

87
Richard Florida, "The Role of the University: Leverage Talent, Not Technology," Issues in Science and Technology (1999)
88
Monash University and the Universities of Adelaide, Melbourne, New South Wales, Queensland and Sydney each participate
in 10 or more CRCs. The University of Queensland participates in 24.
89
For a discussion of this development see in particular: Chesbrough, Open Innovation: The New Imperative for Creating and
Profiting from Technology. and Henry Chesbrough and David J Teece, "Organizing for Innovation: When is Virtual Virtuous?,"
Harvard Business Review 80, no. 2 (2002), Henry Chesbrough, "The Era of Open Innovation," Sloan Management Review 44,
no. 3 (2003)

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Evaluation of the CRC Programme 2003

on faculty duty to colleagues and students. The key to success in university-industry

partnerships is seen to depend on the primary motive of each partner. That is:
If the universities value the partnership as a means of exposing faculty and students
to leading edge technical issues that are driving innovations of benefit to society, and
are not basing their expectations primarily on revenues from patents, a stable, pro-
ductive relationship may endure. If the firms see universities as sources of new ideas
and as windows on the world of science, informing their own technical strategies,
rather than viewing students as a low cost, productive source of near term problem
solving for the firm, they too will be rewarded. Each partner must understand and ac-
cepts the other's priorities. The money and services exchanged should be seen as the
means to broader ends.90

A recent trend has been for large business enterprises to enter into long-term devel-
opmental research agreements with universities that involve “umbrella agreements”
with mechanisms for the selection of specific projects. Proprietary considerations,
principally involving patent rights and rights to publication, tend to be rather detailed
and complex and require formal mechanisms for management and review. The
industry based CRC model, involving multiple participants, is not well suited to this
sort of arrangement.
The most significant barrier that inhibits effective research partnerships relates to
intellectual property concerns and specifically patenting rights. Matters concerned
with intellectual property management are canvassed briefly below.

2.6 Ownership and control of Intellectual Property (IP)

The ownership, control of, access to, and returns from the sale and/or licensing of IP
is a major issue in public-private research partnerships and in the commercialisation
of publicly funded research. It occupies a great deal of the time of corporate lawyers
and taxation accountants in the negotiation of agreements. Much of this negotiation is
premised on the prospect of substantial income and/or capital gains flowing from the
commercial application of IP and how those returns should be distributed.
In the United States the Bayh-Dole University and Small Business Act encouraged
universities to protect the intellectual property created from Federal funds and license
it to the private sector. This initiative has largely been seen as a success. A number
of problems have emerged in the biotech-health sciences area where researchers are
getting too dependent on the provisions of the Act and are “torquing their research”,
keeping their results to themselves and not discussing it with other researchers be-
cause they do not want to do the patent work up front.91 Policy makers are now
seeing a need to get the best out of the Bayh Dole provisions but not impede the
science by keeping it bottled up and not getting an outcome.92.

90
Lewis Branscomb, "Research Partnerships in Public Policy," (United States Congress, House Committee on Science, Task
Force on Science Policy, 2003)
91
United States. Department of Commerce Technology Administration, Innovation in America: University R&D (Washington,
2002).
92
For example, because of the many ways of gene expression, a company may have to license many intellectual properties
making the royalty requirements to universities wipe out any profits. Some patents –eg a gene sequence – create a bottleneck and
anything done beyond that requires a license. Some universities cannot do their work or they have to license a patent to do so.
Thus, the problem with the Bayh Dole provisions is that it is possible to patent essentially the tools of research – gene line, cell
line, a gene, or a way to manipulate the gene. This has worked to hinder biomedical research

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The reality is that most patents are worth very little and it is hard to know in advance
which patents have any value. There is an assumption often made by people tasked
with valuing IP that technology assets have some inherent value independent of any
business model used to employ them. Technologies embedded in IP only have value
when commercialised through a business model.93
Much of the work in managing IP undertaken in a university and public research
organisation context assumes that there is some objective value for a technology
separate from how it is commercialised. The result is that proactive IP management
misses some key issues. Specifically:
Technologies acquire economic value when they are taken to market with an effec-
tive business model. When research discoveries are driven by scientific inquiry and
not connected to any business purpose, the commercial value of the resulting discov-
eries will be serendipitous and unforeseeable. Unsurprisingly, most of these discov-
eries will be worth very little, although a few may be worth a great deal – once they
are connected to the market through some viable business model.94

Within a CRC context, research providers need to be educated about the way in which
research relates to the business models of the research users so that researchers can
understand the potential connections early on in the process. At the same time,
research users become concerned when researchers endeavour to develop business
models that do not fit the models of the participants, or in which participants seen no
economic or commercial merit.
This suggests that in some cases CRCs could be justifiably created without a research
user having an established business model. This may mean that there are no estab-
lished research users willing to participate in the CRC. This will most likely occur
when a CRC is involved in the development of “disruptive” technologies. In such
cases governments acting as “state entrepreneurs” may represent “potential users”.
Venture capital investors may also be involved. This trend is occurring in CRCs
established to develop new businesses in new technology areas.

2.7 The “collaboration continuum”

Collaboration is often seen in terms of a continuum moving from a situation of
“opportunistic” access to funds, through more formal transactional arrangements, to
an integrated and seamless strategic alliance. The features of this continuum are
summarised in Figure 9.
Figure 9: Features of Collaboration Relationships
Opportunistic Transactional Integrative
Nature of the “Gifts” are made to support the Resource exchanges through Missions, people, and activities
relationship “good work” of a research specific activities and formal are more collective and
organisation – based on the agreements in relation to support organisationally integrated – a
reputation, past achievements, provided and research services joint venture that is central to
perceived importance of the that are to be provided. both; strong personal interactions
research and promotional – at director level; processes and
capabilities of the researchers procedures to manage growing
and sponsorship managers. complexity.

93
Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology. p.156.
94
Ibid. p. 161

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Evaluation of the CRC Programme 2003

Opportunistic Transactional Integrative

Collaboration Gratefulness and appreciation Partnering “We” mentality in place of “us”
mindset Minimal collaboration in Increased understanding and vs. “them”.
defining activities. trust.
Separateness.
Strategic Minimal fit required beyond a Overlap in mission and values Broad scope of activities and
alignment shared interest in a particular Shared positioning at top of strategic significance.
issue area. organisation. Relationship as a strategic tool
Shared values.
Collaboration Generic resource transfer Core competency exchange Projects identified and developed
value Unequal exchange of resources. More equal exchange of at all levels in the organisation,
resources. with leadership support.
Projects of limited scope and risk Joint benefit creation; need for
that demonstrate success. value renewal.
Shared-equity investments for
mutual “return”.
Relationship Corporate contact person usually Expanded personal relationships Expanded opportunities for
management in R&D department; university throughout the organisations direct employee involvement in
contact person usually directly Strong personal connection at relationship.
involved in research; corporate leadership level. Deep personal relationships
personnel have minimal personal Emerging infrastructure, across organisations.
connection to cause. including relationship manager Culture of each organisation
Project progress typically and communication channels. influenced by the other.
communicated via written status Explicit performance expecta- Organisational integration and
report. tions. execution, including shared
Minimal performance Informal learning. resources.
expectations. Incentive systems to encourage
partnerships.
Active learning process.
Funding,/financing Grants Conditional, specific purpose Investment
Based on and adapted from James E Austin, The Collaboration Challenge: How Nonprofits Succeed Through Strategic
Alliances. San Francisco: Jossey Bass, 2000, pp.36-37

Relationships move along a “continuum” from the opportunistic to integrative. The

progression is not automatic: it results from conscious acts and efforts. It is also
multifaceted and strategic. Over the last 12 years participants in the CRC Programme
have moved their focus from the “opportunistic” to the “integrative” form of collabo-
ration. This has implications for Programme design, participant involvement and
CRC management.
A critically important issue for the CRC Programme, CRC participant organisations
and CRC management is where they want to be on the continuum on the path to
application and use of research outcomes.

2.8 Conclusion
The institutional framework for public private industrial research collaboration has
undergone a substantial evolution over the last decade – the period in which the CRC
Programme has been operation.
A feature of the evolution is not only the emergence of a greater level of cooperation
and collaboration between research providers and research users but also a focus on
the value of interactions and a growing marketisation of those relationships. With
corporations giving greater attention to market relationships in the management of
their research programmes, and the increasing attention of universities and public
research organisations on the marketing of knowledge assets, university-industry
interactions are increasingly being conducted in a trading relationship.
At the same time, partners in industrial research relationships have been giving
greater attention to the management of their collaborative relationships. Loose,
opportunistic alliances are giving way to more strategic, integrative relationships.

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This has, in turn, raised the need for management skills and capabilities that are
specifically focussed on effective alliance management.
These developments have substantial implications for the future design of the CRC
Programme.

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Evaluation of the CRC Programme 2003

3: Related Policies and Initiatives to Promote Public-

Private Industrial Research Collaboration

The purpose of this Section is to identify and comment on policies and programmes
that relate to linkages between research and application. The Terms of Reference
specifically sought comments in relation to:
The National Research Priorities.
Australian Research Council (ARC) Centres of Excellence, Linkage and
(proposed) Networks.
CSIRO Flagships.
National Health and Medical Research Council (NHMRC) programmes.
Major National Research Facilities (MNRF).
National Industry Action Agendas.
In addition to publicly supported collaborations, there is also a substantial amount of
collaboration between research providers and users that occurs on a bi-lateral basis.

3.1 National Research Priorities

In December 2002 the Prime Minister announced four national research priorities and
their associated priority goals:
An Environmentally Sustainable Australia.
Promoting and Maintaining Good Health.
Frontier Technologies for Building and Transforming Australian Industries.
Safeguarding Australia.
These four areas are intended to provide a vision for research by focusing research
effort on key challenges for Australia currently and into the future.
As indicated in Part I, the currently operating CRCs fit well within the Research
priorities. In particular, the emphasis of the Programme in agriculture and the envi-
ronment has a very strong orientation towards sustainability. Similarly, the health and
medical CRCs are directed towards the “good health” purpose.
Frontier technologies lie behind many of the mining, manufacturing and information
and communication technology CRCs. The involvement of DSTO in several CRCs
also addresses the final goal.

3.2 Centres of Excellence

ARC Centres of Excellence Programme covers research in predominantly emerging,
enabling or platform technologies, where there is wide potential application across
various fields or industries. For Centres with funding commencing in 2003 the
following priority areas were identified as a basis for selection: Nano-Materials and
Bio-Materials; Genome/Phenome Research; Complex/Intelligent Systems (CSI), and
Photon Science and Technology (PST). In addition to centres funded in these catego-
ries, the ARC funds a further 27 centres around Australia

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Evaluation of the CRC Programme 2003

The objectives of the ARC Centres of Excellence program are to:

a) undertake highly innovative research at the forefront of developments within the
designated Priority Areas, with a scale and a focus leading to outstanding interna-
tional and national recognition;
b) promote research that will enhance Australia’s future economic, social and cultural
wellbeing;
c) link existing Australian research strengths and build new capacity for interdiscipli-
nary, collaborative approaches to address the most challenging and significant re-
search problems;
d) build Australia’s human capacity in the Priority Areas by attracting, from within
Australia and abroad, researchers of high international standing as well as the most
promising research students;
e) provide high-quality postgraduate and postdoctoral training environments for the
next generation of researchers in the Priority Areas;
f) offer Australian researchers access to world-class infrastructure and equipment,
and to key research technologies;
g) develop relationships and build new networks with major international centres and
research programs that help achieve global competitiveness and recognition for Aus-
tralian research;
h) establish Centres of such repute in the wider community that they will serve as
points of interaction among higher education institutions, Governments, industry and
the private sector generally; and
i) raise awareness of the designated Priority Areas in Australia, particularly their im-
portance in innovation and international competitiveness.

Cross referencing CRC objectives, selection criteria and general attributes with those
of the Centres of Excellence Programme indicates that whilst the programmes have
significant operational similarity, they also have important points of strategic differ-
ence. These are summarised in Figure 10.
Figure 10: Comparing the CRC Programme with the ARC Centres of Excellence
CRC Programme Centres of Excellence Programme
Scope Researchers and proposals from all the physical and The ARC Centres of Excellence are presently
biological sciences and hence there are CRCs that confined to four priority areas of research
cover different industry sectors. All CRCs must
pursue some form of industry uptake of their
research.
Engagement Researchers jointly commit over seven years to Engagement with industry collaborators in ARC
with industry support the CRC, providing resources (both cash and Centres of Excellence is not mandatory.
in-kind) that match or exceed the Commonwealth’s
cash funding
Research CRCs have an expectation and a performance Although “likely to make discoveries that have the
outcomes requirement to transfer research outputs into potential for development to the point of commercial
commercial or other outcomes of economic, application”, there is no expectation in the short or
environmental or social benefit. mid-term. They would not necessarily seek input
from industry nor have industry partners involved in
the Centre Management unless of their own
choosing.
Research focus CRCs are required to pursue research excellence in a Focus is on more long-term curiosity or discovery
wider portfolio based manner, with both short-term based research areas.
and longer-term projects, with part of their R&D
portfolio industry led or aligned.
Scope CRCs support and fund medical science and ARC does not fund this area and cooperatively
technology related research. manages a divide with the NHMRC in pursuit of
such research.

Other than these major and important distinctions, as well as those of scale and scope
and resources, the two Programmes support similar areas of research.

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Evaluation of the CRC Programme 2003

Under funding from Backing Australia’s Ability National Centres of Excellence have
been established in information and communications technologies and biotechnology–
The ICT Centre of Excellence: National ICT Australia (NICTA)
Biotechnology Centre of Excellence: National Stem Cell Centre)
The Australian Centre for Plant Functional Genomics.
The National Food Industry Council, funded under the Food Industry Action Agenda,
agreed in 2002 to the establishment of two food centres of excellence in:
Food Safety and Integrity
Human Health Functionality of Foods.
There are potentially strong and close relationships between Centres of Excellence
and CRCs insofar as the CRC Programme has a focus on the commercialisation of
research and building links with industry and technology investors.

3.3 ARC Linkage programmes

ARC linkage95 includes programmes designed to foster industry collaboration. The
programmes support collaborative projects between higher education researchers and
industry and must contain an industry contribution. The interaction with users of
research outcomes is a critical element.
The key objectives from an industry collaboration perspective are to:
Encourage and develop long-term strategic research alliances between higher
education institutions and industry in order to apply advanced knowledge to
problems and/or to provide opportunities to obtain national economic, social or
cultural benefits.
Foster opportunities for postdoctoral researchers to pursue internationally
competitive research in collaboration with industry, targeting those who have
demonstrated a clear commitment to high-quality research.
Provide industry-oriented research training to prepare high-calibre postgraduate
research students.
The research may span from pure basic, to strategic basic to applied research. Funding
support is on a project basis and supports people development at various stages of
their career plus project maintenance, equipment and travel. There are controls of
overlaps in funding of CRC activities.
The distinguishing features between the CRC Programme and the Linkage Programme
are primarily:
Purpose – Linkage is project based, typically on a bilateral not a multiparty
basis, and has considerable focus on people development.
Scale and duration of funding – Linkage funding is for a one to five year project
with an industry partner who must contribute cash and in-kind to match ARC
funding $ for $; the minimum grant size is $20,000 per annum and the maxi-
mum is $500,000 per annum.

95
See http://www.arc.gov.au/grant_programs/linkage_projects.htm

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In the view of some, the more simple bilateral nature of the linkage programme elimi-
nates the complexity of working in a multiparty agreement in a CRC context.
In 2002, a total of 736 industry partners from around Australia contributed investment
to research under Linkage projects. The ARC 2002 investment of $78.2 million in
Linkage project grants and awards attracted $120.2 million in matching contributions,
in cash and in-kind, from industry project partners. In the same year, the ARC
awarded 397 postgraduate scholarships and 32 postdoctoral fellowships to researchers
seeking to work in partnership with industry96.
Linkage projects also cover other aspects of research support such as infrastructure
and people development. Research infrastructure consists of the institutional re-
sources essential for mounting high-quality research projects in a particular field,
including associated indirect costs. The ARC provides funding to support the col-
laborative development and shared use of large-scale research facilities and equip-
ment.
In 2002, support is being provided for 70 research infrastructure development projects
around the country. An investment of $27.2 million is attracting contributions from
partner institutions to enable the purchase of equipment and facilities to a total value
of $48.6 million97.

3.4 Proposed ARC Network programme

The ARC is proposing a new Networks Programme,98 the purpose and conditions of
which are:
To provide an environment supporting highly creative, inter-disciplinary
research that is not averse to risk-taking, and which aims to move a field for-
ward or create exciting, novel research themes.
To assist groups of researchers to coordinate and communicate their research
activities across disciplinary, organisational, institutional and geographical
boundaries.
To encourage and fund an open exchange of information and sharing of re-
sources, development and implementation of coherent and integrated research
plans among researchers working independently on topics of common interest,
and efforts to nurture the careers of young investigators and research students by
promoting a sense of community and strong, effective mentoring.
To bridge between university-based researchers and teams who are eligible to
receive ARC funding assistance, and researchers working in, or supported by,
other research bodies and research funding bodies, with a focus on relationships
between people rather than organisations.
To provide for extremely flexible relationships between organisations involved
in Networks.

96
Australia. Prime Minister, Backing Australia's Ability: Real Results, Real Jobs: The Government's Innovation Report 2002-03
(Canberra: Department of Education, Science and Training, 2002)
97
Ibid.
98
See http://www.arc.gov.au/grant_programs/centres_networks/research_networks.htm

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Evaluation of the CRC Programme 2003

ARC Research Networks will be funded at up to $500,000 per annum for up to five
years, with approximately 15 networks funded at this level. The ARC does not intend
to restrict participation in Networks to research professionals but will encourage
participation by end-users, policy makers, and members of the community with
particular knowledge and skills. Funds cannot be used for activities funded under
other ARC programmes.
The proposed Programme makes no specific comment on relationships to CRCs, and
the proposal appears complementary to and not overlapping with CRCs objectives.

3.5 CSIRO Flagship programme

The CSIRO National Research Flagships initiative aims to deliver scientific solutions
to advance six national objectives:
Strong, sustained economic growth, new industries, competitive enterprises and
quality jobs.
Healthier, more productive lives for Australians.
Clean, cost-efficient energy.
More productive and sustainable use of water.
Sustainable wealth from oceans.
Growth and prosperity for regional Australia.
Each Flagship addresses two or more of these overarching national objectives, and the
initiative as a whole is closely aligned to the Commonwealth Government's National
Research Priorities.
Every Flagship is a partnership of leading Australian scientists, research institutions,
commercial companies, CSIRO and selected international partners. Together they are
expected to make a sustained contribution to our economic and social growth and
sustainability over a 25-year period.
Flagships will focus, integrate and re-direct existing scientific resources to issues of
pressing national importance. They are targeted initially at six fields of national
endeavour - health, energy, water, agrifood, light metals and oceans. In these fields
they seek to achieve technological revolution, in the sense of discovering, developing,
commercialising and applying frontier technologies to dramatically improve perform-
ance and, wherever possible, set world-best standards.
Each Flagship is intended to stand at the heart of an industry export cluster - many of
these being new industries. Potential interactions with CRCs occur in a number of
areas. The CRCs, with a focus on adoption and application provide a basis for the
development of strong linkages between research providers and research users.

3.6 NHMRC programmes

The NHMRC has an interest in the work of nine CRCs in the Medical Science and
Technology area, and strong working relationships with many of the scientists and
personnel in these CRCs.

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The NHMRC have established industry - linked programmes99 as a result of the Wills
Inquiry and Report. The two major programmes now established by the NHMRC are:
Development Grants – designed to support the development of health and
medical research that has a commercial potential and which has a potential to
benefit the Australian community.
These are targeted to provide support for research commercialisation at the
early proof-of-concept stage and while commercial partners, if they exist, are
encouraged, it is not a requirement that applicants have a commercial partner
in place. The grants are for one year, not more than $200,000 and cover activi-
ties in development of diagnostics, medical devices, pharmaceutical product
development, biotechnology, bioinformatics, biomaterials, new medical device
prototypes etc.
CRCs have been successful applicants for these grants (about 6 of 22 applica-
tions in the last round).
NHMRC Industry Fellowships – designed to provide support for Australian
researchers to gain experience in industrial research including business plan-
ning, project planning, and knowledge of business and industry dynamics and to
increase knowledge of commercial aspects of R&D within research institutions.
These fellowships target outstanding researchers who spend up to two years in
industry and two years in a research institution. The fellowships have been es-
tablished to foster interaction between Australian researchers and high technol-
ogy industries.
Health Research Partnership Grants aim to solve or prevent complex health
problems through multi disciplinary research. The cost of the research is shared
amongst partners with a contribution (if application successful) from the
NHMRC. Partners can be drawn from the domains of basic, population health,
health services and social policy research and from outside the health area as
appropriate. It has included partnerships with industry in injuries, diabetes and
metal health.
The NHMRC are considering new programmes in health networks.
These NHMRC programmes are not of the same scope or size of the CRC Pro-
gramme. They operate in the limited medical science and health services and have
complemented and supported the CRC Programme in these areas.

3.7 Major National Research Facilities (MNRF)

The MNRF Programme funds R&D facilities100 to provide Australian researchers
with access to large-scale, world-class research infrastructure. As such they are
centres devoted to assembly and use of expensive research infrastructure eg laborato-
ries and major equipment. The MNRF Programme funds facilities on the basis of
potential national benefit and scientific merit. The objectives of the programme are to:
Improve Australia’s capability in science, engineering and technology

99
See http://www.health.gov.au/nhmrc/research/develop.htm
100
See http://www.dest.gov.au/MNRF/

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Evaluation of the CRC Programme 2003

Maintain support for the rapid commercialisation of research results.

MNRF proposals have been approved with the Commonwealth providing up to 50
percent of the MNRF total eligible project costs with the balance provided by partici-
pant organisations, supporting agencies and users of the facility. Some of these
facilities are progressing to commercial status in that they have formed operating
companies and/or are associated with commercial ventures. The expectation in their
formation was that they would attract use and industry support, but that it was not
mandatory.
The CRC Programme has no direct overlaps with the MNRF, other than the latter
provides in some cases the facilities and capabilities that CRCs may wish to use,
rather than duplicate. A CRC may provide the operating environment for a MNRF –
as is the case with the Australian Photonics CRC.
A CRC proposal is being developed for the Australian Synchrotron facility based in
Melbourne.

3.8 Industry Action Agendas

Action Agendas are a major part of the Commonwealth Government's strategy to
assist the long term development of Australian industry. Action Agendas have been
established in a number of sectors including the Environment Industry.101
Action Agendas are intended to provide a flexible model for industry to consider and
develop sectoral priorities, and to plan for the future in partnership with government.
They provide a process to enable industry direction for a whole-of-government
approach on key issues such as innovation, investment, market access, regional
development, education and training, environmentally sustainable development,
workplace relations and regulatory reforms.
There are currently 29 Action Agendas at various stages including four under devel-
opment and 16 that are being implemented through the adoption of recommendations.
Nine have been fully implemented.
Outcomes under Action Agendas have included new industry-led CRCs in construc-
tion, wood manufacturing and spatial information.

3.9 Other forms of public-private industrial research partnership in

Australia
A review of 2002 University Research and Research Training Reports has identified a
number of significant industrial research partnerships between universities and
businesses that are not built around public programme support. These are identified
in Figure 11. The listing does not include university initiatives for business incuba-
tors and technology precincts.

101
Australia. Department of Industry Science and Resources, Action Agendas (Canberra: AGPS, 1999)

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Figure 11: University-industry Relationships without Public Programme Support

University Relationship
ANU BlueLab (Taiwan) has set up R&D laboratories on campus
Deakin The Ford Australia Program - A long standing partnership between Ford Australia and the University. It began as a
specialised training program and has evolved into a major research and development enterprise with a particular focus
on research training of direct relevance to industry.
Griffith University A University contract with AstraZeneca (London and Sweden), which is the largest pharmaceutical research and
development project in Australia. Unexpended support exceeds $70million.
Monash Location of Biota laboratories for chemistry and microbiology within the faculties of Science and Medicine respectively
BHP research teams for railway maintenance and engineering in the Engineering Faculty
University of Santos – provided $25m to sponsor the University’s education, research and education programs in petroleum
Adelaide engineering
Hickinbitham Roseworthy Wine Science laboratory on the Waite campus
Colgate has provided $3m to support a Clinical Dental Research Centre
University of A strategic partnership with Motorola through the development of a $50 million software engineering centre.
Western Australia An investment of $7.5 million by Samsung Corning, which joined with the UWA spin-off company Advanced Powder
Technology Pty Ltd to form a new company – Advanced Nano Technologies (ANT).
UTS UTS and Alcatel have entered into a special Education and Research Partnership which includes the establishment of
an innovative Centre for Telecommunications Systems for collaborative research and development.
Victoria University Victoria University and the Austin Research Institute (ARI) are the major partners in the establishment of the Victoria
Institute of Biotechnology (VIB), a $35m project at Werribee.
Western Sydney The Centre for Construction Technology Research, a collaborative arrangement involving the transfer of over $2
million of assets and annual research funding of almost $700K from BHP to UWS
Wollongong The BHP Centre for Steel Products and Processes, which during 2000 received a renewed commitment for funding of
$500K per year for 5 years
A collaboration between the Digital Media Centre and Sun Microsystems, aimed at UoW becoming a Sun Partner
University.

The trend towards industrial partnering directly with universities reflects the pattern
that has emerged in North America and Europe. It raises the issue about where public
policy and programmes to support public-private research partnerships should be
directed and with what outcomes in mind. This issue is taken up in the following
Section.

3.10 Overseas programmes and policies that support public-private

industrial research collaboration
As part of the Evaluation reference an analysis was undertaken of similar policies and
programmes in the United States, Canada, United Kingdom and New Zealand relating
to public-private partnerships for industrial research collaboration. The programmes
included
Cooperative Research and Development Agreements (United States)
National Centres of Excellence (Canada)
Faraday Partnerships (UK)
Research Consortia (New Zealand)
These programmes contain many of the design features of the CRC Programme. Of
interest is the adoption of a staged, negotiated application processes in some pro-
grammes, commencing with expressions of interest and followed by submission of
additional material and dialogue - and an opportunity for the Selection Panels to
provide additional strategic input and brokering with other participants.

3.11 Conclusion
It is apparent that the current national context in which CRCs presently operate, and
the operating environment of the major participants is undergoing substantial change.
There has been over the last ten years a substantial increase in the range of public
programmes that support university-industry collaboration and cooperation.

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From this perspective it is important that the CRC Programme be clearly identified in
terms of its purpose and “distinctiveness”. These relate, in essence, to the expectation
that the Programme reflects a “demand pull” from industry (industry driven) and the
focus is on the application, adoption and use of research results.
Both the ARC and NHMRC have made changes to their programme portfolios since
the early 1990s, since the start of the CRC Programme. ARC Linkage programmes
require 50:50 cash and in-kind contributions from an industry partner. Other pro-
grammes urge recipients of awards to try to leverage their grants against industry
funds. The CRC Programme by comparison has been able to successfully leverage
research user funding in a ratio of 3:1.
Since the Wills Review102 and Backing Australia’s Ability the ARC and NHMRC
have used their greater funding to extend their activities well beyond basic research
grants and have now minor but significant fractions of their funds to build their
industry research collaboration portfolios. This is focussed particularly in people
development programmes, designed to better engage researchers within the commer-
cial/industrial environments. There is also a range of industry support and incentive
programmes – although none provide assistance and support at the CRC level.
The Major National Research Facilities (MNRFs) have also developed alongside the
establishment of CRCs. MNRFs also now require matching funding, meaning more
resources from universities and supporting research institutions have been required to
attract Commonwealth funds. The major research universities have typically enjoyed
greater success at winning such grants and funds (represented in terms of size, but not
necessarily in proportion to overall research funding), and consequently have had to
make greater commitments.
The future direction of the CRC Programme is this environment, together with the
changing industrial research environment, is considered in the next Section.

102
Australia. Health and Medical Strategic Review, The Virtuous Cycle: Working Together for Health and Medical Research
(Canberra: Australian Government Publishing Service, 1999)

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4: Future Directions for the CRC Programme

The purpose of this Section is to draw together material in the previous Sections
relating to the changing industrial research and policy and programme environments
and provide a perspective on the evolution of the CRC Programme during the course
of its operation.

4.1 Categories and “trajectories”

The CSIRO noted in its submission that it is important to recognise that CRCs fall
into different categories. In particular, there is a major distinction between:
CRCs operating in a clearly commercial context and whose outputs will require
investment by industry or business to produce rewards.
CRCs working in the “public good” arena , which will often require government
or community participation to capture the benefits of the research.
CSIRO points out that the pathway to the effective utilisation of research outputs is
different between these two cases. For example, some of the detailed agreements
necessary to manage and identify ownership of IP that are necessary in the former
case may be unnecessary or even counterproductive in the latter.
Many other submissions pointed to a difference between commercial and public good
CRCs. While the distinction has strong currency, the two categories share a common
purpose in that they are both required to deliver economic, environmental and social
benefits. The national benefits that may accrue from a “public good” CRC in the area
of salinity abatement, for example, may deliver economic outcomes running into
$billions in terms of improved agricultural practices.
The issue for the CRC Programme is that there must be a clear path to adoption –
even if that path takes many years.
It is also the case that many CRCs share commercial and public good outcomes.
CRCs in agriculture, mining and the medical areas deliver commercial benefits to
participating companies and also general industry as well as community benefits
through widespread adoption and use. This reflects the well argued “spill over”, or
“externality effect” of industrial research and development. The issue of the public
benefit-commercial benefit split is less relevant when the CRC Programme is viewed
from a broader perspective of national industrial research and development and
capacity building.
Within this context it is nonetheless possible to identify three quite distinct trajectories
in the evolution of the CRC Programme, and which have relevance for its ongoing
development in the national science, industrial research and innovation system.
CRCs that operate as national benefit research centres – with a strong focus on
resource sustainability
CRCs as industrial research collaborations – which have a strong focus on
cross industry performance improvement
CRCs as business development centres – which have a strong focus on research
commercialisation in individual companies.

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Evaluation of the CRC Programme 2003

The basis of the differentiation is that not only are the paths to adoption, application
and use different, the processes for selection, approval, funding, monitoring and
reporting should be adapted to differing needs and requirements. The differences are
outlined below in terms of models or types:
Figure 12: Trajectories in the Evolution of the CRC System
Category 1 Category 2 Category 3
Mission National Economic, Environ- Industrial Research Collabora- Business Development.
Orientation mental and Social Benefit tion.
Nature of the Strategic and structured to Transactional. To “commercialise” research
Collaboration resolve issues of national Reflects trend towards through the creation of new
economic, environmental and distributed systems of business models – in existing or
social significance knowledge creation in new enterprises.
Research focus New discoveries, new Application of existing Applications technologies in
knowledge that may have, or the knowledge to develop products that meet an identified
potential to have application technologies that have an or potential customer need.
over the longer term. industrial application. Strong market focus.
Strong science focus. Strong technology focus.
Leadership and Chief Researcher with strong R&D Manager with industrial Entrepreneurial Manager with
Direction academic research background. research background. experience in starting
businesses.
Nature of Benefits Increased scientific knowledge Platform technologies available Experimental science and/or
and intellectual capital and to industry. technology development leading
knowledge available for to the development of
application for national benefit. intellectual property and the
transformation into products and
processes.
Distribution of Broad and general distribution to Technology transfer across New business formation based
Benefits the economy and society industry on ownership of IP assets.
Industry Partners State natural resource Companies in global markets. CRCs.
management agencies. Agriculture Departments and State governments acting as
Rural RDCs acting for primary innovation agents.
producers. Venture capital investors
Water services authorities. (including corporate VCs).
Nature of Exploratory. Continuous/incremental. Disruptive.
Innovation
Examples Natural Resource Management Mining CRCs. ITC CRCs,
CRCs Composites, Alloys and Welding Biotechnology CRCs
Biodiversity CRCs CRS Medical Devices CRCs – Vision
Public health CRCs Agriculture CRCs. and Cochlear.
Water Quality & waste
management CRCs.
IP Management IP important as a basis for IP less important than IP a core strategic asset.
marketing and/or adoption and complementary assets.
supplementary income
Funding and Long-term commitment, but Medium term - to provide Short term – with opportunities
financing with a strategy for transition. incentive for industry partners to for flow on and scale up
requirements ameliorate developmental risk.
Exit strategy Permanent Government Industrial R&D Institute. New Technology Company.
Programme
Organisational Stability and continuity. Complexity in working with Flexibility and agility.
characteristics multiple stakeholders and
interest.
Constraints on Orientation of academic Shortage of managers credible in Shortage of managers with
development researchers to discovery/ science, knowledgeable of IP business and commercial skills
curiosity research; lack of and with business and necessary to develop technolo-
commitment to implementation commercial skills necessary to gies into products and
and adoption. attract and meet needs of sustainable business models.
partners.
Rational for Long term economic, environ- Arguments relating to support Arguments related to new
government mental and social benefits for industrial research and business and associated research
support development. commercialisation.

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Evaluation of the CRC Programme 2003

Category 1 Category 2 Category 3

Issues to address in Encourage collaborations that Ability to resource fewer centres More flexibility in application,
current CRC involve long term commitment at significantly higher levels assessment and monitoring
programme and potentially high level of than at the moment. processes; lower initial levels of
resource commitment. Securing long-term industry funding.
Securing community involve- engagement. Securing venture investment
ment
Major weaknesses “Mini ARC” granting Research outsourcing; cost Difficulty in meeting current
arrangement. shifting. selection criteria relating to
Industry finds difficult to commercialisation hurdles
commit for long term.
Major strengths Continuity, commitment, Effective collaboration; Innovative, agile, flexible.
stability. economies from collective
approach; focus on global
competitiveness.
Distinctiveness Focus on application of scientific Industry/user driven. Opportunity driven; innovation
discoveries and user involve- focus.
ment.
Risks Application driven funding Anti competitive behaviours. Business failures.
models. Trust failures.

Further discussion on each category follows.

4.2 National Benefit CRCs

The primary purpose of national benefit CRCs is to deliver outcomes related to the
preservation, restoration and repair of Australia’s natural capital and the maintenance
of biodiversity. They also have roles in public and environmental health and more
recently in national disaster research.
During the 1990s, and particularly from 1996, there has been growing national policy
interest and concern with natural resource management, environmental protection and
sustainable agriculture. These issues have been approached from an intergovernmen-
tal policy and program framework where responsibilities are shared between the
Commonwealth, the States and local government.
The significance of the policy interest was reflected in the report to the Prime Minis-
ter’s Science, Engineering and Innovation Council, Dryland Salinity and Its Impacts
on Rural Industries and the Landscape. The Report noted, for example, that while
salinity is widely recognised as causing problems for agriculture it is less appreciated
that dryland salinity causes serious damage to downstream water users, aquatic eco
systems and biodiversity and to regional and urban infrastructure due to damage to
foundations from shallow, saline groundwater103. The report also noted:
There are clear market failures in that the costs of degradation to downstream users
and to the environment are not borne by those benefiting from upstream exploitation
of the landscape. In many cases the costs will be borne by future generations. Leav-
ing it to the markets to resolve will cause serious and irreversible offsite impacts to
biodiversity, rural infrastructure and downstream water users, as well as causing un-
necessary hardship to landholders.104

It was also during this period that the contribution of science to the resolution of
natural resource management problems received wider acceptance. This was re-

103
Australia. PMSEIC, Dryland Salinity and Its Impacts on Rural Industries and the Landscape (Canberra: Department of
Industry, Science and Resources, 1998) P.5
104
Ibid. , p. 9

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Evaluation of the CRC Programme 2003

flected in another report to PMSEIC in 1999105. However, the critical issue is trans-
lating scientific knowledge into practical application. Thus, contemporary ap-
proaches to natural resource management require comprehensive strategies at the
national, regional and community and level to develop new, sustainable land, water
and soil management systems to repair and replenish natural capital and prevent
further biodiversity loss.
It is now well recognised that the work of regional and community organisations is
much more effective and sustainable when based on the application of scientific
knowledge in strategies that address and reverse the pattern of natural capital degrada-
tion and biodiversity loss. Moreover, there is a very high level of awareness, under-
standing and acceptance among natural resource managers, rural industries and the
community that sound environmental management is important to achieving the
economic, environmental and social goals106.
The CRC Framework is an important vehicle in natural resource management through
facilitating cooperation and collaboration between universities, the CSIRO, the Rural
Research and Development Corporations, State Government Departments and rural
based industries. The scientific knowledge created and transferred through effective
communication strategies provides the basis for implementation in the form of “on-
ground” works and action by organisations operating at the regional and community
level. There is, however, more that can be done to involve nongovernmental organi-
sations (NGOs) in this process107.
The outcomes of research adoption in the natural resource management area take
many years to realise – but the economic benefits can be immense, in terms of the
contribution to sustainable agriculture and minerals production and national water
quality. This is apart from the benefits reflected in the maintenance of biodiversity
and natural heritage assets. The critical issue in assessment of outcomes, however, is
the integrity, validity and continuity of the planning and decision making processes
that have been put in place for implementation.
In addition to universities and publicly funded research agencies, the participants in
these CRCs are predominantly public sector organisations and agencies. In this
respect the CRC Programme has complemented State Government effort in environ-
mental research and facilitated the application of science to public policy and public
programmes. The Programme is important in contributing a science input into
Natural Heritage Trust Programmes and Regional delivery frameworks.
Natural Resource Management CRCs play an important role in building community
capacity and involvement in natural resource management. That role should con-
tinue; the prospects for greater involvement of non-government organisations in
environment CRCs should be approached in the same way as involvements of SMEs
in more commercially oriented CRCs.

105
Australia. PMSEIC, Moving Forward In Natural Resource Management - The Contribution That Science, Engineering And
Innovation Can Make (Canberra: Department of Industry, Science and Resources, 1999)
106
Howard Partners, Review of the Administration of the Natural Heritage Trust (Canberra: Department of Environment and
Heritage, 1999)
107
The barriers to NGO involvement in CRCs are similar to the involvement of SMEs in industry improvement and business
development CRCs.

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4.3 Industrial Research CRCs

The core focus of the CRC Programme has been on the development and operation of
long-term industrial research partnerships. These arrangements have thrived in
mature, commodity-based industries where there is a common concern with factors
such as productivity, product quality and international competitiveness. Speed to
market rather that intellectual property is the primary driver of business development.
The approach to invention and innovation is to develop industrial processes and
practices that can be implemented across an industry. An objective is to let intellec-
tual property out into the field as quickly as possible and promote its rapid adoption.
There is an understanding that wealth creation will occur through broad industry
adoption rather than returns to businesses acting alone.
The CRC Programme is highly regarded among research users for innovation in
industrial processes and practices across the agriculture, minerals, energy, and water
industries. These industries have a strong track record for collaboration in research
and they exhibit strong leadership. Agriculture and mining operate in highly inte-
grated, global supply chains while the water services industry is the responsibility of
regionally based monopoly suppliers. Successful industrial research collaborations
have also developed around materials sciences (composites), alloys and welding.
Australia is a world leader in the manufacture of mining equipment as well as medical
devices.
Industrial research collaborations also utilise the most powerful tool for effective
diffusion of knowledge: the movement of young scientists, engineers and doctors
from their university setting to the commercial world, taking their tacit and codified
knowledge with them108. Graduate education and research training is regarded as a
critically important dimension of the Programme.
Many of the outputs of supported research in industrial research collaborations do not
necessarily take a tangible form, such as inventions, patents or prototypes. They are
often intermediate outcomes – that is, pieces of intangible knowledge that help firms
conduct their own R&D more efficiently, suggest ideas for new products or open up
new domains for research. These intermediate outcomes can be transferred in numer-
ous ways, including research papers, hiring of students and informal interactions.109
Some very large Industrial Research CRCs have emerged over the last 10 years and
have made substantial contributions to development in their industries. They have
established international reputations for innovation. They undertake research for
businesses on an “outsourced” or contract basis and earn substantial amounts of
revenue from this source. In some instances CRCs are competing with private re-
search providers.
There are several CRCs operating as industrial research collaborations that have
entered their third round of funding – implying continued Commonwealth support for

108
Branscomb, "Research Partnerships in Public Policy,"
109
Wesley M. Cohen, Richard Florida, and Lucien P Randazzese, "Industry and Academy: Uneasy Partners in the Cause of
Technological Advance," in Challenges to Research Universities, ed. Roger G Noll (Washington: The Brookings Institution,
1998).

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Evaluation of the CRC Programme 2003

21 years. There is a risk that these partnerships will become “institutionalised” as

research organisations in a manner beyond the intent of the Programme.
CRCs operating as very long term industrial research collaborations should be
encouraged to exit the CRC Programme after second round funding and develop into
self-sustaining industrial research institutes, which can be supported independently
by industry.
While the Industrial Research Collaboration CRCs flourished in commodity industries
and industries with strong leadership and a track record of collaboration, they have
not had a major impact in the development and application of research in industries
where there is a high degree of product based competition such as in the food indus-
try. Success is often limited to “pre-competitive” R&D and more often associated
with development of processes, practices and prototypes rather than specific products.
In industry sectors characterised by strong competitive pressures, industrial research
is being approached increasingly on a market and contested basis. The open-ended
industrial research partnership with multiple participants has evolved into more
specific contract research relationships with nominated research organisations and
researchers110. Within the CRC Programme a number of large businesses now seek to
negotiate specific research contracts with universities and researchers outside the
main Centre Agreement.
In the current commercial environment there are few businesses that have the “free”
resources to provide to CRCs to undertake research that does not address a specific
business problem or opportunity. There is little interest among the established
business community in involvement in CRCs where the path to market is likely to be
through the creation of a start up company or supporting the growth of a “new tech-
nology based firm” (NTBF – a special sort of SME). It is well known, however, that
new companies based on disruptive technologies pose major threats to the competitive
position of established companies111.
The CRC Programme does not address, and nor was it intended to address, short term
small-scale project research. This area is now well covered with ARC Linkage
Programmes and there is no case for the CRC Programme to extend back into this
domain. The focus of the CRC Programme has been on longer-term applicable
research with end user involvement in adoption, application and use as the underlying
criterion. It has tended to concentrate in those industries where Australia has a
competitive strength, and has been instrumental in maintaining and building that
strength.
From the material presented in Section 3 of Part II of the Report it is apparent that the
industrial research collaboration “space” now involves a great deal more activity than
it did ten years ago. There is now a wider range of alternative support programmes to
facilitate the production of industrially applicable knowledge, particularly in Centres

110
This is occurring in industries where businesses are going through a process of corporate “disaggregation” and moving away
from an organising principle based on markets to one based on contracts. See for example John Hagell and Marc Singer,
"Unbundling the Corporation," McKinsey Quarterly 3, no. 3 (1999)
111
See Clayton M Christensen, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard
Business School Press, 1997), Clayton M Christensen, Mark W Johnson, and Darrell K Rigby, "Foundations for Growth: How to
Identify and Build Disruptive Businesses," Sloan Management Review 43, no. 3 (2002)

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of Excellence and Major Research Facilities. However, these Centres are predomi-
nantly located in areas of what is sometimes referred to as “new science”. The
capacity of existing Australian businesses to pick up opportunities in this area is
limited. There are, however, opportunities for the creation of new businesses.
In Part I of the Report it was noted that research providers and public sector research
users intended to take a more strategic approach to their involvement in CRCs. It
follows that the Programme design should reflect the intention of the universities, the
CSIRO, State Departments, and others who indicated that they would be taking a
more considered approach to their involvement in CRCs. These factors tend to
suggest that there will be a fall off in high quality applications for CRCs based on the
existing format of industrial research collaborations. Nonetheless, the CRC Pro-
gramme should continue to strongly support industrial research collaborations in those
industries where Australia has a global competitive strength. (This not only includes
the commodity industries, it also includes high technology manufacturing equipment
and devices)
There is also an opportunity for the CRCs to develop close ties with the ARC and
other Centres of Excellence and MNRFs in relation to the adoption and application of
research. This applies particularly in the ICT and biotechnology sector but can be
extended to other areas where Centres are creating commercially applicable knowl-
edge. In this regard, the CRC Programme would continue with its focus on research
commercialisation through new business development for the outputs of these Cen-
tres. The development of the CRC Programme as an investment Programme would
support this direction.
The trends inherent in the development of the CRC Programme point to a movement
in emphasis from the established industrial research collaboration CRCs to CRCs
based on new business development.

4.4 Business Development CRCs

The interest in business development flows directly from public policy. Universities,
and public research organisations also have a strong interest in generating returns
from the creation of businesses out of technologies they have developed. This is the
essence of research commercialisation. With the realisation of the potential for
economic growth built on knowledge-based businesses and industries through the
commercialisation of public research, there have been growing expectations of the
CRC Programme in relation to new business development.
While the CRC Programme Guidelines place a priority on research commercialisa-
tion, only 20 percent of CRC expenditure was taken up in what can be classified as
business development CRCs. This reflects in large measure the application and
assessment process where all CRCs are judged against each other in the same pool.
The application of commercial assessment criteria can actually work against CRCs
based on new business development, as it is easier to assess (and question) commer-
cial viability. In national benefit CRCs commercial outcomes are rarely relevant.
New business development is most likely to be found in fields where science is
advancing very rapidly, where people capable of advancing in a field are in relatively
short supply, and where intellectual property protection is available and very impor-

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tant. These characteristics occur most predominantly in information and communica-

tion technologies, biotechnology, medical devices, and to some extent in electronics.
As indicated above, it is in these areas that Centres of Excellence have been estab-
lished.
The potential for commercialisation within the CRC Programme is strongest where
path to market is through licensing to an industry partner that takes on product devel-
opment, manufacture, and marketing, or the creation of new business models (i.e..
start-up companies) supported by venture capital investment.
In the business development category the CRC Programme is, in effect, endeavouring
to respond to the “demand-pull” of technology investment opportunities. The task of
the CRC is to develop technologies and prepare business models to a stage where they
are “investment ready”. This requires a range of intellectual property management
and commercial skills – in addition to the research skills of scientists. However,
venture capital and other technology investors have raised concerns about the current
level of capabilities of CRCs in this area and their understanding of what constitutes
“investment ready”.
Many CRCs involved in business development are associated with only one industry
partner. An important issue has been whether the Programme should be supporting
“single user” CRCs in this area – that is, where one company will reap the primary
benefit of commercialisation outcomes. For example, where CRCs have been
successful in developing medical devices, a question has arisen about whether it is
appropriate to have a CRC with only one business partner. In most cases, however,
the business partner dominates the industry and provides substantial benefits back to
the research provider in the form of education and new scientific knowledge.
In some other cases a CRC proposal will not be able to attract any industry partners
due to the “disruptive” nature of the technology being developed. That is, there is
little industry "demand pull" for research in this area. Existing businesses may be
interested in acquiring or licensing the technology once developed and demonstrated,
but unwilling to invest in that development – particularly if their R&D strategy is
based on technology acquisition. In these situations State Governments with an
interest in encouraging research commercialisation are involved with the CRC in a
role of “state entrepreneurs”. Venture capital investors may also be involved.
To date the overall performance of the Programme in research commercialisation has
not been strong. This reflects the traditional orientation of the Programme to national
benefit and industrial research collaborations where the results of research are used
and adopted by the industry participants. Commercialisation through technology
licensing or spinouts to parties outside the CRC is not generally considered to be a
major issue in these CRCs. Some revenue is made by sales of product and services to
users outside the CRC but the amounts reported are quite small and do not form the
major focus of the work of the CRC. Commercialisation may actually create prob-
lems for CRCs and participants in the form of unexpected (and unwanted) tax liabili-
ties.
To increase the rate of commercialisation, it will be necessary to shift resources
within the Programme to funding more CRC proposals that are based on new business
investment strategies and in particular, strategies based around the exploitation of

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disruptive technologies. That is, in order to have an increase in commercialisation

outcomes, it will be necessary to have more CRCs based on commercialising re-
search.
A greater focus on commercialisation will, in turn require more attention being given
to the investment nature of a CRC proposal. The Report makes a number of recom-
mendations to shift the focus of the CRC Programme from a “research grants”
mechanism to an “investment appraisal” vehicle in Section 6 where it is proposed that
CRC selections be based on “robust and compelling investment propositions”.
Recommendations are also made to streamline the application, approval and monitor-
ing processes.
Commercially oriented CRCs need to allocate a sufficient level of resources to
business development, including IP protection, management framework, product
quality and integrity, and technology marketing: that is, to become investment ready.
To the extent that Commonwealth CRC Programme funds are not intended to finance
the actual starting of a business, as distinct from getting a technology to the stage of
business “investment ready” and given that those resources are unlikely to be avail-
able from industry partners (for reasons outlined above), it would also be expected
that the CRCs would have greater access to publicly supported pre-seed and seed
funds once the basics of the business model had been developed.
CRCs should not be precluded from access to AusIndustry Pre-Seed funds..
At the same time, it is important that CRC proponents be realistic about the expected
returns from the science and the technology that has been developed in a research
environment and the importance of actually creating a business model for commer-
cialisation – that will attract the interest of a technology investor – either as a licensee,
development partner, or equity provider in a start-up company. A technology without
a business model has no commercial value whatsoever.

4.5 Conclusion
The CRC system has clearly evolved down the three trajectories described in this
Section. The system was initially based on “Category 2” arrangements with the
emphasis on industrial research collaborations. However, with an increasing empha-
sis being placed on the commercialisation of publicly funded research, greater atten-
tion is being given to expectations of CRCs performance in relation to Category 3. At
the same time, a focus on commercialisation causes a high level of unease for people
associated with national benefits CRCs.
It is therefore proposed that the CRC framework clearly acknowledge the three CRC
categories and relate selection criteria, oversight and monitoring arrangement to suit
the needs of each. It is also suggested that a common thread through all categories is
to see Commonwealth support for CRCs as an “investment” with clear intentions and
expectation relating to adoption, application and use.
To address these issues, the CRC Programme needs to be seen as more an investment
Programme. Recommendations to this effect are made in subsequent sections of the
Report.

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5: The Clarity and Appropriateness of the Current CRC

Objectives

The Terms of Reference for the Evaluation required consideration of:

The clarity of the objectives:
Do the individual objectives provide a coherent overall framework for the Programme?
Is there a clear relationship between the Programme objectives and the selection criteria?
Is there any conflict between any of the objectives, for example commercialisation/collaboration
or selection criteria?112

These issues, together with considerations of Programme appropriateness are ad-

dressed in the light of the discussion in the earlier Sections of this Part of the Report
and from feedback through consultations and discussion during the Evaluation.

5.1 Overarching vision and purpose

In a management sense, a vision for a public programme identifies the overarching
purpose and defines the direction of actions and activities. The vision is the concept,
or the idea, that captures the imagination, attention and interest of participants and
stakeholders.
The original vision for the CRC Programme was presented by the then Minister for
Science and Technology in the following terms:
The Cooperative Research Centres will help Australia to achieve closer linkages be-
tween science and the market.
Australia must match the technology push provided by its strong research base with
the demand-pull of industry and other research users, and these centres will make an
important contribution to that goal.113

In discussions and consultations no reason was given to depart from this “visionary
statement”. It applies to research that is oriented towards direct industrial application
in businesses as well as research oriented towards the conservation and repair of
Australia’s natural capital assets (land, soil, water) to enable their more productive
and sustainable use.
Since their introduction CRCs have been a major element in Australia’s scientific and
research infrastructure. They were established to draw together outstanding research
groups in universities, the CSIRO and other government research institutions and link
them to research users in industry and other sectors of the community.
CRCs were intended to “reflect a balance between longer-term strategic research and
short term, market oriented projects that is essential to forging the links we need
between science and industry”. The centres would also “play an important role in
training in science and engineering research, providing the skilled people we need to
be internationally competitive into the next century”.114

112
The selection criteria for the 2002 Round are attached
113
Minister for Science and Technology in announcing the first Cooperative Research Centres, 14 March 1991.
114
Ibid

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In the light of the developments in approaches to industrial research and the central
place of public-private research partnerships in the science and innovation system, the
overarching purpose of the Programme remains relevant and applicable. It is impor-
tant that its sense of purpose be kept constantly at the forefront of attention.
Recommendation
II-1. The CRC Programme be promoted on the basis of an overarching
purpose “to create and sustain active public-private research part-
nerships oriented towards the adoption and utilisation of research in
a national, industry and business context”
The purpose of the Programme is not so much to match public research with corporate
research, although this is part of the process. It is to take an integrated approach to
industrial research with the intention of generating wealth through higher industry and
business performance and ensuring the long-term sustainability of Australia’s natural
capital assets. By implication, the purpose of the Programme is also to encourage
businesses and public organisations to use and apply the results of research in the
development of marketable products, industrial processes and in public programmes.
The original Programme objectives were:
to contribute to national objectives, including economic and social development, and the
establishment of internationally competitive industry sectors through supporting long-term, high
quality scientific and technological research;
to capture the benefits of research, and to strengthen the links between research and its commer-
cial and other applications, by the active involvement of the users of research in the work and
management of the centres;
to promote cooperation in research, and through it a more efficient use of resources in the
national research effort by building centres of research concentration and strengthening research
networks; and
to promote the active involvement of researchers from outside the higher education system in
educational activities, thus stimulating a broader experience in education and training, particu-
larly in graduate programs and to offer graduate students opportunities to be involved in major
cooperative, user oriented research programs.

In announcing the first 15 successful applications in 1991, the Minister articulated

some specific expectations of the Programme:
Improve Australia’s industrial base, especially advanced manufacturing and information
industries, by drawing our experience in the emerging fields of material science and information
technologies.
Capture the benefits of our world class capability in medical research, both through the devel-
opment of pharmaceuticals and other commercial products contributing to public health.
Strengthen the established resource based industries both by providing the knowledge that will
underpin their continued competitiveness and addressing the challenge of the sustainable use of
our natural resource wealth.
Contribute to more responsible and effective environmental waste management and the exploita-
tion of commercial opportunities in this area.
Take a leading scientific position in the Antarctic, enabling us to continue to strengthen Austra-
lia’s lead in the international consideration of this unique region.

The available evidence suggests that the CRC Programme has delivered well in
relation to these expectations.

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These original objectives have a strong outcome orientation and provide a focus for
action. Over time, the objectives of the Programme have been revised and reworded
and have become more process oriented. The current objectives are:
To enhance the contribution of long-term scientific and technological research and innovation to
Australia’s sustainable economic and social development (the research objective).
To enhance the transfer of research outputs into commercial or other outcomes of economic,
environmental or social benefit to Australia (the commercialisation objective).
To enhance the value to Australia of graduate researchers (the education objective).
To enhance collaboration among researchers, between researchers and industry or other users,
and to improve efficiency in the use of intellectual and other research resources (the collabora-
tion objective).

These objectives are supplemented by selection criteria, which provide the basis for
assessment of applications and ongoing evaluation and review. These selection
criteria are:
Objectives of the CRC.
Quality and relevance of the research programme.
Strategy for utilisation and commercialisation of research outputs.
Education and training.
Collaborative arrangements.
Resources and budget.
Management structure.
Performance evaluation.
The relationship between the objectives and the selection criteria is discussed further
below.

5.2 The relative priority and emphasis of the current objectives

In consultations and submissions there was a wide range of comments concerning the
relative emphasis, interpretation and application of objectives.

5.2.1 Contribution of long term scientific and technological research to sustain-

able economic and social outcomes
The CRC Programme is premised on the basis of commitment to long-term research.
The quality of the research programme is one of the nine selection criteria. However,
the meaning of long term must also be understood in the context of achieving tangible
and measurable outcomes. If the research does not have tangible and measurable
outcomes and impacts within the funding life of the CRC then there is little possibility
of being able to track the extent to which the benefits have been captured and
achieved.
The difficulty is to a large extent overcome in the Guidelines, which imply a relation-
ship between basic and long-term research. That is:
It is important that CRCs maintain an appropriate level of basic research to underpin
the overall research programme, provide a sound basis for the education programme,
and build on the existing intellectual capital of the participants.
It is expected that CRCs will maintain a strategic focus on long term, high quality re-
search. Contract research and short term problem solving should only be used as a

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subsidiary means of fostering effective collaboration, particularly with users. Such

research should complement the main objectives of the CRC.
The strategic commitment of users, both in the public and the private sector, is criti-
cal to the success of the Programme. It is not intended that CRCs function simply as
short-term contract research providers.

In other words, basic and/or long-term research is required in the CRC portfolio to
balance short-term research and long-term programme research. Shorter term and
problem oriented research projects are attractive to end users, particularly where
resources available for research are highly constrained. The outcomes of shorter-term
project research are also easier to measure and report on.
Notwithstanding the intent of the Guidelines, there are many businesses that effec-
tively outsource their research to CRCs. This outsourcing reflects the trend in indus-
trial research referred to in the preceding Sections of this Part of the Report. From an
industry policy perspective it is a legitimate activity, providing that externalities and
national benefit can be demonstrated in the same way as assistance provided under
programmes such as R&D START.

5.2.2 Commercialisation and technology transfer

There is a strong view within industry that the CRC Programme, whilst scientifically
robust, is failing to effectively capture commercial benefit for the broader good of
Australia. This was recognised in the latest selection round and commercialisation
and technology transfer now receives a substantial level of attention in the Programme
Selection Criteria. For example, the 2002 Guidelines provide:
A key objective of the Programme is the transfer of technology to the research users.
Each CRC must have in place a well-defined strategy for the commercialisation,
technology transfer or utilisation of the research results, in which the benefits of the
research will accrue substantially to Australia. Evidence of benefit to Australia will
need to be based on realistic projections. These projections must reflect the capacity
for commercialisation or for the uptake by users in areas of national interest.

The capacity to deliver on this requirement has been an important issue in the assess-
ment process. Commercialisation and technology transfer involves much more than a
strategy: it involves a commitment to implementation, which in turn requires a
realistic allocation of resources and appointment of people with the skills and compe-
tencies necessary to take discoveries and inventions through to market and other
forms of use and application. This has been demonstrated in a number of CRCs,
including Eye Research, Cochlear, Vaccine Technologies, Beef Quality, and Photon-
ics.
The objective to enhance the transfer of research outputs into outcomes should be
approached within the reality of the innovation process. Technological outcomes of
research are simply either inventions or know-how. Innovation is a management
process requiring skills in areas such as product development, design, marketing and
business development. Management is also a practice-based discipline, learned
through experience and exposure to the rigours of the market.
The issue is not whether research is public or commercial; the issue is whether it
results in addition to wealth by either producing new products or services or improv-
ing the natural resource productive base. In this regard the Programme should require

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that CRCs demonstrate a clear plan articulating how research results are to be applied
to the benefit of Australia, and how this will be implemented. Performance against
this plan should be regularly and rigorously assessed as a requirement of funding.

5.2.3 Enhancing the value of graduate researchers

The meaning of the objective to enhance the value to Australia of graduate research-
ers” is not especially clear. However, the Programme Guidelines envisage that
education and training activities are likely to produce some of a CRC’s most enduring
achievements.
The Programme Guidelines require that education and training programmes be
designed to meet the needs of the user sector. The Guidelines prescribe:
In designing education activities, applicants should ensure that students in the CRC
receive a broad range of experiences and skills development. These programmes
should be aimed at enhancing their acceptance by the user sector, and consequently
their employment prospects.
The programme for students should include appropriate induction courses in such ar-
eas as occupational health and safety, research utilisation and commercialisation, in-
tellectual property rights (including their own), and project management.
Where appropriate, CRCs may provide professional training for people already in the
work force to update technical skills and to facilitate technology transfer.

Several CRCs are engaging with vocational education and training institutions in their
education and training programmes. This has the important outcome of training
people to use technology as well as thinking up ways to apply it. It is important that
this practice continue and be developed.

5.2.4 Collaboration
The Programme Guidelines advise that the development of effective collaborative
arrangements is a key element in the success of a CRC proposal:
CRCs should establish strong interactive linkages among individual researchers, be-
tween the participating organisations and between the researchers and the users of the
research. This can be best achieved if researchers from all the participating organisa-
tions in the CRC, including the user groups, are actively involved in a majority of the
CRC’s programmes, and this is strongly encouraged.

It is important however, that collaboration be genuine and that the selection process
tests the veracity of the proposed interactions. By the time researchers come to being
considered seriously for the substantial level of funding available under a CRC grant,
they should be able to demonstrate a track record in collaboration. This goes beyond
joint authorship of papers into demonstration of effective collaboration in projects that
have produced outcomes.
With experience in collaboration in other contexts, the CRC Programme provides an
important avenue for researchers to access larger amounts of assistance and support to
take on larger and possibly higher risk investment opportunities than would otherwise
have been possible.
In view of the trend towards increased devolvement of natural resource management
(and other) decision-making to regional or catchment bodies a suggestion has been
made to include specific reference to community groups in the objective about

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“collaboration among researchers, between researchers and industry or other

users”.

5.3 Conflicts between objectives

During discussions and consultations and in submissions the potential for conflict
among objectives was raised. The main area of concern was apparent conflict be-
tween research excellence and research relevance.

5.3.1 Between research and commercialisation

Businesses and research funding agencies consulted during the Evaluation suggested
that collaboration and commercialisation/technology transfer objectives are funda-
mentally at odds with the education and research objectives. They argue that the
Universities are highly (and correctly) focussed on research and education objectives.
CRCs, on the other hand, should be focussed on the technology trans-
fer/commercialisation and collaboration objectives that address a user need. Busi-
nesses tend to be less interested in foundation research because it typically does not
address their needs and concerns in a direct and useable way.115
At the centre of the issue is an absence of a clearly understood definition of “research
excellence”. The term can be used, for example, as a measure of research output
(publications, patents, etc), and related to values of curiosity driven “disinterested”
research and academic freedom. In a contemporary vein, however, excellence can
also be interpreted to reflect research outcomes - research “products” transferred to
“the public” as commodities116 - that is research utilisation.
The reality is that in some areas of industrial innovation, such as in drug discovery,
scientific excellence is required, for example, to identify molecules or proteins that
have a therapeutic impact. Increasingly, new industrial applications are based directly
on the results of scientific discoveries rather than technological inventions. Nonethe-
less, involvement of industry partners with an interest in path to market should still
remain an essential component of the CRC Programme.
The history of industrial research is characterised by both research excellence and
relevance. It is not one or the other. Relevant research must also be excellent – but in
an industrial research context, it must also be applicable. Excellence in this regard is
taken to mean world class, as indicated by a reputation for creation, successful
application and guiding the adoption of industry relevant processes and products.
There are many researchers in the CRC system who would fit this criterion.
The CRC Programme should not, however, be seen to support excellent research for
its own sake. This should be the task of other programmes.

5.3.2 Between publication and profit

It is often argued that the academic quest for “eminence”, involving open disclosure
of foundation research, conflicts with the profit motive of firms. Again, this gives rise

115
Cohen, Florida, and Randazzese, "Industry and Academy: Uneasy Partners in the Cause of Technological Advance.", p. 186
116
Corynne McSherry, Who Owns Academic Work? Battling for Control of Intellectual Property (Cambridge, MA.: Harvard
University Press, 2001)

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Evaluation of the CRC Programme 2003

to a conflict between the research and the commercialisation objectives of the Pro-
gramme. Firms prefer less disclosure of research findings to increase the appropri-
ability of the profits of any product or process innovations that may emerge out of the
research. There is evidence from the United States that growing ties between univer-
sities and industry are inducing academics to accept restrictions on the disclosure of
their research.117
Similar conflicts arise in relation to disclosures and the prospects of commercialising
research through a spinout company – although the pressures are internally rather than
externally induced.

5.4 Relation of Current Programme Objectives to the Selection Criteria

The tendency for the Programme management and delivery to focus on the Selection
Criteria rather than objectives have been noted above and in Part I. This arises largely
because of the generality of the objectives and the reliance on the selection criteria to
guide the application and selection process in particular directions. In other words,
the selection criteria provide constraints and direction in relation to the interpretation
of objectives. This is indicated in Figure 13 below.
Figure 13: Directions and Constraints Contained in Programme Selection Criteria
Selection Criterion Directions/Constraints
Objectives of the Applicants should be able to explain the national significance of the proposed outcomes in economic,
CRC environmental or social terms.
Quantitative estimates of potential benefits should be presented where practicable. This should include
revenue and expenditure forecasts for the period for which CRC Programme funds are sought and
should also provide an analysis of competitive activity in the research field selected.
Quality and The emphasis of the programme is on high quality research that will contribute to national economic,
relevance of the environmental and social objectives. Some examples of national objectives are: the development of
research programme internationally competitive industry sectors; the development of emerging industries; the health and
well-being of Australian society; the understanding and management of the environment; and the
development of ecologically sustainable practices and industries.
There would be strong preference for proposals that fill major gaps in the research currently funded
under the CRC Programme
The challenge is to ensure that the establishment of a CRC and the resulting cooperative interaction will
result in new research, that would not otherwise have been undertaken. The CRC research programme
should constitute a real addition to, and enhancement of, existing research.
The research must be considered to be of a high quality and world class when assessed by peers.
There should be an emphasis on leading edge technologies that can assist Australian industry to become
more innovative, competitive and productive
The research conducted in the CRC should result in outcomes of benefits in the hands of research users,
the participating industry sector and Australia’s sustainable economic and social development.
For users in the public sector, outputs may include an enhanced understanding of environmental issues
to support environmental or renewable resource management and decision support systems for
improved delivery of health services.
For industry-focussed CRCs, the outputs are generally in the form of innovative products or production
technologies, and also importantly whole new industries..
Strategy for The utilisation and commercialisation strategy should also include methods to:
utilisation and · Improve researchers’ and students’ understanding of the utilisation and commercialisation process;
commercialisation of · Monitor the needs and capabilities of the user sector(s);
research outputs · Monitor relevant alternative and competitive developments world-wide;
· Facilitate the continual diffusion of technology and knowledge to the wider user community; and
· Enhance SME involvement, including technology transfer to, and spin-off, of SMEs.
Education and Applicants should give detailed consideration to developing innovative approaches to graduate
training education and training. Education and training programmes should be designed to meet the needs of the
user sector.
In designing education activities, applicants should ensure that students in the CRC receive a broad
range of experiences and skills development. These programmes should be aimed at enhancing their

117
Cohen, Florida, and Randazzese, "Industry and Academy: Uneasy Partners in the Cause of Technological Advance.", p. 187

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Evaluation of the CRC Programme 2003

Selection Criterion Directions/Constraints

acceptance by the user sector, and consequently their employment prospects.
Collaborative CRCs shall ensure that they interact effectively with SMEs in their sector. CRCs should develop a
arrangements strategy to ensure that these businesses have access to their research and training activities.
The strategy should specifically address SME involvement in the CRC through direct or indirect
participation and through involvement in commercialisation, technology transfer or utilisation of
research outputs, including where appropriate the spin-off of new SME companies. Milestones should
be identified as a basis for performance monitoring.
The proposed CRC is required to address the issue of international linkages and indicate how proposed
linkages would contribute to the objectives of the CRC.
Resources and It is anticipated that the average amount of Centre funding may be around $3 million per annum, while
budget the existing flexibility in size and duration will be maintained..
The Government, through the programme, will provide a maximum of fifty per cent of the total cost of
establishing and operating each CRC.
The amount of CRC Programme funding provided to existing CRCs amounts, on average, to about one
quarter of the total costs, ie for every dollar provided by the programme, more than three dollars of
resources are contributed by the participants.
The CRC Committee will examine the proposed leverage on the programme funding sought in the
application, expressed as the ratio of the total contributed resources budgeted for the proposed CRC to
the programme funding sought from the Commonwealth.
Contributions may be provided as cash and/or ‘in-kind’ resources. The provision of an appropriate and
adequate amount of cash is regarded as highly desirable. The cash available per full time equivalent
researcher is seen as a useful indicator in this regard.
It is expected that industry’s commitment will continue to increase, particularly for the larger and
established industries, and those industries which have a long standing association with the programme.
Funding will be available for up to seven years, but shorter periods will be considered where appropri-
ate.
Management There needs to be clear lines of responsibility and accountability linking the various participants.
structure All core participants will be individually required to enter into the Commonwealth Agreement.
Performance The business plan should include an evaluation strategy that identifies its particular programme
evaluation objectives and milestones (identified targets), and the performance measures that will be used to
measure performance against them. The application should also outline the ways evaluation will be built
in to the management and decision-making processes of the CRC.

There is a tendency in submitting proposals in this environment to ensure that the bid
addresses all selection criteria, and the document is worded in such a way that each
criterion is covered off. Proponents will have an incentive to identify “Collabora-
tors” to cover particular criteria – whether they have worked with them previously
(and whether they really have an intention of working with them if a tender has been
successful). Some collaborators are included for minimal time simply to include the
capability.
While there is considerable detail in eligibility and selection criteria, there is, on the
other hand, a great deal of scope for interpretation of the intent of Programme objec-
tives by industry and by applicants – especially as they are all prefaced with the term
“to enhance”.
There is a concern that a system of “pattern bargaining” has emerged directed by
advisers and consultants where applications, following a relatively standard template,
are written in such a way that they will always meet the Programme objectives and
selection criteria. Truly novel and innovative approaches may not be submitted or be
dropped from the assessment process because they fail to meet specific criteria.
The greater the scope for interpretation of objectives, and the more extensive the
specificity of the guidelines, the greater will be the opportunity to game the system.
It is a credit to the Expert Panels that they can work through the vast amount of
material they are presented with and exercise their professional judgement to identify
the meritorious proposals. However, it would be a benefit to all concerned if the

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rules were simplified and only the information necessary to make a decision were
prepared and submitted.
Notwithstanding the detail in the Selection Criteria, the decisive factors for assess-
ment and proposal selection should, in all reality, be what an application will achieve
in relation to the CRC Programme mission and objectives. This means establishing a
credible linkage between research, education, technology transfer and collaboration
activities and results from an end user perspective – defined in terms of adoption,
application and use. This requirement should set the CRC Programme apart from
general research funding programmes.
It is therefore suggested that the balance be restored between objectives and selection
criteria, with a greater emphasis on meeting the mission and objectives of the Pro-
gramme. Selection criteria should cover off the more administrative matters such as
eligibility and the capacity to deliver what is proposed. These issues are canvassed
below.

5.5 Redefining Objectives

The Evaluation has been undertaken by addressing a number of specific matters
identified in the Terms of Reference. These formed the basis for reporting in Part I of
the Report and were:
Contributing to Australia’s economic growth, social well-being and environ-
mental outcomes.
Contributing to Australia’s public and private industrial research capacity in the
areas of national need or global opportunity.
Producing research that is of an excellent standard and that would not have been
undertaken otherwise.
Adding to the nation’s intellectual property and its commercialisation or utilisa-
tion.
Enhancing collaboration among public and private researchers, and between
public researchers and commercial or community interest.
Increasing the proportion of public researchers who are commercially oriented.
Upgrading the innovative capacities of Australian business enterprises.
These items are, in effect, statements of intent. They reflect in large measure the
tenor of the changes and evolution in the form of interactions between the public and
private sectors in industrial research. They require some adjustment in the light of
observations, conclusions and recommendations made earlier in the Report. In
particular,
Collaboration is not of itself an objective – it will be the result of achievement
of other objectives
There is a need to include a specific education objective to reflect the intent of
the Programme from the point of view of both research providers and users
The statement about research that “would not have been undertaken otherwise”
is not an objective – it is a constraint
The term “applicable” is added to convey a message about research application.

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The proposed objectives, with comments relating to purpose, are provided below.
Figure 14: Proposed CRC Objectives
Proposed objective Interpretation

Contributing to Australia’s economic growth, This provision is already included in the Programme
social well being and environmental out- Guidelines. Raising it to the level of an objective
comes would recognise its importance and focus attention of
applicants

Developing Australia’s public and private This relates specifically to both public-private
industrial research capacity in the areas of partnership in industrial research and consistency with
national need or global opportunity National Research Priorities, Action Agendas, and
various industry and environmental policy objectives

Producing applicable research that is of an High quality research is the basis for sustained
excellent standard innovation in public programmes, industrial processes
and practices, and in the creation of new businesses
based on the commercialisation of research

Adding to the nation’s intellectual property This focuses directly on technology transfer, commu-
and promoting its adoption, application and nication and commercialisation through business
use in businesses and public programmes development in existing and new businesses

Producing graduates with skills, knowledge This objective is intended to stimulate a broader
and experience in the application of research experience in education and training, involving
in a national, industry and/or business external supervisors and teachers, and in major
context. cooperative, user oriented research programs. Refer-
ence to skills development encompasses involvement
of the vocational education and training (VET) sector.

Upgrading the innovative capacities of This is taken to mean rasing the capacity of an
Australian business enterprises enterprise to effectively manage the innovation
process. This has as much to do with applying existing
technologies in new combinations as it does the
acquisition of radical or breakthrough technologies. It
has a specific application to SMEs and NTBFs

The work carried out for Part I of the Report provides a substantial background of
material to assist in creating expectations in relation to performance against the
objectives.
Recommendation
II-2. The Objectives of the CRC Programme be redefined as follows:
• Contributing to Australia’s economic growth, social well be-
ing and environmental outcomes
• Developing Australia’s public and private industrial research
capacity in the areas of national need or global opportunity
• Producing applicable research that is of an excellent standard
• Adding to the nation’s intellectual property and promoting its
adoption, application and use in businesses and public pro-
grammes

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• Producing graduates with skills, knowledge and experience in

the application of research in a national, industry and/or
business context.
• Upgrading the innovative capacities of Australian business
enterprises
The objectives stated in these terms provide a focus on achievement, results and
outcomes and provides a sounder basis to position and market the Programme. This
is discussed below.

5.6 Positioning of the CRC Programme

Drawing on the discussion earlier in this Part of the Report, the CRC Programme
should move away from being seen as a grants and research funding programme to a
strategic investment programme directed towards investments in collaborative (incor-
porated, unincorporated, or otherwise) partnerships between research providers and
research users to deliver outcomes that are capable of adoption and use in a commer-
cial or public application.
Those partnerships may be established as public private industrial research partner-
ships between research providers and users or as business development partnerships
involving research providers, users and/or technology investors.
Emphasis on investment carries with it a connotation that the funds provided will
achieve outcomes and will deliver benefits and returns over time – be they economic,
environmental, social, industry or business. It is critical that the Programme move
away from the traditional “funding” model under which financial assistance is pro-
vided for projects that meet selection criteria.
As the CRC Programme is operated on a devolved basis, that strategic interest is
reflected in the way in which the Board of the CRC manages the investment. The
Commonwealth steps back and allows the Board to get on with the job, relying on
periodic performance reporting relating to probity, results and achievement – as well
as meeting needs for public accountability.
The repositioning would address industry concerns over Programme performance and
build on the commitment that has been made by universities, research organisations
and the CRC industry in delivering successful outcomes. It would also clarify issues
in relation to the entry of “public good” CRCs into the Programme and encourage
researchers to seek more appropriate arrangements for purely research driven propos-
als. These arrangements might include the creation of research centres and institutes
with specific research missions and funding arrangements outside the CRC frame-
work.
The positioning should build on the tri-modal framework that has evolved over the 12
years of the Programme’s operation and discussed in Section 4: . The dominant view
expressed by stakeholders in the Programme is that the relevance of the Programme to
industry and to other end-users, including technology investors, would be improved if
greater scope were provided for these three distinctive missions to be pursued. This
implies that relaxing the various constraints imposed by the current arrangements

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should allow the tri-modal structure to become more efficient and effective than it is
at present.
A relaxation of some requirements is a necessary but not a sufficient condition for
improving the effectiveness of the CRC Programme. Two major complementary
changes are also required.
First, the shift to a programme that aims to generate well-planned paths to
market and end-use rather than to simply assume that promising discoveries and
technologies will be adopted/commercialised by CRC partners or other entities.
Second, the establishment of a specifically designed CRC investment vehicle118
for carrying out these end-use focused missions as investment projects. In many
cases, the path to market and the investment-based approach will be provided by
industry-led initiatives that bid for CRC grants in partnership with public sector
researchers.
When there are no existing industry partners the onus will be upon the CRC’s propo-
nents to provide a convincing case for investment that lays out why forming new
businesses is important for Australia and how this will be achieved. In this invest-
ment-based approach the planned R&D is the means to an end not an end in itself.
This approach allows for managing the uncertainty over the R&D and the eventual
end-user uptake. It differs from current CRC funding awards by placing a greater
emphasis upon the planned process for achieving stated end-use objectives and upon
accountability in meeting these objectives.
Recommendation
II-3. The CRC Programme be clearly positioned as an “investment”
programme that is expected to deliver outcomes in the form of na-
tional economic, social and environmental benefits, the improved
competitiveness of Australian industry, and/or the creation and sus-
taining of viable new technology based businesses.
The positioning of the CRC Programme in this way is entirely consistent with the
advice and information reported in Part I in relation to the approaches of the CSIRO
and other public research agencies to take a more strategic involvement with CRCs.
It is also consistent with the approaches of State governments who are working
towards a “whole of government” approach to CRCs.

118
The investment vehicle would be a specifically designed corporate entity that overcomes the complexities and unintended
effects of the corporations and taxation laws – as discussed in Section 7.3 below. ,

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6: CRC Selection Criteria and Procedures

In this Section of the Report the Following item in the Terms of Reference is ad-
dressed:
Selection criteria and procedures
How should the selection criteria and procedures (including the collaboration model implied in
these) be modified to give effect to any proposed change to the objectives for the Programme?

In the previous Section it was argued that selection should be more closely related to
achieving the objectives of the Programme and that the Selection Criteria should be
scaled back.

6.1 Basis of Selection

As indicated, selection of a CRC “investment” should be based on an appraisal of the
extent to which a “proposal” will achieve the objectives of the Programme. The
collaboration should be genuine and add value
Inevitably, and despite extensive checking and exhaustive examination, the Com-
monwealth has to place a very high degree of trust in the capacity of applicants to
achieve what they proposing. This in turn, relies heavily on an assessment of the
capacity of the proposed CRC partnership to deliver.
Capacity to deliver will involve an assessment of:
The Credibility of the proposal - in terms of its identified results (ends) and the
way in which it intends to go about achieving them (means).
The Reputation of the Researchers - in terms of their knowledge, skills, and
experience and their track record in collaboration.
The Integrity of the nominated governing Board - in terms of its capacity to
provide strategic direction and fulfil the obligations of good corporate govern-
ance.
The Leadership and management capacities of the nominated Chief Executive
Officer and executive team.
The Commitment of all involved in the proposed CRC to achieving the intended
outcomes.
These criteria are reflected in the present selection criteria, but they do not receive
prominence. What is proposed is to turn the process from checking against selection
criteria to one that centres on the “business case”. That is, proponents need to
convince the Commonwealth of the extrinsic and intrinsic merit of the proposal in
terms of its ability to deliver results that reflect the mission and objectives of the
Programme – within the limits of the resources that are and will be available.
Inevitably, the selection will involve a high degree of judgement by the expert panels
and the CRC Committee. In this regard, the membership of expert panels may need
to be refocussed to align more closely with the industry as well as the science and
technologies in which the CRC “investment” is being proposed.

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Recommendation
II-4. The basis of selection should be, first and foremost, an appraisal of
the strength and value of of the collaboration and the extent to which
the Proposal will achieve the objectives of the Programme.
Aspects of the selection criteria are canvassed below.

6.2 Investment appraisal

Under the present arrangements there is no requirement or strong recommendation to
provide a formal investment appraisal as part of the proposal. The suggested content
of the business plan submitted as part of the proposal does highlight the relevance of
quantitative justifications but it does not place a major priority on this aspect of the
investment proposition.
An investment appraisal identifies the benefits that the CRC proponents plan to
generate, the costs of generating these benefits and (most importantly) the uncertain-
ties and risks involved. In a commercially oriented CRC there is a reasonable
expectation that these benefits can be quantified.
Given the focus of the CRC Programme on investing in “well defined objectives that
address a specific community and/or industry need” and that “the proposed outcomes
of the CRC will make a significant contribution to Australia’s sustainable economic
and social development” formal investment appraisals, provided that they incorporate
risk assessments would be advantageous.
It is pertinent that the recently published report from the House of Representatives’
Inquiry into Business Commitment to R&D in Australia has recommended that risk-
assessment based investment appraisals be incorporated into the ‘R&D Plans’ that a
company is currently required to prepare in order to be eligible for claiming the R&D
Tax Concession (Recommendation 26).119
The requirement or recommendation to submit a formal investment appraisal should
be defined with care in order not to decrease the potential agility of the CRC Pro-
gramme in being able to respond quickly and flexibly to emerging opportunities and
challenges. The sophistication, and therefore the effort required, to quantify the
intended benefits relative to costs should be proportional to the size and duration of
the funding being sought.
The greater the funding sought the greater the investment risk faced by the CRC
Programme in deciding to fund this investment. Consequently, the greater the weight
put by the CRC Programme’s expert advisors and Programme management staff on a
strong, formal, investment proposition.
Recommendation
II-5. The selection and renewal of CRCs should give preferential treat-
ment to robust and compelling ‘investment propositions’. These pro-
posals should detail the path to market or other end-uses by quantify-

119
House of Representative Standing Committe on Science and Innovation Australia. Parliament, Riding the Investment Wave:
The Case for Increasing Business Investment in R&D (Canberra: Parliament House, 2003)

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ing, to the greatest extent possible the costs involved in attaining

these objectives, the scope, extent and estimated value of benefits to
be obtained, the anticipated risks faced. The proposal should clearly
identify the feasibility, desirability and practicality in relation to im-
plementation – from an end user perspective
The emphasis in the application process should shift to giving the proposal’s propo-
nents an opportunity to ‘sell’ their investment proposition via imaginative free-form
proposals rather than try to fit their vision into a highly structured form with a 25 page
business plan attached.
In Part I of the Report it was recommended that the selection process be designed as a
two stage process: a Preliminary Proposal and a Full Proposal.
Consistent with the intent of the two-stage process, the Preliminary Proposal should
consist of the investment proposition in a short Executive Summary together with
supporting information relating to matters such as:
Partnership/joint venture description
Indicative demand/need and how the proposal is to address that demand/need
Research undertaken to date and planned research
Indicative risk-return analysis
Indicative financial data
Proposed joint venture management and operational framework
Basis of the legal and contractual arrangements.
Recommendation
II-6. In line with the priority placed upon robust and compelling invest-
ment propositions the Preliminary Proposal should consist of the in-
vestment proposition with a short Summary and indicative material
relating to demand/need, research, risk return, finances, operations
and legal/contractual matters
This emphasis on ‘selling’ the investment proposition is in line with the CRC Pro-
gramme’s mission to invest in generating end-uses from R&D.
It is envisaged that at this stage the CRC Committee would contact proponents with
similar proposals with a view to encouraging parties to collaborate and develop a
stronger application.
Having identified potential investments, the appraisal process would examine a full
proposal against the following criteria. These criteria would be communicated to
proponents:
Management and research team – proponents need to be committed, out-
standing, creative and resourceful and driven to deliver a sustained outcome;
evidence of capacity to work together in defined areas of responsibility
Wealth creation (for industry collaborations and business development propos-
als) – assessing the impact on international competitiveness, especially in rela-
tion to new and high valued exports; commercial return; potential national bene-
fits and spill-over/externality impacts

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Environmental and social return (for national benefit proposals) – nature and
scale of potential benefits, or of reduced risks or avoided costs; end user benefi-
ciaries; applicability to current or emerging public policy
Capacity building – education and training outcomes; impact on participant
capacity to innovate
End user involvement – extent of commitment by identified end users to adop-
tion and application
Risk analysis - identifying sources of risk and how they are to be managed and
mitigated
Access to and ownership of Intellectual Property – treatment of background IP;
ownership of IP created
Implementation and milestones – a clear and robust plan for research, develop-
ment and implementation, including milestones and key decision points; this
plan would be the basis for monitoring and attestation
These screening criteria, which are heavily oriented towards management, market,
and financial factors, provide the basis for realistic investment appraisal.

6.3 Communication of change

The innovative nature of these suggested changes to the CRC Programme’s objectives
would need to be communicated to Australian businesses, industry and government
departments and agencies. This is in line with the shift from an emphasis on tailoring
funding requests to detailed and highly prescriptive selection criteria to actively
‘selling’ an investment proposition to a potential investor in a more permissive
funding regime.
Recommendation
II-7. The Department of Education, Science and Training should send out
a clear message that the selection and renewal of CRCs will in future
place a priority upon robust and compelling “investment proposi-
tions” in which industrial research is a means to an end - not an end
in itself

6.4 Assessment Panels

Consistent with the investment appraisal approach outlined in this Part of the Report,
it is appropriate that Expert Panels have a focus on assessing the application of the
research. In advocating this approach, it should be taken as given that the science and
technology underlying the application would need to be of a world class standard.
The key role of the Expert panel is in assessing the scope for application in a national
benefit, industrial and business development context. To that end, Panels should have
deep and extensive knowledge and contacts in those areas – from a global perspective.
Knowledge is highly specialised and different across sectors, as argued in Section 4.5
in relation to innovation pathways.
In areas where application is likely to be in the form of public policy and pro-
grammes, capacity to assess the scope for adoption by Commonwealth and State
Governments should be available. In terms of industry expertise, knowledge and

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experience of the application of new science and technology in industrial process and
practices would be appropriate. Expertise and knowledge of research commercialisa-
tion from an international perspective and practice would also be essential.
It is suggested that four Investment Assessment panels be established, based around
the characteristics of the science and technology and characteristics of paths to
adoption:
Information and communication technology.
Health/medical/bioscience.
Environment, agriculture, water.
Mining, manufacturing, infrastructure.
Recommendation
II-8. Four Investment Appraisal Panels be established with a focus on the
fields of investment rather than the science input. The panels should
cover the following specific areas: information technology and com-
munication; health/medical/bioscience; environment/ agricul-
ture/water industries; mining, manufacturing, infrastructure. The
panels be constituted by people with strong backgrounds in research
relating to resource sustainability, industrial application of new sci-
ence and technology, and research commercialisation.

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7: Implementation

In this Section of the Report matters related to implementation are canvassed and
recommendations for change and improvement presented.

7.1 Key Programme design criteria

Much has changed since the CRC Programme started, and indeed CRCs themselves
have been a major flagship in driving such change.
In reflecting on this, it is important to examine the CRC Programme from a general
design and strategic perspective. This means optimising and balancing key Pro-
gramme design features that take into account the characteristics of both the Pro-
gramme itself, and those programmes and organisations with which it is related.
These issues can be addressed from a number of dimensions and perspectives:
Governance – appropriate structures in relation to incorporated and unincorpo-
rated joint ventures. This covers the legal rights, risks, obligations, and account-
abilities of participants, boards, committees, controlled entities, chairs, CEOs
and Visitors. It is reflected in Centre agreements and agreements with the
Commonwealth. Governance is affected by State policies, universities legisla-
tion, corporations law, intellectual property law and taxation law.
Management and leadership – the capacities and capabilities of CEOs, business
managers, research managers and others to build productive and creative coop-
erative partnerships and personal networks in order to achieve the results of the
CRC.
Business and administrative processes and systems – the selection, approval,
resource allocation, governance and monitoring/accountability arrangements
best suited to the needs of the Programme, its objectives and design features.
Critical mass - the scale, scope and focus of CRCs (coverage, overlaps, and
most importantly depth, quality and relevance of the research from an interna-
tional perspective) and the strengths of the CRC model as compared to com-
plementary, and possibly alternative, cooperative and collaborative arrange-
ments, such as Special Research Centres and Centres of Excellence.
Agility - the flexibility given to the players in the Programme. The capacity to
respond to opportunities and issues as they emerge and the speed with which
this response can be achieved (the time required to select, set-up and make sig-
nificant progress both for new CRCs and for projects within CRCs).
Longevity and predictability - expectations of continuity, stability of funding
and long-term financial sustainability.
Up-front planning for technology transfer - the deliberate placement of planned
R&D effort and resources in an industry or policy-related “value chain” that has
the best chance of leading to a measurable economic, social, environmental
benefit (such a path may span pure discovery to knowledge uptake/adoption).
Systemic context - the articulation across, and alignment with, other parts of the
national R&D and innovation support framework (where and how does the Pro-
gramme fit in relation to other public support and assistance initiatives).

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Human capital – the development of people capabilities both via targeted

training and by on the job experience.
CRCs have been selected and have operated for over a decade under a relatively
unchanged set of objectives and framework of rules and procedures/processes. The
above criteria have been used as a basis for recommending reorientation and changes
in Programme design.

7.2 Governance structure

There was a strong view reflected in consultations that CRCs structured as unincorpo-
rated joint ventures generally suffer from a reduced commercial effectiveness. Un-
foreseen circumstances inevitably lead to complications that require referral to the
partners for approval. For example, seven partners mean seven legal departments and
seven opinions on the best way to structure a deal.
Incorporation of CRCs, where proportional ownership is reflected in the equity held
in the company, prevents these issues and leaves the Board free to enter commercial
agreements on a realistic basis, over realistic time frames. The absence of an appro-
priate vehicle to run the “business” of a CRC is seen as a barrier in the evolution of
the Programme.
Many of the highly commercial CRCs have indicated that they are hamstrung by their
current governance and ownership arrangements. Some have argued that they could
grow bigger, pulling in more industry contracts and constantly finding new partners,
with different funding and governance structures. Others have argued that the current
model, which tends to result in large numbers of shareholders with competing inter-
ests, pushes them too much towards medium-risk, lower-return work. A research
organisation that tries to manage the needs of 18 or 20 shareholders, many of whom
are also the organisation's clients, is simply not effective.
There is, on the other hand, a view that the unincorporated joint venture model has
proven relatively robust and viable for most CRCs. It has both significant advantages
and disadvantages. It has allowed in some instances scope for some (larger) partici-
pant stakeholders to significantly influence operating behaviours, and so exercise their
strategic imprint and resource interests over CRC decisions, especially where there
are significant competitive interests, or commercial aspirations and potential rewards.
The incorporated model (typically a tax exempt Company limited by guarantee) has
also proven to be a robust model, but this too has some disadvantages. The interplay
of all factors above has meant that, taken as a whole, too many CRCs have encoun-
tered far too many unnecessary “barbed wire fences” that have hampered efficiency
and ‘commercial’ effectiveness.
In these circumstances there is an urgent requirement for an entity that is appropriate
to the CRC Programme – one that is sufficiently flexible to allow for an effective
partnership, but solid enough to provide the basis for a long-term commitment and
transformation into a more permanent entity. The entity, in its creation, must be
unconstrained by the unintended effects, constraints and disincentives that arise form
the application of the taxation and corporations law.

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Any changes or enhancements to the CRC entity structure would need to recognise
that CRCs obtain substantial resources from universities, the CSIRO and other
publicly funded research organisations which will wish to ensure that their interests
are appropriately managed and accounted for. Moreover, given the “in kind” nature
of those resources, arrangements need to ensure that potential conflicts of loyalty and
commitment are effectively managed.

7.3 An appropriate CRC “entity”

CRCs when working with the professional advisory industry have appropriately
asked: “what’s possible, and what is the optimal way of structuring our affairs within
the current national legislative framework?” With the benefit of hindsight, it may be
better to now ask: “what is needed to make things easier and simpler for all”.
Under the present arrangements achievement of mission and objectives, and the
opportunities to engage industry participants, is frustrated by complexities in design-
ing the organisation and administrative framework. These relate to provisions in the
taxation and corporations law. They are canvassed in detail in a Working paper
prepared during the course of the Evaluation.
Desirably, a CRC should be established and managed in a framework that exhibits the
following characteristics:
It provides for the effective involvement and engagement of participants.
It is tax exempt in its simplest form – and Boards and managers know what it
can/can’t do by way of commercial activities, such as start-ups or consulting in
order to retain that status, using income to sustain its primary research purpose,
whilst also being “easier to do business with”.
Be set up so as to sweep aside current disincentives to incorporation, and build
in greater incentives for companies to invest in CRCs eg by removing present
tax inefficiencies.120
Serve as a simple ‘apprenticeship entity’ ie an enterprise that has migrated to
incorporation; has retained its public/private sector mix of interests as ‘mem-
bers’ with appropriate representational rights; yet is protected from undue com-
plexities (eg income tax, defined areas CGT) until it reaches a performance level
in revenue or other tests.
Provide uniformity such that if CRCs seek to merge, they do so from the same
standard.
Overall, reinforce and strengthen the ability of ideas/people to bridge the gap
between excellent research and its successful uptake via a “path to use” by in-
dustry or other end-users.
From a management (rather than a legal) perspective, Programme mission and objec-
tives should drive structure – not the other way around. In the following paragraphs
a range of options is presented designed to facilitate the creation of appropriate
implementation arrangements. They range form the minimalist to the more far
reaching.

120
They could exit a CRC with a share of funds, and could retain/dispose of interests in start-up companies.

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A minimal option - a generic agreements “tool-box”

One partial solution is to create and maintain a comprehensive “tool-box”121 of
generic documents suited to further customisation to cover all aspects of typical CRC
activities. Creation of such a “tool-box” of examples could be initiated and main-
tained by the CRC Association to the benefit of its members. It is understood that
CEOs of CRCs have taken actions in establishing such a “tool-box”.
This is a minimalist option, and it would go some way to assisting CRC Boards and
CEOs manage in the complex environment. It is not, by any means, a “solution” to
the problem – the problem still exists.

Developing greater awareness and coordinated help from the ATO

Greater specialist knowledge of CRCs by the ATO is highly desirable. A single point
of contact or small unit expert on CRCs would be able to assist in consistency and
clarity of advice. Greater communication between the ATO and the CRC Association
would also help.
Again this option may provide greater clarity, but it would not resolve the problems
inherent in the law, particularly the taxation law, in relation to CRCs.

Expand the provisions relating to “scientific institutions”

A further option is to expand and clarify the law covering the tax-exempt status of
“scientific institutions”122 via legislation and regulations and/or general tax rulings123.
This is the model under which a majority of presently incorporated CRCs operate as
companies limited by guarantee and tax exempt (per private tax rulings), and from
which significant experience has been gained.
Achieving the preferred model would require addressing some of the present tax
inefficiencies and uncertainties for tax paying CRC participants, systematically
addressing the reasonable objections to incorporation by some stakeholders, and
finally including incentives for tax-paying companies to invest in CRCs.124

New CRC Specific Legislation

An additional option is for the Commonwealth to consider legislating a clearer
highway for CRCs, and at the same time consider how to entice greater industry
interest and stronger engagement with CRCs. Legislation specific for CRCs is not

121
To include for example updated templates for Agreements between the Commonwealth and JV Participants, Agreements
between JV participants themselves, model Company Constitutions that have been adopted by CRCs Cos and received ATO
approval as not for profit “scientific institutes”, indicative structures and licensing/transfer documents; non-disclosure agree-
ments, MoUs, .materials transfer, service agreements etc.
122
Refer to Section 50-5 (item 1.3) of the Income Tax Assessment Act 1997 (Tax Exempt Scientific Institute). The primary
activity of the Company must be non-profit as written into its constitution. Company must behave as a scientific institution with
expectations that earned revenue is for the purposes of self-funding and without any intent or actual distribution of benefit to
equity holders. Disposal of assets on wind-up of the Co must be to like non-profit entities. Typically Co tax exempt non-profit Co
is limited by guarantee rather than limited by shares and has members rather than shareholders.
123
Limited examination of the ATO and Attorney Generals data bases indicates only one public tax ruling regarding CRCs,
which is a class ruling covering tax status of short-term summer scholarships (CR 2003/4). There are public rulings covering tax
exempt, not for profit entities eg TR2000/11 that relate to charities under Subdivision 50-B of the Income Tax Assessment Act
1997 and these give scant coverage of “scientific institutions”.
124
There is precedent in the exclusion from “claw-back provisions in respect of the R&D Tax Concession.

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over kill - given the Commonwealth relatively large and increasing investment in
CRCs.125
As a precedent example, Pooled Development Funds (PDF) are established under the
Pooled Development Fund Act 1992 to encourage early stage investment in advanced
technology companies. PDFs have specific tax provisions.
In the renewed vision of CRCs being an investment programme rather than a grants
programme, CRCs could be legislated as special-purpose entities. This would require
CRC-specific and related legislative changes.126 It would not necessarily preclude
current options, but would make one model far more attractive than the current choice
between two broadly unsatisfactory models operating under current legislation.
A number of alternatives exist to create such entities, either specific to the CRC
Programme, or more broadly to the “not for profit scientific institutions” category eg
MNRF related or other activities with significant Commonwealth funding.
Recommendation
II-9. The Department of Education, Science and Training explore the
feasibility of legislation for CRCs to be established with a specific
status. The objective would be to resolve uncertainties and complexi-
ties in corporate and taxation status and provide a sound basis for a
public-private research partnership. The legal status could also be
relevant to other public-private research partnerships such as
MNRFs and Centres of Excellence
The entity must facilitate the involvement of universities and publicly funded research
organisations by allowing for the effective contribution of in-kind resources. Insisting
that CRCs be incorporated will not solve or resolve many of the complex problems
that have emerged. However, failure to take action will allow a situation to persist
that makes the operation and implementation of the CRC Programme complex and
expensive, creating a great deal of work for the taxation and legal profession but with
not much value added to the outcomes.
With a greater focus on investment and new business development in the CRC
framework it will be all the more necessary to have an entity framework that facili-
tates the commercialisation of research from a tax-exempt institution and its transition
into a corporate environment.

7.4 Board structure and membership

The 2002 Guidelines suggest that CRCs adopt a structure headed by a governing
board. The Guidelines state:
Boards must have independent chairs. Board members should include nominees of
the main participating research organisations in the CRC, but the majority of board
members should be drawn from the industry or user participants, or be independent
members ie external to the contributing parties. While it is recognised that it may not

125
On a annual basis, CRCs cost about 1/3rd of the revenue forgone under the R&D Tax Concession.
126
Other than S73B clawback and partnership provisions, CRCs appear to have no other mention in tax legislation, and none in
the IR&D Board Act (1986)

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be practicable for the application to identify the full complement of board members it
is required that a general board structure be identified.

The 2002 Guidelines provide that the board is accountable for the management of the
CRC and setting overall policies, research directions, for utilisation, technology
transfer, commercialisation and budgets and for overseeing the executive. Selection of
board members should take into account the board’s responsibility for guiding the
CRC in such a way as to maximise outcomes in terms of the CRC Programme’s
objectives.
It is of interest to note that although membership of a Board might exercise control
over the activities of the entity, it does not necessarily provide a capacity to influence
the activities of the entity on a day to day basis. Many participants in CRCs do not sit
on boards but seek to influence the activities of the entity through other means.
Much of the debate over the effectiveness of Boards in the CRC context is concerned
with its role and function. In this regard the strengths and weaknesses of participant
and independent directors were canvassed during the consultations and discussions in
the Evaluation, following the patterns of thinking in the corporate environment.
The size and membership of a CRC Board was a matter raised continuously through-
out the Evaluation. The principles and requirements of good corporate governance in
relation to board memberships and responsibilities are well understood within the
system. However, these observations need to be put in the context of the “not for
profit” nature of CRCs and the relatively small scale of CRC operations.
In the “not-for profit” sector generally, organisations are characterised by strong and
active boards; in some the board actually runs the organisation. With the growth of an
organisation and the professionalisation of senior management roles, particularly the
CEO, boards need to remain active if not for the only reason that participants have a
strong personal commitment to the organisation’s cause. Thus:
Precisely because the non-profit board is so committed and active, its relationship
with the CEO tends to be highly contentious and full of potential for friction. Non
profit CEOs complain that their board “meddles”. The directors, in turn, complain
that management “usurps” the board’s function. This has caused an increasing num-
ber of non-profits to realise that neither board nor CEO is “the boss”. They are col-
leagues, working for the same goal but each having a different task. And they have
learned that it is the CEO’s responsibility to define the task’s of each, the board’s and
his or her own.127

The key to making a Board effective is not to talk about its function, but to organise
its work. In this respect, successful Boards have a number of working committees
dedicated to addressing specific functions. This involves a complex cultural change
that will only occur through a targeted process, with the leadership of the CEO and
Chair of the Board being absolutely critical. Building trust and mutual respect through
whatever processes necessary have to be primary goals.
Boards must also be manageable. It is common practice for Boards to be small with
membership of around seven. It would be appropriate, however, for Boards but with

127
Peter F Drucker, The Essential Drucker: Selections from the Management Works of Peter F. Drucker (New York: Harper
Business, 2001), p. 45

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Committees dedicated to functions relating to finance, research, education, communi-

cation and commercialisation.
Recommendation
II-10. Contracts specify that CRCs be governed by a relatively small Board,
consisting of around seven members, committed to the objectives of
the CRC; membership include a majority of research users; the gov-
ernance structure include appropriate functional committees.
Following examples set by Rural Research and Development Corporations, Animal
Health Australia and Plant Health Australia, arrangements should be put in place for
regular meetings of all stakeholders as a means for holding Boards accountable.

7.5 Agreements and contracts

Responsibilities and accountabilities of a CRC are covered in an Agreement with the
Commonwealth and in an agreement among the participants in the CRC. The Com-
monwealth Agreement is negotiated following notification of approval.
This process is unnecessarily cumbersome. Moreover, proponents should not be able
to significantly alter the basis of their investment proposal in negotiation of an agree-
ment with the Commonwealth. The investment proposal would be at the centre of the
Agreement
Recommendation
II-11. The Commonwealth Agreement with a CRC entity should be based
on the CRC Investment Proposal as approved by the CRC Commit-
tee.

7.6 Management and leadership

In the current operational environment CRC managers have to work through the
values, expectations and motivations of science, business and executive cultures.
This, in addition to a requirement to manage significant intellectual property and
commercial issues. It has required CEOs to have a much stronger “general manage-
ment” focus. It is a management challenge of the highest order.
While CRC applications are generally couched in terms of collaborative programmes
and strategic outcomes, there is usually little attention paid at the outset to the part-
ners’ underlying culture and performance drivers, many of which are not inherently
collaborative in nature. There is a need to manage a shift in culture from one of tight
funding and support for individual research programmes to a more coordinated team
approach to the achievement of some major targets and more flexibility in the re-
source allocation model that would make such outcomes possible.
Such change won’t simply occur as a result of project agreements and is probably one
of the most complex challenges facing a new CRC CEO. CRCs need to be vision-led
and this needs to be brought about through a specific process with corresponding
target outcomes, timelines and measures. Planning and implementation of changes
from allocated project support to a more strategic use of resources has to involve, and

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have the support of, participants and be phased in over a manageable timescale that
takes account of original expectations, student programmes and staff employment.
Management and organisation theory indicates that project based and matrix organisa-
tions work best when there are “free resources” in the system. When resources are
tightly controlled, the task of management is overwhelmingly directed towards
managing a budget – sometimes to the detriment of ensuring that outcomes that
involve interpersonal cooperation and collaboration are achieved. This is reflected in
the CRC system with the attention given to, and the complexity inherent in, costing
and managing “in-kind” contributions.
Precisely because of the centrality of the management and leadership to the success of
a CRC, it is vital that the profile of the person who is going to be CEO of a proposed
CRC be clearly defined in the preparation of the investment proposal that forms the
basis of the CRC application. Preferably, the identity of the proposed CEO should be
known, and party to the Proposal.
Recommendation
II-12. The position profile of the CEO of the CRC be clearly identified in
the CRC proposal. Where possible, the CEO should be nominated in
the proposal.

7.7 Critical mass

Critical mass is a term that creates a great deal of confusion. Often it presupposes a
requirement for formalisation in structural and administrative arrangements to gain
access to, and facilitate the utilisation of, key resources of facilities, equipment,
people and other resources.
A CRC that had a global orientation, in an industry that involves substantial commit-
ment of costly complementary assets, that draws together a range of scientific and
science/engineering specialisations and competencies, and includes specialised skills
in relation to adoption, application, and use of research outputs would be expected to
require a greater commitment of resources than a group of related CRCs with a
national orientation focussing on specific and relatively well compartmentalised
problems and issues. In the former case a structured “formal” organisation would be
appropriate, whilst in the latter a loose coalition among participants would work.
During discussions and consultations in the Evaluation, suggestions were made for a
category of “Super CRCs” that would combine the resources of existing CRCs and
other entities into an overarching management and organisational framework. A
specific proposal for an Australian Metals Manufacturing Centre of Excellence,
involving the CRC for Cast Metals Manufacturing, the CRC for Intelligent Manufac-
turing Systems and Technologies and the CRC for Welded Structures is currently
being canvassed.
The proposal is reflective of the evolution of the CRC Programme, as discussed in
Section 3. It reflects the influence of a growing global orientation in manufacturing
and the significance of international value chains to build economies of scale and
scope into operations. It is not the task of the Evaluation Team to assess the benefits,
costs and projected returns from what is essentially an investment proposal. The

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threshold question is the “value add” of the additional investment in management over
and above what can be achieved through a partnership approach.
Recommendation
II-13. In relation to the proposed “super CRCs” the level of programme
funding to be made available should be based on the investment pro-
posal and the “business case” rather than representing a “special
case”

7.8 Agility and flexibility

Relatively high-risk investment proposals are best presented as a CRC bid involving
successive stages of investment with movement to the next stage dependent upon
performing well in the current stage.
In such ‘high risk’ cases a CRC proposal should consist of a set of options that the
CRC Programme may or may not wish to exercise depending upon the progress made.
This provides flexibility for both the proponents and the Commonwealth to undertake
exploratory high-risk investments aimed at innovative end-uses of R&D whilst
limiting the exposure of the CRC Programme to the risks generated by a long-term
funding commitments in such circumstances.
Recommendation
II-14. The CRC Programme should be open to investment proposals based
upon presenting a sequence of options for investment with progress
determined on the basis of success. This type of investment proposal
will encourage exploratory propositions with high-risks but high po-
tential returns by providing flexibility over how far the venture
should proceed

7.9 Longevity and predictability

Given that the intention behind creating a CRC is to achieve an outcome over a
defined time period, it is important that participants understand and appreciate that
there will be an inevitable wind-down This applies to CRC “renewals” which are
understood to be embarking on a new research programme. It follows that each CRC
Proposal should have a clearly defined strategy for sustainability and a process for
“exit” after Programme funding terminates
An understanding of “exit” sets the CRC system apart from research funding pro-
grammes that create an expectation among researchers of ongoing grant assistance
and support. Exit from a CRC can include the formation of an organisation that has
established commercial sustainability, transformation into a new entity, or establish-
ment as an independent research centre that attracts ongoing support from participants
including businesses and Commonwealth and State governments on the basis of its
expertise, credibility and reputation.
The purpose and objectives of the CRC Programme are inconsistent with ongoing
support for research into “public good” activities. CRCs that require ongoing or
indefinite Programme support, and are not involved in adoption and application of
research, should not be admitted to, or continue within, the Programme: to the extent

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that the research merely has potential to deliver public benefits but cannot demon-
strate a path to adoption, application and use by the participants in the CRC, or other
clearly identified end users, funding should be sought from other programmes.

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8: Funding and Accountability Arrangements

This Section of the Report addresses the following matter in the Terms of Reference:
Funding arrangements
How should funding arrangements (eg, size and duration of grants, funding for 'new from existing'
CRCs in successive rounds) be modified?
Accountability framework
How should the accountability framework (including reporting and review processes) be
modified to ensure the achievement of any proposed change to the objectives for the Pro-
gramme?

8.1 Size of investment

The Guidelines for the 2002 CRC Round advised potential applicants that:
As in previous rounds, it is expected that CRCs emerging from the selection process
will vary considerably in size. Selection will be based on merit and equal considera-
tion will be given to proposals for large and small CRCs, provided the objectives of
the programme can be achieved. The amount of funding provided to CRCs in the last
round ranges between $1.6 million and $3.14 million per annum, averaging $2.45
million per annum. Additional funding provided for the expansion of the CRC Pro-
gramme will enable an increase in grant size. It is anticipated that the average amount
of Centre funding may be around $3 million per annum, while the existing flexibility
in size and duration will be maintained. To the extent that it is consistent with the ob-
jectives of supporting quality research, there may also be an increase in the number
of CRCs supported.

In the 2002 selection round, CRCs were approved across a range of $12m to over
$32m in Commonwealth funding for the duration of the CRC.
This spread is consistent with a “portfolio” perspective, under which the CRC Com-
mittee would support a range of large and small investments and investments spread
between the three CRC categories identified in Section 4.

8.2 Leverage
In public announcements and Programme publicity much is made of the way in which
the Programme has “leveraged” private research and development funds. This
leverage includes both cash and so-called “in-kind” contributions. In all reality,
however, leverage is simply a means to an end – not an end in itself. There are also
substantial difficulties in establishing a realistic value for “in kind” contributions.
Under present Guidelines the Government, through the Programme, will provide a
maximum of fifty per cent of the total cost of establishing and operating each CRC.
Currently, the amount of CRC Programme funding provided to existing CRCs
amounts, on average, to about one quarter of the total costs. That is, for every dollar
provided by the Programme, more than three dollars of resources are estimated as
being contributed by the participants.
The CRC Committee examines the proposed leverage on the Programme funding
sought in the application, expressed as the ratio of the total contributed resources

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budgeted for the proposed CRC to the Programme funding sought from the Com-
monwealth. Contributions may be provided as cash and/or ‘in-kind’ resources.
The provision of an appropriate and adequate amount of cash is regarded as highly
desirable, as it increases the flexibility available to the CRC governing board to
optimise its resource allocation decisions. The cash available per full time equivalent
researcher is seen as a useful indicator in this regard.
The extent of leverage that is necessary to be successful in winning CRC funding is
being seen as a serious issue for all participants, compounded by the growing market
for research services that has arisen over the last 15 or so years. While the contribu-
tion from participants can be in-kind as well as in funds, the extent of leverage
necessary to be successful is placing increasing strains on participation.
As discussed in Part I, the Evaluation Team is of the view that linking in-kind contri-
butions to “leverage” unnecessarily complicates and distorts the thrust of the CRC
Programme. It is the Team’s view that CRC proposals should be assessed on the
basis of the “investment proposition” not on the leverage of participant funding. There
should not be a restriction placed on the source of that funding, except to the extent
that it be sourced from active participants.

8.3 Supporting investors

It is likely that State and Territory governments will continue to have a strong interest
in making substantial funding contributions to CRC investment proposals. As
mentioned earlier in the Report some State/Territory governments are establishing
funding programmes with the explicit aim of leveraging Commonwealth CRC fund-
ing. This leverage should be encouraged, particularly with respect to the category of
business development CRCs that aim to create new business entities in areas where
none currently exists.
In these situations State/Territory government involvement provides a means of
building critical mass in the prospective CRC partnership to compensate for the lack
of industry partners. No recommendation on this issue is necessary because the onus
is upon the CRC investment proposal’s proponents to persuade State/Territory gov-
ernments to actively participate in the CRC.
Similarly, where a CRC proposal involves a substantial benefit to a Commonwealth
agency in terms of policy and/or Programme impact, there could be a reasonable
expectation that the agency would be involved as a participant. This is evident in
relation to the Greenhouse Accounting CRC, and the Biosecurity CRC, but the
precedent could be extended.
Involvement of Australian venture capital investors as joint venture partners in
business development CRCs should also be encouraged where there is a commitment
on the part of the investor to undertake subsequent commercialisation activity. This
would be appropriate where there is no clearly identified established industry end user
and path to adoption is through new business creation.

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8.4 The role of CRC Boards

It has been argued in previous Sections that the CRC Boards have a central role in the
accountability framework.
A Board of directors performs two important functions for organisations:
Monitoring management on behalf of shareholders – and that effective monitor-
ing can improve firm performance by reducing “agency costs”; interest is in re-
lationship between proxies for board incentives to monitor (eg, board depend-
ence on equity compensation) and firm performance
Boards as a provider of resources (including legitimacy, advice and counsel, and
links to other organisations); interest is in “Board capital” – consisting of human
capital (experience, expertise, reputation) and relational capital; (network of ties
to other firms and external constituencies) – and how board capital leads to the
provision of resources to the firm128.
In practice boards both monitor and provide resources. It follows that Board member-
ship should reflect both considerations. The relative weighting and importance of
each consideration varies through an organisation’s development life cycle.129
With responsibility of delivery of Programme outcomes the responsibility of Boards
and CEOs, the Department of Education, Science and Training should not be involved
in detailed oversight. The focus should be on holding Boards accountable for per-
formance. Within this framework, Boards should oversight the preparation of Annual
Reports and the three-year Performance Audit Reports recommended in Part I.
Recommendation
II-15. The focus of accountability under the CRC Programme should be on
holding CRC Boards accountable for performance. Boards be re-
quired to sign off on Annual Reports and commit to implementation
of the three yearly Independent Performance Audit Reports

8.5 Reporting
As final impacts of industrial research will not always be known for many years it is
often necessary to adopt a “proxy” approach and to look at the logic and integrity of
the planning and decision-making processes that are in place, and in particular, the
approach to managing risk and dealing with uncertainty. Uncertainty arises when the
consequences of a plan/decision will not be known until well after commitment.
From a management perspective, for example -
There can be no guarantee that a good plan/decision will lead to good conse-
quences
A good plan/decision can lead to a bad outcome due to circumstances that are
unpredictable and beyond the control of the decision maker

128
See Amy J Hillman and Thomas Dalzeil, "Boards of Directors and Firm Performance: Integrating Agency and Resource
Dependence Perspectives," Academy of Management Review 28, no. 3 (2003)
129
Matthew D Lynall, Brian R Golden, and Amy J Hillman, "Board Composition from Adolescence to Maturity: A Multi
theoretic View," Academy of Management Review 28, no. 3 (2003)

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A bad plan/decision can lead to a good consequence – in circumstances that

cannot be replicated (i.e. luck).
There is the additional benefit in the “learning by doing effect”. Similar considera-
tions apply to long-term research projects.
In these circumstances the emphasis in reporting has to be on the quality of the
plan/decision making – as well as the quality of the consequences. Thus, there is a
need to look at the planning and decision-making processes – including capacity to
identify problems/opportunities, assessment of options and alternatives, implementa-
tion, and approaches to managing uncertainty.
This capacity also includes the way in which information and knowledge is acquired,
including access to informed and expert opinion – nationally and internationally.
Moreover, decisions will involve “calculated risks” and an important issue is how
well these are addressed, managed and documented.
The ability to make good decisions and to manage uncertainty is highly contingent on
individual, organisation and management capability, reflected in the criteria of
credibility, reputation and integrity and the absence of self-interest (or conflicts of
interest). In other words, suppliers of resources have to place a very high level of
trust in the capacity of an organisation to be able to deliver the outcomes sought,
particularly when the outcomes may not materialise for many years. This trust has to
be verified on a regular basis130.
An important part of regular reporting, and periodic evaluation, involves attestation
of the trust related values of credibility, reputation and integrity in governance,
planning, resource allocation and management decisions. The greater the extent to
which these values predominate, the greater is the likelihood that expected outcomes
would be achieved.
Part of this attestation process involves providing evidence about how the work that
has been undertaken (that is, activities) will deliver the results intended. It is not
enough to simply provide evidence that work has been done and there is potential for
achievement.
Recommendation
II-16. The Three Yearly Performance Audit Reports attest to the credibility,
reputation and integrity in governance, planning, resource allocation
and management decision-making processes in the CRC.

130
Failure to engender trust leads to loss of confidence. For example, the recent corporate failures have pointed to the lack of
credibility and integrity in financial reporting and have substantially weakened the confidence of shareholders and other
stakeholders in auditors to attest to the financial performance of companies.

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9: Other matters

9.1 Approach to Commercialisation

Individual CRCs, acting on their own, do not have the resources to develop strong
capabilities in research commercialisation. University technology transfer offices that
do have the capability are heavily committed to work coming directly from the
university.
Suggestions were made during the course of the Evaluation that CRCs should collabo-
rate to develop the depth of expertise and capability required for the successful
commercialisation of research results through these means. A number of groups,
including the Australian Institute for Commercialisation, have expressed interest in
supporting a brokerage role in this area. There are also a number of people with
relevant skills and experience planning to establish a business focused on public
sector research commercialisation.
To be successful, however, the CRCs must have ownership and commitment to such a
vehicle. This would require the commitment, support and involvement of individual
CRCs and the CRC Association.
Recommendation
II-17. CRCs work collectively towards the creation and/or engagement of
an entity that will provide skills and capabilities to assist with effec-
tive research commercialisation. The CRC Association should take
the lead role in facilitating this initiative.

9.2 Support for Small to Medium Businesses and Non Government

Organisations
There is a significant barrier to the engagement of SMEs and NGOs in the CRC
Programme. It can be expensive in time and cost and the seven-year commitment is
unattractive to many SMEs. To many SMEs the ARC Linkage programme is more
attractive on the basis that the research is highly focussed on their need, and has only
a three year (or shorter) duration. Moreover, many CRC research projects are too
large for an SME to participate in – and often beyond their needs or interests.
The difficulties facing SMEs are not a reflection of Programme design per se – the
Programme guidelines do not insist on companies being involved for seven years.
However, applicants who can offer partnership and funding over a seven year re-
search programme may be advantaged in the selection process. As has already been
noted, SMEs are less able to plan years ahead - high-technology start-ups rarely have
more than two years operational funding.
The CRCs that do have a strong focus on technology diffusion (for example, the CRC
for Welded Structures and the CRC for Microtechnology) have extensive involvement
with SMEs, often through outreach activities. A number of CRCs use a collegiate
and an associate framework for SME engagement.
In the ICT Sector, which has a large number of SMEs, most are not aware of, or
involved with, the CRCs. ICT SMEs often have short time horizons. By their nature,

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most SMEs are not generally well placed to play a major, continuing role in a CRC.
Nevertheless, it is important that ICT CRCs engage with the SME community to
achieve technology transfer and to identify opportunities for research and commercial
collaboration where they exist. CRCs should be pro-active in this area, and it is
pleasing to note that several of the ICT CRCs clearly are.
If small business participation is to remain a core requirement in the selection criteria
for CRC funding it is important to encourage a flexible mechanism for achieving this
aim. The clustering of small businesses to ensure that they are able to participate in
the CRC Programme is one way this could be achieved. Similarly, allowing small
businesses to become ‘associate’ members of a CRC whereby they provide little in
the way of resources to the CRC but are able to access elements of the IP developed,
commensurate with their input, could also achieve this.
The NSW Department of State and Regional Development noted that not many CRCs
have sought the Department’s help to commercialise their own research or to reach
out to small businesses. State development agencies have a great deal of contact with
small businesses, but they receive few comments or inquiries about CRCs. The NSW
Department considers that CRCs could be contributing more to upgrading the innova-
tive capacity of existing small businesses.
Recommendation
II-18. The CRC Programme give adequate recognition to the efforts made
by CRCs to build relationships with SMEs and NGOs through the
objective to upgrade the innovation capacities of Australian business
enterprises. The Programme actively seek proposals involving SMEs
and NGOs through “associate agreements” which provide benefits
without the associated administrative, legal and taxation problems.

9.3 Support for regional innovation

The involvement of higher education institutions in promoting regional economic
development is well documented. The contribution of CRCs in supporting that role is
a highlight of the Programme.
The CRC Programme could make a major contribution to helping to create critical
mass and synergy among diverse and somewhat uncoordinated existing research
facilities in the regions.
Recommendation
II-19. The CRC Programme should communicate the contribution of
collaborative research in regional economic development and en-
courage Commonwealth and State regional development agencies to
become participants in developing investment proposals that would
deliver investment outcomes and build capability in regional com-
munities.

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9.4 Involvement of the social sciences and humanities. 131

There is little support for CRCs being established specifically for the social sciences.
However, the interdisciplinary nature of research necessarily invites and involves
participation from the social sciences and the humanities in addressing research with a
national economic, social and/or environmental outcome.
A Deputy Vice Chancellor observed:
The CRC Programme should recognise the economic impact of research in the social
sciences. It has repeatedly and convincingly been pointed out in research forums
around the country that the effective take up of innovation requires strategic ap-
proaches and that this is the stuff of many of the social sciences. In addition, the so-
cial sciences make a direct economic contribution to national development (for in-
stance, the export income of education and the impact of heritage industries). Both
of these elements should be captured in appropriate CRCs.

The trend for including expertise from research in economics is already established.
There is also scope for greater involvement of researchers with expertise in human
settlements, particularly in relation to CRCs concerned with the natural environment.
As the investment outcomes of many CRCs involve adoption and application in
public policy and programmes, consideration should be given by the partners to
include people with skills in policy analysis and advocacy as a way of developing a
pathway to application and implementation.

9.5 Collaboration between participating organisations

As the organisations involved in the CRC Programme become more strategically
orientated towards their involvement in CRCs there is a need for collaboration be-
tween organisations to be managed at a higher level. This follows from the dynamic
of collaboration moving from the “opportunistic” to the “integrative” as discussed in
Section 3.
Effective collaboration at the strategic level requires arrangements to ensure that
participating organisations share the objectives and purposes of the CRC Programme
and ensure that collaboration delivers benefits to all. To this end, it is appropriate for
participating organisations to consider ways in which they can develop ground rules
and arrangements to ensure that collaborative arrangements deliver value to all.
The current CRC Association is representative of CRC Boards and managers. It is
not representative of CRC participants – that is, executive managers in universities,
public research organisations, businesses and participating government agencies.
The major participants in the CRC Programme might consider establishing a forum to
facilitate the development of an integrated approach to collaborative arrangements
within the CRC Programme. The Forum would consist of representatives from the
higher education sector, the Publicly Funded Research Agencies, participating busi-
nesses (perhaps represented by an appropriate industry organisation), government

131
Research fields relating to the social sciences and humanities include: Education, Economics, Commerce, Management, Tourism and Services,
Policy and Political Science, Studies in Human Society, Behavioural and Cognitive Sciences, Law, Justice and Law Enforcement, Journalism,
Librarianship and Curatorial Studies, The Arts, Language and Culture, History and Archaeology, Philosophy and Religion

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agencies across the industry sectors, small business and non-government organisation
interests, the Department of Education, Science and Training, and the CRC Associa-
tion
Issues to be addressed by the Forum would relate directly to matters of concern at the
level of policy, strategy, and organisation of engagement with CRCs. Specific areas
of interest in the present environment could cover, for example, matters concerned
with CRC constitution, taxation, calculation of in-kind contributions and vision and
priorities, the involvement of small to medium enterprises, and non-government
organisations working in the natural capital restoration and repair and biodiversity
areas.
Such a Forum would not duplicate or diminish the important role of the CRC Com-
mittee, which includes among its membership many of the CRC participant groups.

9.6 Assistance and support for the CRC Association

With a time frame of 12 years and 123 CRCs supported, a CRC “industry” has
emerged. Effective industries require leadership and have strong industry representa-
tion on matters relating to policy advocacy and member support and assistance.
It is also a feature of contemporary public policy that governments like to communi-
cate with “industry” through an appropriate and relevant industry association. It is
understood that CRC CEOs have agreed to increase the funding for the CRC Associa-
tion.
The CRC Association needs to develop to a point where it is in a position to offer
high-level advice to Government on complex issues including those relating to
taxation and the impact of the corporations law. Moreover, the CRC Association is in
the best position to promote the achievements of CRCs to industry – collectively and
individually.
Recommendation
II-20. The Department of Education, Science and Training provide tar-
geted financial assistance to the CRC Association for specific pro-
jects developed by the Association related to implementing recom-
mendations in this Report, including contribution to the development
of the CRC entity framework, case studies, communication strategy
and implementation and a commercialisation brokerage.

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Attachments

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Evaluation of the CRC Programme 2003

1: Terms of Reference

The Terms of Reference consisted of two Elements:

Element 1
A Do the Programme’s outputs and outcomes demonstrate that it has been effective in
meeting its objectives including by:
- Contributing to Australia’s economic growth, social well-being and
environmental outcomes;
- Developing Australia’s public and private research capacity in the areas
of national need or global opportunity;
- Producing research of an excellent standard that would not have been
undertaken otherwise;
- Adding to the nation’s intellectual property and its commercialisation or
utilisation;
- Enhancing collaboration among public and private researchers, and
between public researchers and commercial or community interest;
- Increasing the proportion of public researchers who are commercially
oriented; and
- Upgrading the innovative capacities of Australian business enterprises?
B Do the administrative arrangements for the Programme enable it to be delivered as
efficiently and flexibly as possible, in particular the:
- Selection criteria and procedures;
- Funding arrangements;
- Accountability framework; and
- Departmental processes and resources?

Element 2
A Do the programme objectives and key design features provide a clear and appropri-
ate framework for achieving successful outcomes within the broader Australian sci-
ence and innovation system in the medium and longer term?
B Are any changes needed to the objectives to strengthen the Programme in future and
what implications would they have for programme design and change management?
The above Terms of Reference specified the matters that had to be addressed in the Evalua-
tion. A number of additional questions were included in the project brief.
The following additional questions are contained in the project brief.
Element 1
In relation to effectiveness, the methodology will need to include:
an appropriate framework for assessing the impact of the CRC Programme (and, where
appropriate, particular groups of CRCs),
- what impacts can be determined using the available data and are any
trends observable?
- are these data sufficient to make an overall judgement about the impact
of the Programme or are additional data required and, if so, how could
they be obtained in a cost-effective way?

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- what are stakeholders’ views on the impact of the Programme and do

these vary for different types of CRCs?
- are there any international or other benchmarks with which to compare
the impact of the CRC Programme?
an assessment of whether the outcomes of the Programme have demonstrated that it has
achieved the stated Programme objectives:
- has the selection process for CRCs resulted in an appropriate choice of
CRCs with the capability to achieve the stated Programme outcomes?
- to what extent have public research outputs been successfully
commercialised or transferred to commercial or other users?
- has the Programme supported an appropriate mix of CRCs (across
research fields and types of research users – individual enterprises,
industry sectors, enterprises of different size and type and government
agencies)?
- are CRCs' education and training programmes producing high quality
graduates/post-graduates with skills that are valued in industry-oriented
research, including through the provision of career paths?
- has the Programme strengthened collaboration between public and
private researchers and between public researchers and commercial and
community users of research, including through direct participation in the
research and through leveraging contributions from industry and others?
- has the Programme encouraged CRCs to develop international links and
linkages with small and medium enterprises?
- have the governance arrangements within CRCs been effective in
ensuring that CRCs achieve their objectives (across all aspects of CRCs'
activities including financial, research, education and intellectual
property management)?
In relation to efficiency, the methodology will need to cover:
the value for money achieved by the Programme
- has the Programme delivered outputs at an appropriate cost?
- has the Programme produced outcomes (not confined to economic
outcomes) that represent a positive return on the value of inputs?
the appropriateness of Programme management arrangements
- are the processes for selection and contracting of CRCs efficient?
- does the CRC visitor scheme contribute to the efficient administration of
the Programme and achievement of Programme outcomes?
- are the processes for monitoring (through first year visits and periodic
reports) and reviews (2nd and 5th year) cost-effective and would there be
value in harmonising any aspects with the accountability frameworks for
related programmes (eg, ARC, CSIRO)
- are the funding arrangements (including size, duration and phasing of
grants) flexible enough?
Element 2
In relation to the Programme objectives, the evaluation will need to cover:
The clarity of the objectives:
- do the individual objectives provide a coherent overall framework for the
Programme?

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Evaluation of the CRC Programme 2003

- is there a clear relationship between the Programme objectives and the

selection criteria?
- is there any conflict between any of the objectives or selection criteria?
The appropriateness of the objectives in light of developments in related Australian
programmes and policies, developments in related overseas programmes and policies,
and current understanding of the nature of industrial innovation:
- do the objectives, including the balance between them, provide the basis
for an effective CRC Programme over the medium and longer term,
taking account of developments in:
. related programmes including those implemented under Backing
Australia's Ability (eg, Centres of Excellence, ARC research
programmes);
. taking account of any preliminary results of the mapping of Australia’s
science and innovation activities across the public and private sectors to
be undertaken by the Commonwealth.
. policy on research and innovation, including National Research
Priorities;
. developments in the research ‘culture’ in universities and public sector
research agencies;
. structural aspects of Australian industry; and
. technological and industrial trends?
- does the mix of economic and social objectives for the Programme
remain appropriate?
- are there overseas programmes and policies that provide a basis for
changes to CRC programme objectives?
In relation to key programme design features, arising from the examination of the clarity and
appropriateness of the Programme objectives, the evaluation will assess the following:
Selection criteria and procedures
- how should the selection criteria and procedures (including the
collaboration model implied in these) be modified to give effect to any
proposed change to the objectives for the Programme?
Funding arrangements
- how should funding arrangements (eg, size and duration of grants,
funding for 'new from existing' CRCs in successive rounds) be modified?
Accountability framework
- how should the accountability framework (including reporting and
review processes) be modified to ensure the achievement of any proposed
change to the objectives for the Programme?

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2: Approach to the Project

Programme Evaluation
Element 1 of the assignment involved using the methodology of programme evalua-
tion.
Evaluation is one of the three basic forms of disciplined enquiry (the others being
research and policy analysis). It has a focus on an “evaluand” – what is being evalu-
ated – eg, a program, process, organisation, position, etc – which results in “merit”
and/or “worth” constructions (judgements).132
Merit constructions concern the intrinsic quality of what is being evaluated,
irrespective of the setting in which it may find applications
Worth constructions concern the extrinsic usefulness or applicability of what is
being evaluated and in a concrete local, regional or national setting.
In this framework an evaluation is undertaken having regard to three sets of under-
standings:
Understanding and presenting the context of what is being evaluated so as to
make it comprehensible, understandable and explainable – for example, the pol-
icy, strategic and institutional environment in which the CRC Programme oper-
ates (sometimes referred to as the “programme logic”)
Understanding the basis, logic and sophistication of policies, strategies, struc-
tures and actions, and the way in which they have been formulated, developed
and implemented; for example, the ways in which the idea for creating a CRC is
developed by proponents, the processes of formation, applying for and receiving
funding, setting up, creating a management infrastructure, establishing and
funding research priorities, deciding on projects, teaching arrangements, creat-
ing awareness, implementation and/or commercialisation of results and report-
ing; case study approaches are applicable in this context
Understanding the way in intrinsic and extrinsic usefulness, as understood by
stakeholders, are first identified, examined for meaning, and then confronted,
compared and contrasted in encounter situations. This involves both “discov-
ery” and “assimilation” methodologies and approaches; methodologies can ac-
commodate both quantitative and qualitative methods; it is a matter of finding
out what has (or has not) been achieved and whether the actions and tasks were
worth doing and whether there is a case for continuation – with or without
modification.
The discovery phase is an endeavour to identify “what is going on”, in terms of both
what is being evaluated and the context. The assimilation phase involves presenting
new, alternative and/or different perspectives about how the existing arrangements
might be approached and improved in terms of developing, suggesting and recom-
mending new understandings.

132
Egon G Guba and Yvonna S Lincoln, Guidelines and Checklist for Constructivist (a.k.a. Fourth Generation) Evalua-
tion(Evaluation Checklists Project, 2001, accessed); available from www.wmich.edu/evalctr/checklists.

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Howard Partners has developed an evaluation methodology that reflects these consid-
erations and which uses the following framework:

Institutional Pressures, Constraints, Stakeholder Interests

Management
Policy How to Do it Resources Outcomes
Activities Outputs
Objectives Strategies Planning People, Results,
Business Products
The Problem, What to Do Organization Property Achieve-
Processes Services
Opportunity Communic- Knowledge ments
ation

Reporting, Accountability, Probity

© Howard Partners, 1998

The model focuses attention on the linkages between what is intended and what is
achieved, and reflects a supply chain or “value chain” approach. Recently there has
been a great deal of interest in the concept of a “knowledge supply chain”.
Thus, from the perspective of value chain improvement, an important task in evalua-
tion is to ensure a close connection between the policy objectives and the outcomes
and results and to ensure blockages or brakes on the elements or links are identified
and resolved. In the evaluation of the CRC Programme, attention is required to each
element in the “value chain”. That is:
The policy purpose – why CRCs were established, what was intended
The implementation strategies - the number of CRCs, the science, technology
and innovation coverage, industry involvement
The management of CRCs (as well as management of the program) – a point
that is often overlooked, but critical to achieving performance and outcomes
The resources available – public, university, private
The way in which work is undertaken – projects, teaching, awareness
The outputs – what is produced in the way of tangible and intangible products
and services
The outcomes – what has been achieved – in relation to the overall purpose and
in relation to other beneficial outcomes.
In terms of contemporary interest in value chains, and more recently in knowledge
supply chains, the framework also draws attention to elements and linkages in the
overall policy and programme structure. Specifically, the model draws attention to:
The importance of “value” being added to the programme outcome in each
element
The potential influence of pressures, constraints and stakeholder interests in all
elements and linkages of the “chain” - which can in turn impact on the outcome
The importance of reporting, accountability and probity matters – again in all
elements of the “chain”.

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Evaluation of the CRC Programme 2003

The framework assists in identifying and linking the many dimensions of a pro-
gramme structure - planning, organisation, resource allocation and delivery arrange-
ments, etc - and the way in which these contribute to programme outputs and out-
comes. In this way, we are able to link the questions identified in the project brief to
the specific terms of reference relating to efficiency, effectiveness and improvement
for the program.
The framework also draws attention to the underlying importance of management
capacity and capability in moving from policy objective to outcome. That is, the
process does not occur automatically or exogenously. Management input is required
in all facets and the key determinant of programme success is management capacity
and capability in terms of the ability to drive the process as well as cover stakeholder
interests and meet accountability requirements.
This approach to evaluation places a very high priority on consultative mechanisms
and the collection of documentary and statistical “evidence” to support, redirect (or
refute) judgements about what is being done and how to go about it in the future. The
Evaluation/Review of the CRC programme involved an extensive process of consulta-
tion and collection of documentary material.

Strategic Assessment
While Element 1 involves the methodology of programme evaluation, Element 2
involves the tools and techniques of public policy analysis and management strategy
review. The approach is built around examination of the existing situation, drawing
on the Evaluation, analysis of key issues in the policy and programme environment,
identification of a “desired future” state, and working out ways to get there. The
methodology is depicted below.

Strategy Assessment and Repositioning Framework

Existing Key Issues Desired Future

Realities
Present vision,
New Vision
direction, delivery
What are we doing now

Strategic assets
What have we got going for us
Clear Direction
New Initiatives
Distinctive capabilities
What are we really good at
Specific Actions and
Emerging trends Initiatives
What’s going on outside

Opportunities
What can we do now
Long Term
Constraints Resources Commitment
What’s going to stop us

The two approaches were conducted in parallel The key tasks involved are can-
vassed below.

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Evaluation of the CRC Programme 2003

Preliminary and Awareness Raising

Howard Partners confirmed with the relevant project managers in the Department of
Education, Science and Training, their expectations and requirements of the evalua-
tion, and confirmed understanding of the stakeholder base.
Press releases and others forms of awareness raising were undertaken to alert all
stakeholders and other interested parties to the inquiry.

Review of Background Documents, Data and Materials

The evaluation included assembly, analysis and review of all existing background
documentation and data. This included:
Documents and data collected by AusIndustry and the Department of Education,
Science and Training in their management of the programme, including past
CRC Programme evaluations
CRC programme guidelines and operating documents
CRC Centre Annual Reports
Management Data Questionnaire (MDQ) information
CRC Review Reports including 2nd and 5th year reviews
Reports, papers, articles prepared and published
Publicity and promotional material prepared by the CRC Association.

Submissions
Submissions and comments were invited from stakeholder organisations and people
involved in the Programme through a letter from the Department of Education,
Science and Training and media profile. A special e-mail address was established for
the evaluation.
A list of submissions received is at Attachment 3.

Consultation Instruments
Throughout the evaluation Howard Partners prepared a number of background
briefing papers relevant to Element 1 and Element 2 of the Evaluation. These docu-
ments provided background information and described the purpose, procedures and
programme of consultations to be undertaken at each stage.
When approved by the CRC Programme Evaluation Steering Committee and the
Department of Education, Science and Training for public distribution, these consulta-
tion documents were widely circulated, to stakeholders. They were also placed on the
Department of Education, Science and Training web site. They served as primers to
any discussion or workshop.

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Evaluation of the CRC Programme 2003

Consultation Processes

Consultations - Element 1
Element 1 examined the programmes outputs and outcomes and whether these
demonstrate the programme had been effective in meeting its objectives. It included
examining efficiency and effectiveness of programme delivery.
Consultations included:
Workshops with stakeholders in all mainland capital cities
Arranged face to face meetings with key stakeholders in all categories
Telephone conferences with key stakeholders in all categories
Attendance at the CRC Annual Conference in Canberra (21-23 May 2003)

Consultations - Element 2
Element 2 considered the framework and structure of the programme, examining the
clarity of its present objectives, the appropriateness of these objectives in the light of
national/international developments in innovation policy and funding, and any flow
on implications for future programme design, and Centre selection, funding and
accountability.
Consultations included:
Workshops with stakeholders in all mainland capital cities
Arranged face to face meetings with key stakeholders in all categories
Telephone conferences with key stakeholders in all categories
Attendance at meetings of Deputy Vice Chancellors (Research)
Attendance at the CRC Annual Conference in Canberra (21-23 May 2003)
Some of the consultation documents were abbreviated and used to construct, for
example, telephone survey instruments processed by ORIMA Research.

Surveys

Performance Information Survey

A survey was undertaken by Orima Research to provide performance related informa-
tion related to the outcomes of the Programme. The objectives of the survey were to:
Assess the clarity and appropriateness of the proposed performance indicators
for the CRC Programme
Provide quantitative data to complement the development of recommendations
for future strategic directions for the programme
Questionnaires were developed in consultation with Howard Partners, the Department
of Education, Science and Training and the CRC evaluation Steering Committee.
Separate questionnaires were used were used for each of the three categories of
respondents sought:
CRCs

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Evaluation of the CRC Programme 2003

CRC participants in their capacity as research users

Businesses who invest in innovative research, but not through CRCs
Questions for the CRCs and research users were based on the objectives of the CRC
Programme and the performance indicators developed by Howard Partners as ap-
proved by the Steering Committee.
Several of the questions for the CRCs and Participant research users were mirrored to
provide different perspectives on particular issues. The majority of the questions
were force-choice questions supported by a number of open-ended questions to enable
respondents to elaborate or comment on issues. All interviews were conducted via
telephone by senior researchers. The survey was conducted from mid-June to end-
June 2003.
The statistical confidence limits of the Survey are indicated in
Table 54: CRC Performance Survey - Statistical Confidence Limits
Population Sample Confidence
Interval @ 90%
CRCs 62 54 +/-4pp
CRC Participant Businesses 220 28 +/-15
Businesses that invest in industrial research, but not via CRCs * 40 +/-13pp
* Randomly selected from listings of Research performing businesses

Of the 54 CRC survey interviews:

49 (91%) of the participants were at the CEO, Director or Deputy CEO level in
the organisation
The remaining 5 were: 3 Business Managers, 1 Research Manager, 1 Technical
Transfer and Education Manager.
Interview times ranged between 19 and 87 minutes, with the average time taken
overall being 41 minutes.
Of the 28 research user survey interviews
11 (39%) of the participants were at the CEO or Managing Director level in the
organisation
The remaining 17 were: 10 Researcher Directors or Senior scientists; 4 Techni-
cal Managers or equivalent; 3 Chief Engineers or equivalent
Interview times ranged between 20 and 47 minutes, with the average time taken
overall being 34 minutes
Of the 40 survey interviews of businesses that invest in innovative research, but not
through CRCs
7 (17.5%) of the participants were at the CEO level in the organisation
The remaining 33 were: 14 Research Managers; 10 Technology Managers; 3
Financial Managers; 3 Production General Managers or equivalent; 2 Chief En-
gineers; 1 Public and Investor Relations Manager.
Interview times ranged between 5 and 20 minutes, with the average time taken
overall being 10 minutes.
The Performance Information Survey Instruments used in the Evaluation are ap-
pended to this Report

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Evaluation of the CRC Programme 2003

Expert Opinion Survey

People contacted in the consultations process relating to Element 1 were invited to
complete an electronic survey based on the questions raised in the Issues Paper for
Element 2 consultations. The responses are contained in the Evaluation Working
Papers.

Interim Reports and Other Working Papers

Howard Partners prepared two progress reports, a draft final report, supplementary
materials as working papers, appendices and a range of other organisational or
management frameworks or diagrams.
All these interim reports and other works were considered at periodic meetings
between the CRC Evaluation Steering Committee and Howard Partners, whilst
Element 1 and 2 consultations were in progress.

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Evaluation of the CRC Programme 2003

3: Submissions Received

Commonwealth Government Department of Agriculture, Government of

Australian Research Council Western Australia
Department of Communications, Information Department of Primary Industries, Queensland
Technology and the Arts (DCITA) Government
Department of Agriculture, Fisheries and NSW Agriculture
Forestry – Australia Department of State and Regional Development,
Department of Industry, Tourism and Resources New south Wales
Department of the Environment and Heritage, Queensland Department of Natural Resource and
including individual input to the Department Mines
from
CRC for the Great Barrier Reef World Heritage CRC Visitors and Other Parties
Area (submission from the Great Barrier Reef M J Murray
Marine Park Authority) John Yencken
CRC for Antarctica and the Southern Ocean Dr Bob Brown
CRC for Waste Management and Pollution Ian H Pitman
Control
Brenton Hamdorf
CRC for Catchment Hydrology (CRCCH)
Douglas Graham, PhD
Australian Greenhouse Office
Professor Trevor Cole (The University of
Bureau of Transport and Regional Economics, Sydney)
Department of Transport and Regional Services
Grant Consulting Services Pty Ltd

Universities
CRCs
The University of Melbourne
CRC Association
The Group of Eight
A J Parker CRC for Hydrometallurgy
The University of Sydney
Australian Photonics CRC
Curtin University of Technology
Coastal CRC
The University of the Sunshine Coast
CRC for Catchment Hydrology (Professor Dr
The University of New England Rob Vertessy)
The University of Tasmania CRC for Clean Power from Lignite
CRC for Sustainable Sugar Production
Industry CRC for Sustainable Tourism (Dr Terry de Lacy)
AMIRA International Limited CRC for Freshwater Ecology
Australian Chamber of Commerce and Industry CRC for Micro Technology
Australian Industry Group
Australian Mineral Industries Research Associa- Publicly Funded Research Agencies
tion Limited
CSIRO
Australian Venture Capital Association Limited
DSTO
GlaxoSmithKline
CSIRO – Phoenix Group
Melbourne Water
SGS Lakefield Oretest Pty Limited
Learned Societies
Telstra Corporation Ltd
Federation of Australian Scientific and Techno-
logical Societies
State Government Australian Geoscience Council Inc.
Department of Innovation, Industry and Regional
Development, Victoria
Technology Advisers
CRC Assist

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Evaluation of the CRC Programme 2003

4: People and Organisations Consulted

A listing of people and organisations who have participated in meetings as part of the
Consultations Programme for the Evaluation, is listed below.
John Angove, General Manager, SGS Lakefield Richard Brookes, Managing Director, National
Oretest Pty Ltd, Perth Food Industry Strategy, Canberra
Liz Armstrong, Technology Transfer and Chris Buller, Business Manager, Pest Animal
Training Director, Distributed Systems Technol- CRC, Canberra
ogy Centre Harry Buskes, Science, Technology and
Jim Arthur, Commercialisation and Intellectual Innovation Department of Innovation Industry
Property Manager, Cooperative Research Centre and Regional Development
for Cast Metals Manufacturing Garry Butler, Business Development Director,
Dr Michael Barber, Executive Director, Science AIC
Planning, CSIRO, Canberra Anne Campbell, Executive Director, CRC
Associate Professor John Barker, Divisional Association, Canberra
Research Manager Division of Science and Reg Christiansen, Acting Assistant Commis-
Engineering, Murdoch University Western sioner Community Safety and Training Depart-
Australia ment of Emergency Services, Rural Fire Service,
Dr Thomas Barlow, Science Adviser to the Hon Queensland
Dr Brendan Nelson MP, Minister for Education, Ric Clark, Managing Director, Ericsson Asia
Science & Training PacificLab Australasia, Melbourne
Megan Barrett, Director, Office of Research Grahame Cook, Deputy Secretary, DEST
Central Queensland University Executive, Canberra
Dr Bevan D Bates, Head Strategic Programs Craig Copeland, Director, Wetland Care
Systems Sciences Laboratory, Defence Science Australia, Ballina
& Technology
Professor Edwina Cornish, Deputy Vice-
Dr Robin Batterham, Chief Scientist, DEST, Chancellor (Research), The University Of
Canberra Adelaide
Clive G. Bennett, Principal Consultant, Clive Peter Cottingham, Knowledge Broker, CRC for
Bennett & Associates Metals Industry Consult- Freshwater Ecology, Melbourne
ants
Dr Bob Cowan, Director and CEO, CRC for
Tricia Berman, Department of Industry, Tourism Cochlear Implant and Hearing Aid Innovation,
and Resources, Canberra Melbourne
Peter Blamey, Chief Technical Officer, Dynamic Professor Lawrence Cram, Australian Research
Hearing, Richmond, Victoria Council, Canberra
Dr Gopal Krishna Bose, Statistician, Research Andrew Crowe, Business Manager Office of
Surveys & Mathematical Statistics Team, Office Commercial Services, QUT
of Economic and Statistical
Karen Curtis, Director Industry Policy, Austra-
Professor Gary Bouma, Deputy Vice-Chancellor lian Chamber of Commerce and Industry
and Vice-President (Research and Development),
Monash Prof Matthew Cuthbertson, Chief Executive
Officer, Cooperative Research Centre for Sensor
Simone Braakhuis, Policy Adviser - Commer- Signal Information Processing
cialisation, Science, Technology and Innovation
Department of Innovation Industry and Regional Ian Dagley, Chief Executive Officer, Coopera-
Development tive Research Centre for Polymers
Dr Mark Bradley, Chief Executive Officer, ATP Clive Davenport, Chief Executive Officer, CRC
Innovations Pty Ltd for MicroTechnology
Hugh Bradlow, Chief Technology Officer, Frederick Davidson, Chairman, CRC for
Telstra, Melbourne Cochlear Implant and Hearing Innovation
Professor Max Brennan Dr Dick Davies, Executive Director, AMIRA
International Limited

190
Evaluation of the CRC Programme 2003

Rob Delane, Executive Director Plant Industries, Prof Rod Griffin, Director, CRC For Sustainable
Department of Agriculture Government of Production Forestry
Western Australia Dr Brenton Hamdorf, Business Development
Andrea Douglas, Chief Executive Officer, The manager, Business Liaison Office, The Univer-
Cooperative Research Centre for Discovery of sity of Sydney
Genes for Common Human Diseases Gordon Hart, CRC for Sustainable Rice Produc-
Ruth Drinkwater, Senior Manager, Australian tion, Yanco, NSW
Institute For Commercialisation Dr Simon E Hearn, Managing Director, Rural
Dr Roger Edwards, Chief Executive, Australian Industries Research & Development Corporation
sustainable industry Research Centre Tony Hill, Managing Director, Capital Hill
Elizabeth Elanius, Photonics CRC Consulting
Ros Engledow, Director Research Funding Dr Bruce Hobbs, Chief Scientist Executive
Policy, Australian Vice-Chancellors' Committee Director, Office of Science and Innovation
A/Professor Mike Ewing, Deputy CEO, CRC for Department of The Premier and Cabinet
Plant--Based Management of Dryland Salinity Government of Western Australia

Professor L D Field, Acting Pro-Vice Chancellor, Dr Mark Hochman, Director, Research Services
Research, the University of Sydney University of South Australia

David Fenwick, Research Office, UTS Dr. R. Mark Hodge, Manager - Commercialisa-
tion, Science, Technology and Innovation
Nell Finlayson, Biotechnology Business Department of Innovation Industry and Regional
Director, BiolnnovationSA Government of South Development, Melbourne
Australia
Professor Peter Hoj, Director, The Australian
John Flack, Director, Cooperative Research Wine Research Institute, Adelaide
Centre for Cellular Growth Factors
Shaun Holthouse, Technology Development
A/Prof Simon Fleming, Director, Australian Manager, CRC for MicroTechnology
Photonics Cooperative Research Centre
Dr Michael Hood, Chief Executive Officer, CRC
David Garman, Executive Director, CRC for for Mining Technology & Equipment
Waste management and Pollution Control,
Sydney Neal E Hooper, Principal Legal Officer Crown
Law, Department of Justice and Attorney
Professor Paul Gatenby, Dean, Medical School, General, Brisbane
ANU, Canberra
Selena Hooper, Deputy Manager Contracts &
Mark Gibson, Chief Executive Officer, DSTC Consultancy Adviser Research & Development
Pty Ltd Office, University of Tasmania
Professor L Murray Gillin, Professor Emeritus, Professor John Irwin, Chief Executive Officer,
Australian Graduate School of Entrepreneurship CRC for Tropical Plant Protection
(AGSE) Swinburne University of Technology
Dr Peter Jackson, Manager Research, Deputy
Dr Ross Gilmour, Programme Manager, Grains CEO, Cooperative Research Centre for Clean
Research & Development Corporation Power From Lignite
Dr Barney Glover, Director, Research and Dr Peter Janssen, Contracts and Intellectual
Development, Curtin University of Technology Property Officer, La Trobe University
John P Grace, Director, Ibio Pty Ltd Dr Ian Johnsson, General Manager Research &
Dr Miriam Goodwin, ANSTO Innovation, Australian Pork Limited
Neil Grant, Director Office of Innovation, Professor Archie Johnston, Pro-VC Research,
Department of Further Education, Employment, UTS
Science & Technology Government of South Merv Johnston, Managing Director, CVC Reef
Australia
Peter D Jonson, Chair, Australian Institute for
Carole Green, Business Manager, CRC Con- Commercialisation
struction Innovation
Dr Sue Keay, Technical Communications
Bronwyn Greene, Executive Officer, Office of Manager, Cooperative Research Centre for Cast
the Pro Vice-Chancellor (Research) The Metals Manufacturing
University of Sydney

191
Evaluation of the CRC Programme 2003

Peter J Keayes, General Manager – Commercial Robert Mitchell, General Manager, The Warren
– CMTE, Brisbane Centre
Professor Anne Kelso, Director, CRC for Dr Chris Mitchell, CEO, CRC for Greenhouse
Vaccine Technology, Brisbane Accounting, Canberra
Dr Rob Keogh, Director Programs, Aimal Health John Molloy, Cooperative Research Centre for
Australia, Canberra Catchment Hydrology
Jeff Kiongwell, Centre Manager, CRC for Associate Professor John Mott, Strategic
Satellite Systems, Canberra Coordinator Offices of Senior Deputy Vice-
Robyn Klepetko, Major Research Programs Chancellor and Deputy Vice-Chancellor
Coordinator, Melbourne Research and Innova- (Research), The University of Queensland
tion Office, The University of Melbourne Karen E Mow, Director Research Policy,
Professor Frank P Larkins, Deputy Vice NH&MRC, Canberra
Chancellor (Research) and Professor of Chemis- Neal Muller, Manager, Technology and Service
try, The University of Melbourne Industry Development Division Department of
Michael J. Lee, Technology Transfer and State Development Queensland Government
Education Manager, Cooperative Research John Mullins, Director Strategic Science
Centre for Cast Metals Manufacturing Initiatives Queensland Government Natural
Charles Lindop, Director, Incubator Program, Resources and Mines, Natural Resource Sciences
ATP Innovations Pry Ltd Professor Mal Nairn, ATSE, Perth
Damian Lismore, CRC for MicroTechnology Allan Newton, Director, Rural RDC Chairs
Professor Simon Maddocks, Chief Scientist, Secretariat, Canberra
SARDI Livestock Systems University of Suzanne Northcott, Executive Head, Centre for
Adelaide Research Management, NH&MRC, Canberra
Theo Magoulas, Contracts Advisor Research Dr Andrew Parfitt, CEO, CRC for Satellite
Office, The University of New South Wales Systems, CSIRO, Canberra
Mary Marko, Senior Policy Adviser Office of Dr Jim Patrick, Senior Vice President – Research
Innovation, Department of Further Education, and Applications, Cochlear Limited
Employment Science & Technology Government Dr. Joseph Patroni, Manager Science Capability
of South Australia Development, Office of Science and Innovation
John Marshall, Principal, Executive Compass, Department of the Premier and Cabinet Govern-
Melbourne ment of Western Australia
Julie Martinsen, Manager, ICT Innovation Policy Dr Peter O’Brien, Executive Director, Bureau of
IT Industries Development, Department of Rural Sciences, Canberra
Communications Information Technology and Dr Robet O’Connor, Policy Officer, Policy and
the Arts Coordination, AV-CC Secretariat, Canberra
Oliver Mayo, State Resources, CSIRO Health Tony Pensabene, National Manager-Economics,
Sciences and Nutrition Livestock Industries Victoria-Industry Policy, Australian Industry
Michael P McArdle, Head, Research Develop- Group
ment Office of Research QUT Greg Pickles, Programme Manager Animal
Mr Andrew McCreedie, DITR, Canberra Pests, Department of Agriculture Government of
Leanne McDonald, Manager Victoria, AIC Western Australia

Trudi McDonald, Deputy Director Cabinet Greg Piko, Manager, ICT Centre of Excellence
Office, Department of the Premier and Cabinet Program, Department of Communications,
Government of South Australia Information Technology and the Arts, canberra

Margaret McGrath, Business Manager, CRC for Dr Mike du Plessis, Innovation & R&D Manager
Tropical Plant Protection Environment & Innovation, Sydney Water

Robert A McIntosh, Plant Breeding Institute, The Nigel Poole, Director Commercialisation, CSIRO
University of Sydney Warwick D. Raverty, Manager IP and Commer-
John Meert, Group Executive Director, Perform- cialisation, CRC for Functional Communication
ance Audit Services Group, ANAO, Canberra Surfaces

Dan Minchin, Commercial Manager, Dairy CRC

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Evaluation of the CRC Programme 2003

George Rayment, Principal Scientist and Department of Innovation and Information

Programme Leader Sustainable Sugar and DEAP Economy
Queensland Government Natural Resources and Dr Mike Skalsky, Director, Sci2Rx Pty Ltd
Mines,
Dr Frances Skrezenek, Office of the Deputy Vice
Lynne Reeder, Manager, Corporate & Commu- Chancellor Research, The University of Mel-
nity Relations, University Development Division bourne
The University of Melbourne
Dr Ralph Slatyer, Canberra
Dr Ian Reinecke, Director, Solutions Strategies
and Chair DSTC Pty Ltd John Sligar, ATSE, Sydney
Corrina Richards, Adviser Economic Policy, Chris Smallbone, Executive Director, Welding
Department of Premier and Cabinet, Melbourne Institute of Australia
Lee Ridge, Chief Operating Officer, Photonics Felicia Smith, CRC Mining Technology and
Institute Ply Ltd, Sydney Equipment
Professor Dudley Roach, Chief Executive John Spathonis, Principal Manager (Research &
Officer, Cooperative Research Centre for Development) Capability and Delivery Division,
Railway Engineering and Technologies Department of Main Roads Queensland Gov-
ernment
Angus M Robinson, Chief Executive, Australian
Electrical and Electronic Manufacturers' Andrew Stanley, Director, Research and
Association, Canberra Evaluation Branch Strategic Planning and Policy
Division Department of Human Services
Bill Rosewall, CEO Wheat CRC Government of South Australia
Professor Ian Ross, Canberra Dr Dennis Steffensen, Deputy CEO, CRC for
Professor Paul L Rossiter, Deputy Vice- Water Quality and Treatment
Chancellor Research & Development, Curtin Professor Andris Stelbovics, Acting Pro Vice
University of Technology Chancellor - Research, Murdoch University
Chris Rowles, General Manager, Telstra New Western Australia
Wave, Melbourne Professor David St John, CEO, CRC for Cast
Assoc. Prof David Russell, School of Psychol- Metals manufacturing, Brisbane
ogy, University of Western Sydney Michael Sutton, General Manager IT Industry
Professor Vicki Sara, Australian Research Development Branch, Department of Communi-
Council, Canberra cations Information Technology and the Arts
Neville K. Sawyer, Director, Australian Business Dr Rodney Thiele, Deputy Director Research and
k Limited Development, Curtin University of Technology
Professor Mark Sceats, Chief Executive Officer, Geoff Thomas, Chief Executive Officer, Playford
Australian Photonics Cooperative Research Capital, Adelaide
Centre Ian Thompson, Executive Manager, Natural
Professor S W Serjeantson, Executive Secretary, Resource Management Department of Agricul-
Australian Academy of Science, Canberra ture Fisheries & Forestry Australia
Dr Duncan Seddon, Director, Duncan Seddon Dr Campbell Thomson, Director Research Office
and Associates, Mt Eliza, Victoria Research Services, The University of Western
Dr Nigel Steele Scott, Deputy Chief, CSIRO Australia
Laboratory, Adelaide Dr Richard Thornton, R&D Portfolio Manager,
Peter Shadbolt, Project Coordinator Industry Telstra New Wave, Melbourne
Liaison, Swinburne University Dr Richard Thwaites, Business Manager, CRC
Dr Richard Sharp, Director - Technology for Bioproducts
Commercialisation, Unisearch Limited Dr Jeffrey Tobias, Managing Director, The
Dr Ray W Shaw, General Manager, Technology Strategy Group
Services, Rio Tinto, Melbourne Lorraine Tomlins, Director Programs and People
Roger Shaw, CEO, CRC for Coastal Zone, Support, NH&MRC, Canberra
Estuary and Waterway Management, Brisbane Dr Peter Twine, Manager – Research and
Dr Bill Silvey, Manager, Collaborative R&D Development, Bureau of Sugar Experiment
Centres Coordination Queensland Government Stations, Brisbane

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Evaluation of the CRC Programme 2003

Rod Urquhart, Chief Executive Officer, CRC for

Functional Communication Surfaces
Dr Meera Verma, Vice President & Chief
Operating Officer, BresaGen Limited
Ms Virginia Walsh, Executive Director, Group of
Eight, Canberra
David Watson, Executive Director, Science and
External Relations, DSTO
Stephan J Wellink, Director Research and
Development Office, University of Technology,
Sydney
Sharon Winslade, Managing Director, Technol-
ogy Investments Australia Pry Ltd
Dr Arnold Wissemann, Principal Policy Analyst
Office of the Chief Scientist, Department of
Primary Industries Queensland Government
Mark Woffenden, Chief Executive Officer
Adjunct Professor, DSE, Murdoch University,
The A.J. Parker Cooperative Research Centre for
Hydrometallurgy
Dr Katherine Woodthorpe, Director, People &
Innovation Corporate Advisers Pty Ltd
Hon David Wotton, Chairman, River Murray
Catchment Water Management Board
Jeremy Wurm, Managing Director, Brooker
Consulting, Melbourne
Nick Yazidjoglou, Assistant Directir, Science
Industry Relations, DSTO, Canberra
John Yencken, Research Student, Swinburne
Graduate School of Management (SGSM)
Tara Young, Research Coordinator, Australian
Institute for Commercialisation

194
Evaluation of the CRC Programme 2003

5: Project Management

The Evaluation was undertaken by Howard Partners, a Canberra based public policy
research and management consulting company.
John Howard, the Managing Director of the company was the project manager and
lead advisor to the Department of Education, Science and Training in the assignment.
John was responsible for all aspects of the engagement, including consultations,
analysis and writing the Progress and Final Reports.
Howard Partners Associates who worked on various aspects of the assignment were:
Dr Craig Fowler
Alastair Higham
Dr Janice Hirshorn
Prof. Ron Johnson
Dr Mark Matthews
Dian Jones provided valuable research and administrative support in the initial stages
of the project.
ORIMA Research, a specialist company in organisational performance assessment
and market research undertook telephone based surveys of CRC stakeholders. Mr
Rodney Latimer led their assistance in this evaluation. He was supported by Cheryl
Edward and Ben Reece.
Howard Partners appreciates the contribution of the many CRC Programme stake-
holders who willingly provided their knowledge, experience and time during the
nation wide consultations process and in the various surveys.
Howard Partners specifically wish to thank Mr Rod Manns, Ms Marea Fatseas, Ms
Linda Meech, Ms Cathy McCay, Ms Cecilia Wood and Ms Josephine Quealy in the
Department of Education, Science and Training for their thoughtful guidance and
contribution to the programme evaluation.
Howard Partners also specifically thanks all the members of the CRC Evaluation
Steering Committee, and Dr Geoffrey Vaughan (Chair of the CRC Committee), who
all provided valuable input and encouragement during the numerous meetings held
throughout the consultancy.
The contribution of the Australian Institute of Commercialisation, in the form of a
detailed content analysis of CRC Annual Reports was also greatly appreciated.

195
Evaluation of the CRC Programme 2003

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