Australia: CRC Program To Re-Focus On Dealing With Significant Challenges Facing Australia

Last Updated: 8 October 2008
Article by Nicole Reid

As part of the wider examination of Australia's national innovation system, the Federal Government commissioned a review of the Cooperative Research Centre (CRC) Program. The resulting report, Collaborating to a purpose (Report), released in August 2008, recognised the important role the CRC Program still plays in Australia's innovation system by encouraging large-scale collaborative research, but also recommended a range of changes and improvements to address perceived problems with the CRC Program raised by universities, other research entities, industry and CRCs themselves.

Criticisms of the CRC Program from the higher education sector

According to the Report, although universities have been important contributors to the CRC Program (representing 15 of the top 20 contributors to date), they are becoming less willing to be involved due to a range of factors.

Some of the criticisms levelled at the CRC Program from the higher education sector, and relevant recommendations of the Report, are summarised below.

Predominance of research users over research providers

Some universities criticised the growing dominance of research users in the CRC Program at the expense of research providers. Submissions pointed to the CRC Program's emphasis on CRC outcomes being commercialised by end users, and the requirement for research users or independent persons to control the board of incorporated CRCs.

The Report recommended that:

  • CRCs remain focussed on addressing challenges facing end users, but should aim to tackle specific identifiable end user problems rather than necessarily aiming to achieve outcomes which can be commercialised
  • the requirement that research providers not hold a majority of board positions be abandoned, proposing instead that board positions be linked to the resources provided by CRC participants (although not necessarily on a proportional basis)
  • the requirement that at least one university be party to each funding application be maintained, in light of the important role played by universities in the CRC Program.

Exclusion of public good outcomes

The Report was critical of the emphasis on commercial outcomes at the expense of outcomes that deal with challenges faced by industry but that may not have direct economic benefits.

The Report recommended that:

  • achievement of public good outcomes be an objective of the CRC Program
  • the amount of public funding provided to a CRC depend on the level of social benefit it is likely to achieve.

Increased complexity of negotiating arrangements and administering CRCs

The need for greater flexibility in CRC governance arrangements was a common concern for both research providers and end users. Submissions also criticised the increasing costs of negotiating CRC arrangements and of running a CRC over its life.

The Report was critical of the current requirement that all CRCs be established as incorporated entities because, in its view, this is not an appropriate structure for all CRCs and an unincorporated joint venture may be more appropriate in many cases.

The Report recommended that:

  • CRC participants be given greater flexibility to determine their own management arrangements
  • applicants for CRC funding be required to demonstrate why the proposed structural arrangements (as well as other others aspects of the arrangements, including funding and intellectual property ownership) are appropriate and to show that they will not reduce accountability.

Decreasing willingness to contribute cash

Some universities were critical of the emphasis on cash contributions over in-kind contributions, as the latter are more palatable to universities given their funding constraints.

The Report recommended that:

  • a CRC should be allowed to decide whether or not university participants would be required to contribute cash as well as conducting research
  • the share of cash contributed by research users should substantially increase in line with international best practice
  • for the purposes of the selection process and reporting requirements, in-kind contributions should be rated less highly than cash contributions.

Emphasis on science and engineering

The Report echoed criticisms by universities of the CRC Program's emphasis on research in the science and engineering fields only.

The Report recommended that:

  • the CRC Program be extended into the humanities area, particularly service industries
  • programs be put in place to encourage collaboration through CRCs in those areas.

Will change re-engage the university sector?

It remains to be seen if the changes proposed in the Report will reinvigorate the higher education sector's enthusiasm for the CRC Program. On the one hand, the expansion of the CRC Program into fields other than the sciences and engineering, and the renewed focus on achieving public good outcomes, may make involvement in CRCs more attractive to research providers as there should be greater opportunities to be involved in cutting-edge research. On the other hand, for example, the Report recommended encouraging universities to make cash contributions even though this tends to be a disincentive to their participation. The more recently released report on the national innovation system, Venturous Australia: Building Strength in Innovation, highlighted this recommendation as potentially problematic.

While the Report acknowledged criticisms about the time and expense of negotiating CRC arrangements, it gave greater weight to the need for flexibility in choosing appropriate arrangements. Irrespective of the structure chosen by participants, they will inevitably need to achieve a consensus on risk allocation, ownership and intellectual property use, entitlements to research outcomes (financial or otherwise) and confidentiality and publication rights. Each issue has to be dealt with in negotiations and contractual arrangements, and the respective risk-reward profiles of each participant will dictate whether future CRCs prove to be any easier and cheaper to establish.

The Report made limited recommendations aimed at ensuring that research users are not given a disproportionately significant role within CRCs. Although the Report recommended research providers not be prevented from holding a majority of board positions, the focus of the CRC Program as envisioned by the Report remains on producing outputs that will address end user issues. Further, if the Report's recommendations are implemented, cash contributions will be valued more highly than in-kind contributions and end users will be expected to make more of the former, which may mean that end users come to expect even more control over the operation of the CRC. Ultimately, the CRC's governing body should be derived by balancing the skills required to manage the CRC's activities with each participant's desire for a requisite degree of control, so as to maximise the chances of the CRC achieving its own objectives and managing its perceived risks.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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