Australian Innovation

Commercialisation Programs Worth $240M to Australia

A new report estimates that innovation services provided to business by the Australian Institute for Commercialisation (AIC) could generate up to $240 million per year in the economy through  additional business turnover, exports, and hundreds of new jobs.

The AIC commissioned the report from AEC Group, an independent economic consultancy. The report stated it proves the importance of having an efficient and affordable resource with deep knowledge of the innovation system that R&D-based businesses can consult when they simply do not know how to take the next step.

“It’s a truism but people and businesses don’t know what they don’t know,” Dr Rowan Gilmore, Chief Executive Officer of the AIC, said.

“The difference is the smart ones recognise this and seek out organisations such as the AIC, when they don’t have the internal expertise to solve a problem, when they need a certain kind of technology, or when they are not sure which markets they could target with a new product.

“We have the knowledge, networks and resources to help them, whether that’s introducing them to another business with which they could partner for innovation, connecting them with university research, or gathering 50 specialists together for a two-day workshop” Dr Gilmore said.

“This report quantifies the value that the AIC’s activities add to the Australian economy, and proves that the country could reap many more rewards from its R&D activity if we address the culture of innovation and treat the commercial side more seriously.”

The independent report specifically examined three flagship AIC programs: Ideas2Market, TechFast and TechClinic, which work with individual entrepreneurs, firms and industry sectors respectively.

Independent economic researchers interviewed participants about results they had already achieved, or expected to see in the future, and concluded that many businesses engaged in these programs would not have commercialised ideas or diversified product lines without the AIC’s assistance.

Others indicated that engagement with the AIC accelerated the entire innovative process by one or two years, just by connecting them with the right people and providing the mechanism to establish their innovation.

Three case studies were selected to illustrate these flagship programs, which together have attracted more than 1600 participants over the past five years.

The inventor of a medication device for asthmatics engaging in water sports and activities attended the AIC’s Ideas2Market workshop and masterclass. He reported making important business connections and receiving valuable advice on marketing and funding, helping him prepare his product for imminent market release.

Australian green-tech company Biolytix turned to the AIC’s TechFast program to make its natural wastewater treatment system more suited to local market conditions. Although decentralised sewerage has huge performance and environmental advantages, regulators still lacked confidence in its reliability. To address this, the AIC found a partner with suitable monitoring and control technology that helped Biolytix develop low cost, high tech telemetry to meet its needs, resulting in increased sales, market share and exports.

AIC TechClinics bring together researchers, technology providers, potential end-users, regulators, investors and other parties to generate ideas about the future needs of a specific market.  In one 2009 case study, the AIC delivered a series of clean energy TechClinics to investigate remote and off-grid solar and wind generation projects. Fifty experts attended one clinic, which resulted in four companies agreeing to work together to meet the energy storage needs of the Kalumbura and Yunghngora communities in Western Australia.

Dr Gilmore said the economic assessment quantified the value of the AIC’s work in terms of jobs and sales, but the benefits could have an even wider impact

“We are now in a “triple- bottom line” world, where sustainability and social responsibility take their rightful places alongside financial concerns,” Dr Gilmore said.

“We are very proud of the work the AIC has done since it was established in 2002, and with our achievements now quantified by independent economic modeling, are confident that we can continue making a valuable contribution to Australia’s future economy and environment.”

The report also highlighted the importance of innovation and commercialisation to the Australian economy, stating:

“Achieving an innovative and a knowledge-based economy is one of the core pillars of economic development. Creation of a knowledge-based economy relies upon the innovation and then application of technologies in a commercial sense, to produce economic benefits and high value adding jobs…

“Australia is well known for its innovative efforts relative to the size of its economy, ranking twelfth in the world for research and development expenditure as a percentage of GDP. However, high-technology exports from Australia are significantly lower than most developed countries in the world (as a proportion of R&D expenditure), highlighting that although Australia is not underperforming in innovation, its slow rate of commercialisation is a key weakness in the development of a knowledge-based economy,” the report states.

Key points from the AECgroup report include (this is only a snapshot, please refer to the full report):

The model used to identify the direct and flow on economic impacts of the AIC programs, used four measures:

1)      Output: the gross value of goods and services transacted, including those used in the
         development and provision of the final product

2)      Value added: the value of output after deducting the cost of goods and services inputs in the
         production process (net contribution).

3)      Income: the level of wages and salaries paid to employees of the industry under consideration
         and to other beneficiaries

4)      Employment: part and full time positions generated both directly and indirectly

The report only includes economic activity that would not have happened without AIC assistance.

It estimated that the TechFast program could generate a total annual benefit to Australia of up to $221.2m (output), 817 new FTE positions, $101m in value-added and $55.9m in new incomes each year. This was the high scenario (increase in business turnover of 25%), a low scenario of 10% was also included in the report. AECgroup interviewed 10 TechFast businesses out of the 149, which had taken part to date.

It estimated that the Ideas2Market program (which was only conducted in Queensland) could generate a total annual benefit of $9.4m (output), $4.3m (value-added), 46 new employees and $2.4m in additional incomes. AECgroup interviewed 10 Ideas2Market workshop participants.

The TechClinic Program is still a relatively recent initiative but the report estimates that if its success is in line with that of TechFast and Ideas2Market, it could result in up to $9.6m of additional output per annum over the next five years on the basis of activities conducted to date.

A copy of the full report can be viewed here.

The video summary can be viewed here.

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