National Reconstruction Fund: consultation paper

Research and Innovation
D

27 January 2023

National Reconstruction Fund Taskforce
Department of Industry, Science and Resources
Australian Government
NRF_Consultations@industry.gov.au

Dear National Reconstruction Fund Taskforce,

The University of Queensland (UQ) welcomes the opportunity to contribute to the National Reconstruction
Fund (NRF) Consultation Paper. UQ supports the broad aims of the NRF to diversify, and transform
Australia's industry and economy to help create secure, well-paid jobs, secure future prosperity, and drive sustainable economic growth. UQ would also highlight the importance of not just “creating” new jobs but also the importance of retaining and sustaining sovereign innovation capability, including the scientific workforce, research infrastructure and innovation support structures. Understanding the opportunity presented by existing areas of national competitive advantage will be critical to achieving the objectives of the NRF, and to cementing the NRF’s importance as a key component of Australia’s innovation system.
A large portion of Australia’s R&D capability is embedded within our world-class universities. Recent figures indicate ~40% of Australia’s total R&D, and ~80% of public sector research are conducted within the higher education setting. Most importantly, 87% of discovery research, the engine room of national innovation, is conducted within our universities. Within the sector there are dedicated structures (such as
UQ’s UniQuest) and significant expertise devoted to research translation. The Australian university research sector’s strength and demonstrated capacity to translate and commercialise research programs are potentially a major competitive advantage for investments reflecting the priorities of the NRF. At a national scale, Australia’s university research and innovation capabilities are an enormous and underutilised resource. Independent modelling by London Economics estimates that Group of Eight (Go8) research activity contributed a $10 return to the private sector for every $1 invested in Go8 research income. Additionally, a 2021 CSIRO report, Quantifying Australia’s returns to innovation, found that, at a conservative estimate, $1 of R&D investment in Australia creates an average of $3.50 in economy-wide benefits and a 10% annual return.
UQ believes that a strategic focus and investment into projects that will capture new high-value market opportunities will enable the Australian Government to harness the enormous potential of the nation’s research and development (R&D) capabilities to drive positive economic, environmental, health, and community impacts. The priority areas identified in the NRF Consultation Paper include domains where transformative change will emerge from University research programs. The investment model indicated in the Consultation Paper, which excludes grants and specifies a minimum positive rate of return from specific project investments, may limit the involvement of higher education institutions if models of return on investment used by the NRF do not allow for the substantial time it takes to commercialise research outcomes to deliver a net commercial gain. In order for Australia to build sovereign manufacturing capability and capacity, we need to grow the surrounding ecosystem to ensure efficient and cost-effective manufacturing of homegrown medical, agricultural and other innovative technologies. Universities are obvious places where this can happen given their dominance in national and global knowledge leadership.
As Federal Industry and Science Minister, Ed Husic, noted in November 2022, Australia has low national investment in R&D as a proportion of GDP relative to OECD averages. An increase in national R&D spending from <2% towards the OECD’s 2020 average of 2.67% would be a powerful stimulus for research and innovation activities aligned with areas of national priority, including those of the NRF. The embedded capability and quality in our national research sector provides a robust platform to support expanded priority-driven and industry-engaged R&D activities nationally.
Furthermore, if the NRF seeks to grow Australia’s sovereign capability and competitive advantage in priority areas such as renewables, medical science, agriculture, quantum and resources technologies, university research programs will be critical to this endeavour. The research infrastructure and other support capabilities embedded within our higher education institutions will be essential in supporting the progress of innovation from discovery to market. Examples aligned with NRF priority areas include clinical trials infrastructure, materials testing laboratories, biofabrication, biomanufacturing and plant growth facilities. Central to mobilising these existing capabilities into the translational agenda of the NRF will be the concept of precincts, as outlined recently by the Business Council of Australia in their submission, that would bring Industry, Government and University capabilities together in key focal areas.
The Consultation Paper asks what complementary reforms and other levers are required to support the objectives of the NRF. In light of the factors mentioned above, we would strongly encourage the NRF to work closely alongside parallel policy efforts underway in relation to research funding, particularly the
Universities Accord, the Review of the Australian Research Council and the implementation of the 2021
National Research Infrastructure Roadmap. UQ would strongly encourage a whole-of-government approach to supporting the implementation of the NRF, aligning efforts across Industry, Infrastructure,
Innovation, Health, Education, Environment and other portfolios. It is imperative that the design of the
NRF considers the role that universities will play in this agenda as enablers and drivers of innovation, including the constraints that will curtail that involvement. These constraints include the key structural shortfalls in the funding of indirect costs of research, and the employment insecurity within the research workforce.
Given the depth of expertise at UQ across a wealth of research domains, we would welcome the opportunity for ongoing engagement and consultation as the process continues, and as stakeholders consider how to activate in response to the emergent priorities resulting from the NRF consultation process. UQ commends the Department’s recent work to develop domain strategies for Quantum, Critical
Minerals and Robotics, and we would encourage a consistent approach to consultation and strategy development across NRF priority areas.
Thank you again for the opportunity to comment on the Consultation Paper.

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