The productivity conversation needs commercial voices
While there has been a very long list of policy influencers vying for an invitation to the productivity roundtables, the list of who made it through the door reveals a striking insight into Government policy setting. The mix of experts diagnosing innovation are heavily biased towards academics, research institutions and industry associations. Commercial leaders in the room tend towards financial services and the investment sector – venture capitalists, private equity partners, and bank executives – with some foreign multinational country heads to round out the mix.
What seems to be missing are the commercial leaders with real-world experience translating innovation into market success. Australian company executives who’ve spent decades competing in global technology markets, building commercial relationships with research institutions, or scaling Australian innovations internationally.
It is no surprise that Australian innovation policy reflects this institutional perspective. Calls continue for more research funding, or investment support to de-risk projects. We continue to focus on academics and VCs for innovation, expecting them to develop commercial capabilities. No wonder our innovation policies keep recommending theoretical solutions for commercial problems.
The missing commercial perspective
Rarely do we hear from commercial organisations with proven track records in global market development. Missing are the executives who’ve spent decades competing in global technology markets, building commercial relationships with research institutions, or scaling Australian innovations internationally.
This isn’t a criticism of research expertise – Australia’s academic leaders have built world-class research capabilities that provide the foundation for innovation success. The problem is expecting research experts to diagnose commercial translation challenges they haven’t personally navigated.
Commercial translation requires different competencies from research excellence and venture capital. Academic leaders understand peer review, research integrity, and institutional governance. Investment professionals understand capital allocation and financial risk management. Company-building leaders understand customer discovery, market validation, and competitive positioning under pressure from international rivals – fundamentally different from capital allocation and investment analysis.
Australia’s innovation policy reflects this gap, funding research institutions and expecting them to develop commercial capabilities, rather than local companies with proven track records in global market development.
The research bias
Current proposals for establishing Australian Fraunhofer institutes demonstrate this bias in policy. Academic experts focus on institutional structure, applied research capability, and university partnerships. They miss the critical success factor that Fraunhofer works because of commercial discipline, not research excellence. Fraunhofer’s organisational DNA was founded on commercial excellence that engages research, not a research organisation attempting commercial activities. This commercial governance from inception creates entirely different capabilities compared to research institutions retrofitted for commercial purposes.
Academic policy experts understandably focus on what they know – research capability, institutional coordination, and applied research excellence. Commercial leaders recognise that successful technology translation requires commercial governance, market discipline, and customer accountability from organizational inception.
Cautionary tale
Britain’s £2.5 billion Catapult experience proves this diagnostic gap matters. Despite world-class research and substantial funding, UK Catapults failed to achieve anywhere near the industry revenue of Fraunhofer institutes, because academic governance structures struggled with commercial accountability requirements.
The fundamental issue wasn’t research quality, nor was the amount of funding. It was expecting institutional leadership to manage commercial enterprises, which are entirely different competencies.
Diminishing opportunity
What current policy discussions consistently overlook is Australia’s existing commercial translation capability. We don’t need to start by creating German-style institutes, we just need to start listening to our own local success stories. We need to start supporting Australian companies that already possess commercial maturity and global market experience in the context of our local economy.
IMDEX demonstrates commercial leadership in mining technology translation. The company generates revenue by creating products and services that solve real industry problems, competing internationally against global technology leaders. This commercial discipline drives innovation priorities and technology development decisions.
Hansen Technologies achieved similar success in utility software through sustained commercial development and international market expansion. The company succeeded through market-driven R&D investment and customer-focused innovation strategies managed by commercial professionals with industry experience.
These companies represent the missing element in current policy discussions – commercial intermediaries with proven capabilities in technology translation, global market development, and sustained revenue generation.
Commercial solutions for commercial problems
Swedish policy demonstrates how supporting local technology companies to work with researchers in solving industry challenges dramatically increases productivity and creates sustainable economic growth, while preserving research institution excellence.
Swedish companies like Sandvik, Epiroc, and Atlas Copco represent commercial organisations with global market presence and proven technology integration capabilities. Australian companies like Worley, Ampcontrol, and TechnologyOne already possess similar commercial infrastructure – customer relationships, international market presence, technical integration capabilities, and commercial risk management expertise.
Completing the policy conversation
Australia’s innovation policy debate needs commercial voices alongside academic expertise and institutional leaders. Research leaders understand what creates scientific excellence. Investment and financial leaders understand the effective deployment of capital. Commercial leaders understand what translates research into market success. A balance of perspectives is essential for comprehensive innovation strategy.
Commercial leaders would naturally focus on supporting existing companies with proven market capabilities rather than creating new research infrastructure.
This isn’t about replacing academic input – it’s about completing the conversation. Research expertise provides the foundation; investors provide insights into the challenges of funding Australian innovation. Commercial experience provides the translation mechanism. Australia needs all these perspectives to achieve innovation success.
The real opportunity
Rather than building Australian Fraunhofer institutes, we should support Australian companies to become our technology translation engines. This means sustained funding for commercial organisations with established customer bases, international market access, and proven revenue generation capabilities.
Success measured through market outcomes – revenue, exports, employment creation, and international competitiveness. Commercial accountability drives innovation quality and market relevance in ways that academic metrics cannot replicate.
The question isn’t whether Australia needs more research funding. The question is whether innovation policy will include the commercial perspective necessary to connect research excellence with market success.
Commercial problems require commercial solutions. Research excellence provides the foundation, investors may provide the funding, but it is commercial leadership that provides the bridge to global markets.
Australian Innovation Exchange – Building the bridge from research to market