The UK tried academic leadership for commercialisation. Here’s why it failed.
Before Australia rushes to create more research institutes, we should examine what happened when the UK tried this approach. Britain’s £2.5 billion Catapult investment provides a relevant and instructive failure case study in modern innovation policy.
The UK Catapult Network was launched in 2011 with explicit intent to emulate German Fraunhofer success. Despite having access to world-class UK research, substantial government funding, and an explicit mandate to commercialise technology, Catapults consistently underperform against their stated objectives.
The lesson for Australia is clear: academic leadership capability does not translate to managing commercial processes, regardless of research quality or funding levels.
The Catapult promise vs reality
The UK government designed Catapults as “technology and innovation centres” that would bridge the gap between research and commercial application. The promise was compelling: combine British research excellence with focused applied research to create innovation powerhouses rivalling Germany’s Fraunhofer institutes.
Twelve years and £2.5 billion later, the results tell a different story.
Performance against international benchmarks:
- UK Catapults achieved a little over 40% industry revenue, compared to the target of Fraunhofer’s 70%+
- Significantly longer technology-to-market timelines than German equivalents
- Minimal systematic company generation despite massive public investment
- Poor export performance relative to domestic research capability
- Limited measurable economic impact despite substantial government funding
These results highlight the program was unable to translate research excellence into commercial outcomes, despite having significant funding support.
The Academic Leadership Problem
The fundamental flaw in Catapult design was assuming research institutions could develop commercial capabilities through funding increases and mandate changes. Despite reorganisation attempts, Catapults maintained academic leadership structures that are incompatible with commercial success.
University-style governance boards and decision-making processes dominated Catapult operations. These structures optimise for research integrity and institutional consensus, not market responsiveness and commercial risk-taking required for technology translation. Leadership and senior management were recruited primarily from academic rather than commercial backgrounds. Research credentials took precedence over commercial track records in global market development and revenue generation.
As a consequence, the Catapults tried unsuccessfully to balance research excellence with commercial outcomes, creating performance frameworks that satisfied neither objective effectively. Academic metrics (publications, partnerships) received equal weight with commercial metrics (revenue, market penetration). Similarly risk management approaches dominated commercial decisions, discouraging market experimentation and customer responsiveness necessary for successful technology commercialisation.
Commercial Capability Gap
Catapult failures demonstrate the difference between the commercial capabilities that academic institutions cannot develop within their organisational constraints, regardless of funding or mandate changes. Research-focused management lacked systematic commercial ‘due diligence’ capabilities. Technology opportunities were assessed primarily for scientific merit rather than evaluated by market viability and competitive positioning. Commercial potential remained secondary to research quality. Academic performance orientation conflicted with customer service and commercial relationship requirements. Long-term industry partnerships suffered from inconsistent commercial support and inadequate market development capabilities.
Limited commercial expertise in global market entry restricted international scaling capabilities. Export performance remained poor despite excellent domestic research capabilities and substantial government support. Academic risk frameworks prevented rapid market responsiveness and commercial experimentation necessary for technology commercialisation success. Market opportunities were lost through institutional decision-making processes designed for research, not sustainable commercial operations.
Policy Recognition and Failed Reform Attempts
The UK government has progressively recognised Catapult limitations through multiple policy reviews. The 2019 Government review findings identified “insufficient industry revenue” and “limited commercial impact” as systematic problems requiring structural changes. Recommendations focused on enhanced commercial leadership and market-focused performance metrics, though these were met with resistance from within the program. The 2021 Innovation Strategy review emphasised need for “business-led innovation” and “commercial partnerships” while explicitly acknowledging Catapult underperformance against international benchmarks. Policy direction shifted toward commercial accountability, yet the embedded governance structures continued to resist the commercial accountability frameworks. Research-focused organisational culture is often at odds with market-responsive actions necessary for commercial success, which prevented the effective implementation of policy reforms.
In contrast an evaluation of successful international models does shed some light on why academic models fail at commercial translation, regardless of research quality or funding levels. If we start with the program the Catapults were modelled against, the German Fraunhofer 70% industry funding requirement creates market discipline that UK Catapults never achieved. German institutes must satisfy commercial clients to survive, while Catapults rely on government funding, regardless of commercial performance.
Putting aside geopolitical issues, the Israeli Innovation Authority has clear commercial accountability which drives systematic success. Israeli companies receive sustained funding tied to revenue targets and export performance, creating measurable commercial outcomes.
Closer to home, Singapore’s economic development program focuses investment on building commercial maturity within companies through international market development rather than expecting research institutions to develop commercial capabilities they cannot possess.
Academic Policy Trap
While the UK Catapults produce world class research, one should not overlook the twelve years of documented underperformance and £2.5 billion in suboptimal outcomes. The approach of institutional coordination assumed that better research partnerships and increased R&D funding will solve commercialisation challenges. The UK experience demonstrates academic leadership was unable to deliver the necessary commercial capabilities through structural reorganisation, regardless of the volume of funding provided. While well intentioned, the reality was clear. Industry revenue consistently below commercial benchmarks, there was limited technology transfer and company creation, poor international market penetration despite domestic research excellence and close proximity to market, and minimal measurable economic impact relative to investment
The Australian Choice
Australia has the potential to make the same mistake, confusing our research excellence with commercial competence. It would be an easy trap to fall into. On the one hand we can distract our academic institutions by trying to retrofit them for commercial purposes, which sounds far less difficult than the proven alternative; building commercial capabilities through new dedicated commercial organisations.
Australia can avoid the trap by recognising that commercial problems require commercial solutions implemented by commercial professionals.
Recommendations
Invest funds allocated for supporting commercialisation from within our existing research ecosystem, and invest them into a dedicated commercialisation organisation, with commercial leadership, market accountability, and revenue requirements from inception. Senior management recruited exclusively from technology commercialisation backgrounds with proven track records in global market development and revenue generation. Commercial accountability, not academic credentials, determines leadership selection. Mandate industry funding targets to maintain ongoing support, creating market discipline and customer accountability from organisational inception. Commercial survival depends on customer satisfaction, not government funding continuation. Success measured through revenue generation, customer satisfaction, international market penetration, and economic impact rather than research outputs to avoid academic risk-aversion that prevents commercial experimentation and market development.
Australian capability
Australia can implement commercial-first innovation policy by supporting existing companies with proven commercial capabilities rather than creating new research institutes managed by academic leaders. We often overlook our own home grown companies with established customer bases, technical integration capabilities, and international market access. These companies can translate research outcomes far more effectively than academic institutions attempting to operate their own commercial activities.
This is not at odds or the fault of research community, quite the opposite. We must embed systematic connections between research excellence and commercial capability that leverage complementary strengths and capitalise on our research leadership rather than expecting individual organisations to develop incompatible competencies.
The real lesson
The UK Catapult £2.5 Billion experience provides clear evidence that academic leadership does not translate effectively to commercial processes. Despite world-class research, massive funding, and explicit commercial mandates, academic governance structures underperform when compared with commercial alternatives.
Australia can avoid this expensive lesson by implementing commercial solutions for commercial problems. We have excellent research institutions that should remain focused on research excellence. We also have commercially capable companies that understand markets, customers, and global scaling.
The challenge is connecting these complementary strengths appropriately rather than expecting academic institutions to develop commercial capabilities at odds with their organisational DNA.
The question isn’t whether Australia needs better research commercialisation. The question is whether we’ll learn from the UK’s £2.5 billion lesson about what definitively doesn’t work or repeat their mistakes with predictably similar results.