Strategic Examination of Research and Development: discussion paper

Submission from the Australasian Research Management Society (ARMS) to the Independent Expert
Panel and the Department of Industry, Science and Resources re the Strategic Examination of Research and Development (SERD)

The Australasian Research Management Society (ARMS) appreciates the opportunity to contribute to the
Strategic Examination of Research and Development (SERD). As the peak body representing more than 4000 research management1 professionals across Australia, New Zealand and Singapore, ARMS members support and enable research and development, being at the forefront of interactions with researchers, their research institutions, industry, and other organisations. As a result of this direct involvement, ARMS members are also active observers, problem solvers and stakeholders with respect to the issues faced.

ARMS commends the Government's proactive approach in evaluating and strengthening Australia's R&D ecosystem to foster innovation and societal advancement, however, urges Government to act to address the systemic issues which have been well-recognised over at least 15 years, specifically the need to intensify BERD and promote industry-led incentives to engage with research organisations.

In our response below, we also emphasise the importance of investment in research management and the research management workforce as an essential component of successful R&D and economic development.
We have focussed on those topic/ question areas that are most relevant to research management or where, as research managers, we are able to draw insights.

4. What types of funding sources, models and/or infrastructure are currently missing or should be expanded for Australian R&D?
Simplification of the Australian R&D funding landscape and improved programmatic management
Over many years, ARMS have observed the growth in the number of niche and often ephemeral R&D funding programs, especially from government agencies at both state and federal level. These are commonly administered by people that are not experienced in programmatic and funding management or have a poor understanding of research and how it is undertaken and managed. Consequently, significant, and unproductive time and effort is spent by researchers and research management professionals in deciphering the intent of such programs and applying to poorly designed funding opportunities via poorly designed applications. Many parts of government are also not aware of complementary or similar programs in other parts of government.
Why is this important? Because it means that productive time is wasted by government, researchers, and their institutions.

ARMS supports the core roles of the three national funding councils (ARC, NHMRC, MRFF) in funding basic and applied research, and welcomes the previous and current reforms to simplify the programs of the NHMRC and
ARC. We also welcome the broader use of the ARC research management system (RMS) by other Australian
Government agencies as a mechanism to reduce the administrative burden associated with funding programs.

However, ARMS, like many other organisations, would like to see further consolidation across government agencies of funding programs to better focus and refine the objectives of such programs and look for economies of scale and scope. A more deliberative “grand challenge” approach is welcomed. By doing this, more productive effort can be spent on programmatic management which is a common factor in many successful overseas economies.

1 Research management can be defined simply as every activity that supports and enables R&D.

AUSTRALASIAN RESEARCH MANAGEMENT SOCIETY

www.researchmanagement.org.au arms.adminofficer@flinders.edu.au

c/- Flinders University, +61 8201 2525
Sturt Road, Bedford Park, SA 5042
We acknowledge the lasting impact of the Cooperative Research Centre program and potential of the recent
Trailblazer initiative. These are both important models of collaborative research-industry/ external engagement but are not without their issues. Both are “club-based research and innovation models,” that is, both research organisations and industry partners need to be in the club (i.e. members of the CRC or Trailblazer) to participate and benefit from the program. While this may seem fine in many respects, the issue is that many organisations
(both research and industry) that have valuable skills and expertise to contribute may not be involved in these programs because they were not invited to participate and the barriers to entry post-hoc are significant. A more deliberative model of programmatic management would add value to the Australian R&D funding landscape.

Importance of indirect costs of research
ARMS notes the discussion on the pressure on research institutions’ operating models and the importance of indirect costs for research. For years, our members have advocated for reform such that the indirect costs of research are explicitly recognised and paid by the funders and users of research. In the UK, funding councils funding ~80% of the Full Economic Cost of research to universities, while in the US, institutions have received
Facilities and Administrative funding of 50-70% on US Federal Funding. In Australia, there has been no significant reform of the block grant funding model for universities since the 2015-Watt Review, which simplified the approach to block grant funding. While the simplification was welcomed, whether the reforms incentivised universities or not to improve collaboration with business and other end-users cannot be fully determined, as many universities were already on this trajectory.

ARMS would like to reinforce the importance of recognising and funding the indirect costs of research, be it through the block grant or from end-users of research. With respect to the latter, we note that too often, commercial end-users do not expect that they should pay for such costs even when they expect full ownership of intellectual property. Many government grant programs also restrict wholly or in part (normally the former), the ability of research organisations to recover indirect costs. It is vital that government sets an example in this regard and reinforces to end-users the expectations that they will pay for indirect costs of commissioned research. With respect to the former, the most substantive reform required is to inject additional funding into support the indirect costs of research of research organisations, particularly universities, which are being increasingly constrained in their ability to diversify their external revenue sources.

5. What changes are needed to enhance the role of research institutions and businesses (including startups, small businesses, medium businesses, and large organisations) in Australia’s R&D system?
For Australia to be the future economy it aspires to be, GERD simply must increase. As starkly illustrated in
Figure 9 of the Discussion Paper, in 2022 BERD was 64% of 2009 levels, GERD was 59% while HERD was 104%.
BERD fund source is primarily from business, i.e. business has been investing in business with little investment into the research sector via HERD. Given that Australia’s GERD% has declined, the current approach is not working. Incentivising universities to engage with business is not working – the issue is seen to be a university problem, while arguably it is equally a business problem and the impact of the R&D Tax Incentive as a lever appears to be minimal. A different model of support and incentivisation is required – see the response below to Qu. 9.

ARMS also makes the following suggestions to enhance the role of research institutions:

Enhancing Research Impact and Translation
The impact potential of research remains poorly understood by business and other research end-users. ARMS suggests:
• Support for Impact Assessment: The Australian Government has previously undertaken engagement
and impact assessment exercises as part of the Excellence in Research Australia initiative. While this
has been discontinued pending the establishment of a new research evaluation exercises, many
research institutions continue to evaluate research impact at their institutions due to its recognised
importance. However, a systematic approach to research impact assessment is lacking, and it is
challenging for research institutions to conduct this analysis when the impact resides with end-user
organisations that may be hesitant to participate in impact assessment exercises.

We propose that the Australian Government systematically embed and provide funding for the
evaluation of research impact into co-funded Government-Industry R&D programs wherever possible.
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We note case studies such as those related to the R&D Tax Incentives, but more can be done to develop
and promote such examples.

This extends to programs wholly funded by the Australian Government and/or where the Government is
the primary end-user, such as instances where research informs or evaluates policy development and
program implementation. It is important to note that the commonly applied waiver of the moral right of
attribution in government contracts makes it more difficult to trace the chain of connection leading to
policy impact.

• Practical Commercial Translation Support: While research organisations generally understand the
requirements for the commercial translation of research, they are often limited in terms of providing
enough practical support for commercialisation. Early stage funding such as Australia’s Economic
Accelerator are welcomed, but institutions are limited in terms of having enough on the ground
translation professionals or initial funding to undertake strategic IP/ patentability reviews or to protect
IP. While block funding (if available) could be used for this purpose, given the limited funding available
which doesn’t cover the indirect costs of research, institutions often must make difficult choices in
terms of how much they can support commercialisation.

We recommend that additional investments are explicitly made to support the commercial translation of research. For example, research institutions could submit proposals (individually or collaboratively or in a network model) to bring on board additional research commercialisation professionals in priority sectors.

Elevating Research Management as a key component of the R&D workforce and ecosystem
Effective research management is pivotal in translating research investments into tangible outcomes.
Benchmarked economies such as the US, UK and many countries in the EU all have well-established and well- recognised research management workforces, while in many other countries this is still emerging (see Yang-
Yoshihara, Kerridge, Poli (2023)2). ARMS advocates for the explicit recognition of research management as a strategic priority and essential R&D workforce element within the national R&D framework. This recognition is important to enable the following:
• Institutional Resource Allocation: Ensuring adequate funding and resources are allocated to support
the infrastructure and personnel essential for effective research management practices.
• Professional Development: Investing in continuous training programs to equip Research Management
Professionals with the skills necessary to navigate the evolving and increasingly complex research and
innovation landscape.
Streamlining Administrative Processes
• Reducing administrative burdens can significantly enhance research productivity. ARMS advocates for
Regulatory Harmonisation: Aligning regulations and compliance obligations across funding bodies
and institutions to simplify compliance and reporting requirements.

8. How can First Nations knowledge and leadership be elevated throughout Australia’s R&D system?
ARMS considers First Nations knowledge and leadership an essential element of Australia’s R&D system and indeed has recognised it as a priority in ARMS Towards 2030 Strategic Plan. In this regard, it is vital to support the growth of indigenous research through more Indigenous researchers, greater funding investment in indigenous research, and to actively incorporate Indigenous voices and perspectives into research management.

There are too few indigenous research management professionals, and we call upon the Australian Government to work with ARMS, First Nations representative organisations and Indigenous researchers to support the development of an indigenous R&D workforce that also includes indigenous research management professionals.

2 M. Yang-Yoshihara, S. Kerridge, S. Poli (2023) “Emerging Trends and Insights in Research Management and Administration”. In: “The Emerald
Handbook of Research Management and Administration Around the World”. Section 6, pp 809-817. ISBN: 978-1-80382-702-5, eISBN: 978-1-
80382-701-8.
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9. What incentives do business leaders need to recognise the value of R&D investment, and to build R&D
activities in Australia?

Many of the current incentives to promote research-industry collaboration are focussed on incentivising
research organisations to engage with industry. Yet the experience of research institutions and research
management professionals is that many of the challenges lie in finding willing business of sufficient size,
turnover and absorptive capacity to engage with them.

ARMS considers that further incentivisation should not occur via further manipulation of the Higher Education
block grant drivers but through refinement of the current R&D Tax Incentive (RDTI) system. There has not been
a substantive review of the current system since the most recent suite of changes were implemented and we
encourage the SERD review panel to consider opportunities for reform. In that regard, it would be helpful to
know how many of the 2,287 organisations with R&D expenditure claims of >$1M in the ATO 21/22 RDTI
Transparency Report undertook R&D with Registered Research Organisations (RROs) including universities and
medical research institutes. ARMS considers that one way in which the RDTI could provide for further
incentivisation is for an additional R&D Tax Incentive to be applied when eligible companies demonstrate that
they have engaged with RROs to undertake research. A minimal threshold level of research expenditure at a
RRO would be required, which be proportional to the size of the company.
In addition to the above, we encourage consideration of the following:

Fostering Collaborative Partnerships

Broad-based engagement and interaction across research organisations, industry, government, and the
broader community is essential for a vibrant R&D ecosystem. ARMS recommends more diverse opportunities
for Cross-sector Mobility, for example initiatives that encourage the movement of research management
professionals and researchers between sectors to promote knowledge exchange and collaboration.

In conclusion, ARMS is committed to collaborating with the Australian Government and other stakeholders to
enhance the nation's R&D system. By prioritising effective research management, fostering collaboration,
enhancing impact translation, and streamlining administration, we can collectively strengthen Australia's
position as a global leader in research and innovation.

We look forward to further engagement in this consultation process and are prepared to provide additional
insights and support as needed.

Contacts:

Dr Tania Bezzobs, President, Australasian Research Management Society – email:
ARMSPresident@researchmanagement.org.au

Ms Mel Trebilcock, Partnership, Education & Policy Manager, Australasian Research Management Society
(ARMS) – email ARMSPEP@researchmanagement.org.au

+61 8201 2525

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