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Blog: How training in entrepreneurship can help Australia catch up to global innovation leaders

This article is authored by Dr Parisa Glass, Director, Innovation and Enterprise, and Kate Burling, Commercialisation and Development Manager, Innovation and Enterprise, The George Institute. It first appeared on LinkedIn and has been republished with their permission.

I’ve written a few articles over the last year about the importance of innovation in health research (you can read them herehere and here). Through these pieces I’ve explored questions such as ‘how is Australia doing in this field compared to other countries?’, ‘what can we learn from these countries?’ and ‘how do we improve our performance nationally?’ It follows that my colleagues and I have been thinking lately about how to bridge gaps, and a few interactions recently have led me to ask, ‘how can training in entrepreneurship help Australia catch up to global innovation leaders?’

Time and again when discussing entrepreneurship or commercialisation opportunities with researchers, we hear the same two points:

  1. “I’m interested in pursuing commercialisation, but I don’t know if there is anything in my research that has commercial potential”, and
  2. “I might have an idea with commercial potential, but I wouldn’t know where to start.”

Translation of research through commercialisation in the Medical Technologies and Pharmaceuticals industry is a priority for the Australian Government. It was selected as a high potential sector during the establishment of the Industry Growth Centres Initiative in 2015 aiming to drive innovation, productivity and competitiveness across 6 industries. These Growth Centres were designed to increase collaboration and commercialisation, improve access to global supply chains and international markets, optimise the regulatory environment and improve management and workforce skills. Part of the MedTech Growth Centre’s focus is to bridge the gap between the academic, health sector, research, innovation, application and commercialisation of MedTech in Australia. And as part of this we are excited to let you know we are planning a pilot program to contribute to this goal! But first let me explain in full why I think this is needed.

Australia’s Innovation Ecosystem in Academia

So how does Australia fair compared to other countries in terms of research and innovation?

According to a report from the Department of Education and the Department of Industry, Australia performs strongly on research excellence with some of the best research outputs in the world. However, historically we perform relatively poorly by international standards in our ability to translate publicly funded research into commercial outcomes. This is evident when you compare innovation inputs (like research and investment), with innovation outputs (like new products, patents, and new companies) using the Global Innovation Index Innovation Efficiency Ratio, where Australia ranks 81st out of the measured 143 countries. This indicates that we are investing far more money, resources and time in producing innovations than we are seeing returned in the form of new evidence-based technologies, inventions and improved processes. In fact, in 2012, only 10% of all the patents filed in Australia were filed by Australian residents. The remaining 90% were inventions created overseas by companies hoping to sell in Australia.

The report cites several reasons for Australia’s difficulty in capitalising on research:

  1. There is, overall, insufficient collaboration and transfer of knowledge between researchers and industry
  2. The incentive structure at universities is still geared toward academic and research excellence markers (more than translation, commercialisation successes or industry collaboration)
  3. The lack of business capabilities in development, production and distribution within academic can act as a roadblock to commercialisation.
  4. Career mobility constraints for researchers wishing to move between the different academia and industry.

Sadly, it seems true that in Australia the traditional academic career paths give little recognition for skills and knowledge developed within industry, and most PhD programs place limited focus on the skills and training—such as IP awareness, business management and entrepreneurship—that would facilitate later industry employment for researchers with no prior industry experience. 

Health Innovation Around the World

Given the above findings, it’s worthwhile taking a look at the most innovative countries for ideas to see how they got there.

Israel, for example, is lauded as one of the most innovative and entrepreneurial societies in the world. Known as the “start-up nation”, Israelis started 10,185 companies between 1999 and 2014. Half of them are still in operation and 2.6% have annual revenues of over $100 million.

So what do they do differently? As explored by David Yin in this article, Israel has implemented structural and political incentives that have encouraged entrepreneurship in the country and actively fostered innovative capacity in its people.

Here are a few key takeaways:

  • The country invests 4.2% of its GDP in research and development (the highest in the world). Australia by contrast spent only 1.79% of its GDP on R&D in 2020.
  • Of this investment, 30% is channelled through its universities.
  • These universities have founded their own technology transfer companies to support research commercialisation through patenting, licensing, and spinning out new companies.
  • In addition, university incentive structures have been designed to promote an innovative culture. Researchers are considered an integral part of the commercialisation process and are heavily supported in their pursuit of innovation and translation. They commonly hold positions in start-ups based on their research and their patent portfolios are often an important consideration when they pursue promotion.

We can see in this example how important it is to have a strong culture of entrepreneurship within academia, coupled with an ecosystem that incentivises and normalises commercialisation in partnership with industry in order to create an innovative, research-driven MedTech sector.

How can training in entrepreneurship close the innovation gap in health in Australia?

 

There is currently significant government momentum in Australia to address challenges – not least the establishment of MTPConnect to manage and promote the MedTech and Pharmaceutical Growth Centre. There is much the research community can do to contribute to these endeavours.

The questions I highlighted earlier shows a great need within medical research and academia for training in entrepreneurship. As well as thinking about how we foster collaboration with industry and how we incentivise commercialisation among academics, we also need to empower our researchers with the skills and knowledge they need to uncover commercial opportunities and support them from the beginning to pursue them. 

If researchers miss commercial opportunities arising from their work or are not confident in their capacity to explore the opportunities, innovation is stifled from the outset. This structural roadblock means that potential new technologies, drugs, devices and diagnostics are squashed before they even start to take shape.

In Australia there are currently various training programs designed for health entrepreneurs who already have a business idea and minimum viable products, however there exists a gap in the market for entrepreneurship and innovation training for health professionals and researchers who have limited business experience and require foundational training on the process of commercialisation. This gap is being targeted by MTPConnect and the Researcher Exchange and Development within Industry (REDI) initiative. As a key player and partner in this initiative, we at The George Institute are creating training to meet the needs of our medical researchers.

We think this foundational training should focus on:

  1. Recognising unmet needs with commercial potential and solution ideation: Using design thinking, ideation tools and problem-solving techniques to identify new opportunities that arise from research.
  2. Idea validation and market analysis: The ability to critically evaluate ideas for commercial viability in healthcare market, so that researchers are equipped with knowledge and tools to take the necessary next steps after an opportunity is identified. This training would include gaining clinical validation for commercialisation, developing critical health business skills, understanding of the regulatory environment and pursuing technical validation.
  3. Communication skills: To enable researchers to connect industry partners, find collaborators and persuade investors. The ability to influence a variety of audiences through effective persuasion, communication, thought leadership and pitching skills.

It is critical that we empower researchers and academics at the early stages of commercialisation. We believe, this will not only prevent the best ideas from being overlooked but also contribute to a more innovative and entrepreneurship MedTech and pharmaceutical sector.

We have built a foundational training program for health researchers at The George Institute. This pilot program, launched in April 2021, is designed specifically for health professionals ensuring it is easily applicable and relevant to their day-to-day work. We plan to offer this training to other medical researchers in 2022. If you are interested in getting involved, please contact us.