Engineering a collaborative culture

How can engineers and academia build a collaborative culture? The Warren Centre and Engineers Australia outline some of the key ways in which we can bring together the best minds from universities and industry.

Australian universities are among the best in the world, with their total research output ranking in the top eight countries in 2015, according to the World Economic Forum. In stark contrast with the success of inventive research, Australia ranked last in the OECD for the number of private firms collaborating with higher education or public research institutions.

Indeed, according to Christopher Pyne, the Minister for Industry, Science and Innovation, only 4% of public researchers are involved in business. In the UK, that figure is 40%.

There needs to be a shift towards more collaborative research agreements so that Australia’s research prowess can be used by private industry to drive innovative commercialisation. Despite this need, there are many challenges facing potential collaborative research agreements. Often cited are disproportionate concerns about Intellectual Property (IP) and agreement costs and more generally, a lack of awareness that the other party exists as a viable commercialisation partner.

The advantage of cooperation

More than 96% of companies in Australia are SMEs, defined by the ATO as those firms having revenue below $20 million. Almost all of these have fewer than 20 employees. As a result, the capacity for a company to engage in Research and Development (R&D) beyond those areas that directly improve revenue streams is limited, as is the time-burden of such activities.

By engaging with universities, there is significant potential for SMEs to draw upon more than just the engineering and science researchers. Business faculties are also able to provide their innovative expertise in cross-faculty agreements.

A case could even be made for SMEs to engage with universities to specifically fast-track commercialisation of past inventions, generating a reliable revenue stream that can further fund original research, rather than relying on venture capital and government investment in this increasingly competitive environment.

Another often overlooked advantage of university collaboration is the pool of talented students available. According to the University of Sydney’s Dean of Engineering, Professor Archie Johnston, students tend to be attracted to industry-funded research projects, particularly for their honours thesis and summer internships.

Students who become familiar with the host company and its technology often prove to become valuable part-time employees the following semester, tackling small projects that would otherwise consume time from more senior engineers.

Academic progression

Despite government signalling a shift in government funding methods, it is important to understand that the measure for success for an academic is still largely dependent on the number and quality of journal publications they produce. This is of little concern to an industry partner, who is motivated towards protecting research and inventions through the patent system for the value of exclusive commercialisation rights.

One of the largest IP misperceptions in collaboration discussions is the idea that patents are mutually exclusive with academic publications. Once a patent has been filed, there is no reason to prevent academic papers being published on the research.

In situations where developing a patentable invention takes years, papers can still be published regarding non-specific aspects of the invention or research without risking patent status. Indeed, two competing interests are yet more evidence of the advantage of collaborative research, given that companies are rarely concerned with publishing the scientific findings of their research.

Intellectual property

Intellectual property can be extremely valuable, often defining a large percentage of a firm’s value to capital markets. Patent expenses can also be dead weight, if unused IP sits in university repositories attracting renewal fees without generating royalty income.

However, IP does not need to be a barrier to collaboration. For example, in recent years a number of Australian universities have begun providing free IP licenses to Australian companies and individuals, such as through the Easy Access IP program, to enable commercialisation.

The proposed value for universities lie in both the societal benefits from allowing cutting-edge research to make it to market and in the expectation that further funded research collaborations will
occur with the original research team.

This is just one style of IP licensing agreements. Though the University of Sydney does not operate
an Easy Access IP program, it has established many multi-faceted industry partnerships with companies such as ResMed, Rio Tinto, Port Botany and Qantas, suggesting that some deals are more about the selective application and sharing of resources rather than arguments over IP terms.

Research collaborations

Professor Johnston estimates that 70% of industry partnerships with the Faculty at the University of
Sydney begin through existing networks. Given that only 5% of firms in Australia engage with industry
partnerships, there is an evident need for programs and initiatives to expand these networks.

There are a number of programs and organisations that draw together universities with industry partners. Federal agencies like CSIRO and Data61 (formerly NICTA) engage in both fundamental and applied research with university and industry partners.

The development of niche research clusters (through CRC programs, industrial centres for excellence and industry precincts) has proven extremely valuable.

For example, the Advanced Composite Structures CRC has produced over 100 industry-ready PhD graduates, facilitated hundreds of millions of dollars of commercialisation and brought dozens of SMEs into the local and international Industry Value Chain through collaborative research engagement. In financial terms, a 2012 study by the Allen Consulting Group determined that this CRC program resulted in 3:1 return on investment.

Establishing an agreement

There are no set rules when it comes to negotiating agreements. Each collaborative agreement deal must yield a mutually beneficial and individual agreement around an aspects of an industry partnership.

Each deal is unique, it simply boils down to where the parties’ interests lie and finding a point
that satisfies both. Our research suggests that mutually beneficial agreements may not be as
difficult as their reputations might lead one to believe.

This article was first published as Engineering a Collaborative Culture in the February 2016 edition of Engineers Australia magazine.

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