Technology innovation is on the brink of a massive disruption in Australia. Why? Because Australia is a leader in research performance, but flounders in the translation of this research into successful innovations.
The most common attribute of a successful entrepreneur is persistence, not the quality of the idea. To take a new and disruptive idea to market requires a lot of things, but it can’t succeed without PASSION AND PERSISTENCE. Therefore, it seems almost obvious for successful commercialization of a new research derived innovation to have any chance of success its needs a passionate advocate. This is most likely the inventor, who in the US they typically call an Academic Entrepreneur or Founder. In contrast a hired CEO or consultant typically only stays committed to the idea as long as they are paid or can see a financial return, which mostly doesn’t eventuate for years and quite possibly never materializes.
In the US as in Australia, University tech transfer offices (TTO) have a heavy bias to licensing technologies to existing companies. This is predominantly because the process is profoundly shorter, cheaper, easier and less risky than forming a start-up and taking the technology to market.However, evidence tells us large corporations mostly in-license technology that solves existing per-identified problems to their existing products and services. These are almost never disruptive and rarely innovative. They do however, acquire innovative companies disrupting markets of relevance to their product portfolio. So more simply, corporations license in solutions and acquire disruptions, hence disruptions mostly come from Start-ups not Licenses.
This is where the difference between Australia and the US deviates. In the US researchers are encouraged and supported to take leave from their university and form a start-up company, often with the financial support of Angel or Venture capital investors. However in Australia, researchers have almost no capacity to do the same and certainly are not encouraged to. Therefore a university or government invention with the potential to become disruptive innovation often never sees the light of day as the Tech Transfer Office runs out of time and or interest in trying to license a technology that is probably too early to license. It’s a solution looking for a problem that no one sees yet.
The next 10 years provides Australian researchers a narrow opportunity to leverage the emerging $1B of new early stage high tech venture finance. Used wisely this funding can transform the Australian old world economy into a new world knowledge intensive entrepreneurial economy. Between the CSIRO fund ($200M), the Federal governments Biomedical translation fund ($500M), Go8 universities fund ($200M) and Uniseed ($70M), unprecedented funds will be available for research intensive discoveries primarily from universities and government research agencies. This is in addition to the $500M+ Blue sky, One Ventures, Blackbird, Square Peg and Two Ventures funds raised for later stage start-ups and fast growth businesses.
We can create exciting new manufacturing, service and digital industries and a future for Australia that is vibrant potent and prosperous, with benefits for all, but only if we connect the ideas with the capital and have the right people to drive them to success.
In 2014 there were only 10 start-ups from all of the Australian Universities and CSIRO. The major limitation therefore is that the University/Government TTO’s will not be able to supply enough start up deal flow to soak up the 100’s of millions of new venture funding each year. This will mean either the deals will not get done, or the quality of the deals funded will be lower. This would be disastrous as lower quality deals will mean fewer successes which will undermine the confidence of investors in the sector for another couple of decades.
The CSIRO have recently launch a series of initiatives designed to empower researchers from any Australian University and CSIRO with ideas and inventions with potential to become disruptive innovations. I believe the CSIRO ON Prime, Accelerate and CSIRO Investment Fund will cause a major disruption of tech transfer and commercialization in Australia by empowering research teams to see and advance the commercialization potential of their ideas. At present commercialization is limited by university/government TTO capacity, which is low on a national scale. The CSIRO ON initiative and investment fund will flush out new opportunities and lead to a substantial increase in tech start-ups by equipping, empowering and energising Australian research teams through the Lean Launch Pad process to take their innovations to market. If TTO’s get on board this will lead to a substantial increase in deal flow. It is better to have thousands of researchers exploring how they can translate their research into innovations than just the handful of TTO professionals currently employed by research organizations to do them same.
I am excited about being part of the next technological revolution in Australia, however it will only happen if we realize we need to open the bottleneck reducing flow of tech start-ups and allow researchers to be more actively involved in taking these technologies to market. As a tech transfer professional that makes me nervous, as these researchers often don’t have the skills or business acumen, but hey, neither did mark Zuckerberg and he’s done OK. Success in high-impact start-ups is all about supporting the person with the most passion with the right people, skills and capital. We now have the capital, let’s get the right people engaged.