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Government welcomes release of CRC review.

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Innovation, Industry, Science and Research: Ministers and Parliamentary Secretary


Senator Kim Carr, Minister for Innovation, Industry, Science and Research, has welcomed the release of the review of Australia's Cooperative Research Centres (CRC) program, as an important contribution to the broader examination of Australia’s National Innovation System.

The CRC review was undertaken by Professor Mary O’Kane, who was supported by the Collaboration Working Group of the National Innovation System Review. That review is now due to report to the Government by 29 August 2008, providing a Green Paper to be released shortly thereafter.

The Government will be considering the recommendations of the CRC review along with those from the review of the National Innovation System, and will respond with a White Paper later this year.

"The CRC program was established under the Hawke Government in 1990. Over that time it has been extraordinarily successful, with the Australian Government committing nearly $3 billion to establish 168 CRCs. CRCs have also produced over 4,650 industry-ready postgraduates, including over 2,460 graduates with PhDs," Senator Carr said.

"However, over recent years the focus and emphasis of the program has shifted.

"The previous government cut public interest research out of the program. We committed to filling that void and this report lays out the options for reviving the CRC program.

"This review has provided a timely opportunity for all stakeholders to assess the focus of the program. It has given everyone a chance to think about how we can improve CRCs to ensure they deliver the best possible outcomes for researchers, industry and the entire Australian community."

The review makes recommendations in relation to:

• funding and frequency of selection rounds; • objectives of the program; • broadening participation; • co-funding arrangements; • program administration;

• evaluation arrangements; and • the positioning and integration of CRCs within the National Innovation System.

The review also recommends the creation of a new program to support the development of closer

Innovation Minister > Senator the Hon Kim Carr

Media Release

Senator the Hon Kim Carr

05 Aug 2008

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relationships in those industries and sectors where little collaboration currently occurs.

"We need to make a greater effort to bring researchers and innovative companies together - it is vital to a healthy innovation system, but an area in which Australia has been falling further behind our competitors over recent years.

“Breaking down barriers and drawing upon different skills, perspectives and experiences lies at the heart of the CRC philosophy," Senator Carr said.

Senator Carr also expressed his gratitude to Professor O'Kane, the Working Group and the National Innovation System Review panel members who contributed to the review.

"The Group has worked diligently to produce a thoughtful and intellectually rigorous report. In particular, I know Professor O'Kane's commitment and enthusiasm has been instrumental in driving the review process,” Senator Carr said.

More information about the CRC review, including the report, can be found here

A summary of the review's recommendations is below.

Media contact: Catriona Jackson, Minister's Office, 0417 142 238 Emeritus Professor Mary O'Kane, 0419 893 732

CRC review recommendations

Recommendation 1 1.1: That i. a re-focused and modified CRC Program continue, and ii. the next evaluation recommend whether the Program continue in light of the modifications and the impact of changes arising from the Innovation White Paper.

1.2: That i. funding be injected into the Program to allow for annual rounds to take place over the next five years; ii. there be a selection round at least once a year so that emerging market failure/creation and urgent public good issues can be addressed quickly; and iii. the Program encourage CRCs of varying lifespan (typically 4-7 years but up to a maximum of 10 years where appropriate), with funding up to a maximum of $45M over the life of the Centre.

Recommendation 2 That: i. the prime objective of the CRC Program be to provide support for pre-competitive or pre-applicative research ventures between end-users and researchers which tackle a clearly-articulated, major challenge for the end users addressing identified risk gaps such as: • a significant challenge in creation of a new industry area; or • a significant challenge in an existing industry sector where the risk involved in solving the challenge is too great for a single firm to tackle alone; or • a significant challenge in the provision of public goods and services; or • a significant challenge in an area of community or social benefit (and not restricted to an area represented by government portfolios). The solution to the challenge should be innovative and of high impact and capable of being deployed rapidly by the end-users to good effect. Each CRC should be of high national benefit with significant

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spillovers. ii. a secondary aim of the Program be to encourage closer working ties between Australia’s public-sector research organisations (universities and PFRAs) and end-user groups and to encourage end-user-focused education, especially at the PhD level.

Recommendation 3 3.1: That the CRC Program guidelines be modified: i. to permit much greater flexibility than at present including in organisational structures, governance models, lifespan (typically 4-7 years but up to a maximum of 10 years where appropriate), membership arrangements, intellectual property arrangements and size of Commonwealth grant (up to a maximum of $45M over the life of the Centre) but ii. that there be even higher requirements than at present on applicants to demonstrate why their proposed structure, membership arrangements, research plan, end-user absorptive capacity, leadership, key research people, outputs, likely impacts, performance metrics, governance, management, intellectual property arrangements, Centre lifespan and funding are appropriate to deliver a solution to the identified challenge and the fast and effective uptake of results by end-users.

3.2: That the legal agreement between the Commonwealth and the CRC be as simple as possible, with the recent practice continued of one party (the CRC itself or an agreed agent) signing on behalf of the CRC.

3.3: That the legal agreement include provisions requiring the CRC to be fully compliant with all relevant Commonwealth and State research integrity and ethics codes and guidelines and with all international treaties dealing with these matters. Records of all ethics applications and their current

status must be kept up to date and be available at all times for inspection.

Recommendation 4 That a new program be established to assist industry and other end-user groups to undertake strategic analysis or innovation mapping projects and to establish collaborative ventures between end-users and researchers, including publicly funded research institutions. The priority is to support new collaborations in areas with little history of collaborative activity or a low research and development base, particularly service industries and those sectors populated by SMEs.

Recommendation 5 That participation in the CRC Program be encouraged, allowed or required as follows: i. SME and service industry involvement in CRCs be specifically encouraged; ii. CRCs addressing challenges across several service industries be encouraged iii. strong engagement with international research groups working on similar challenges be encouraged including, where appropriate, joint projects; and that funding of research undertaken overseas be allowed; iv. CRC applications in Humanities and Social Sciences fields be allowed and encouraged; and v. CRCs continue to be required to have at least one Australian university as a partner.

Recommendation 6 That the approach to funding of CRCs be redesigned in accord with the following: i. the share of public funding of any CRC be aligned to the level of likely induced social benefits; ii. CRC end-user applicants normally be expected to provide more than half the cash contribution towards the CRC;

iii. in-kind contributions not be rated the same as cash during the selection and reporting processes, but treated as an important secondary factor. In turn, tied in-kind contributions (which should be declared at the time of application and in annual reporting) should not be rated as highly as untied in-

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kind contributions; iv. there be scope to modify the application of recommendations ii and iii to the advantage of end-user applicants where they are predominantly SMEs or from the community sector; v. universities and PFRAs be encouraged but not explicitly required to make cash or in-kind commitments to a CRC bid - but that, where they do make contributions, they be described in the same way as for other university/end-user collaborations (e.g. ARC Linkage Grants) and that they include details of program leaders and key researchers and their time commitments; vi. predominantly public good applications be scrutinised to see that they do indeed have the funding support of the ‘home’ Commonwealth and State portfolios or authorities; or, where this is not the case, that the reasons why are addressed as part of the application; and vii. there be no upper limit on postgraduate stipends offered within CRCs.

Recommendation 7 7.1 That i. the CRC Program be administered at senior levels by secondees from across the NIS who have experience with similar programs as successful research end-users, researchers and research administrators. ii. CRC Committee members be chosen to ensure the committee has expertise in program design, delivery and review, and significant experience in successful joint ventures deploying research results.

7.2 That the selection process involve layered peer review against detailed selection criteria which include the following: • the risk being addressed (how significant is the problem? What is the current state-of the- art worldwide in addressing this problem?) • the quality of the research approach and plan and how it will address the identified risk • the capabilities of the participants (how well do the proposed end-users connect with the identified problem, and how highly regarded in their field are the proposed researchers?) • the quality of the leadership and the research and management teams • the quality of the education program • the proposed success/progress metrics • how the end-user partners will deploy the research findings and gain advantage from the Commonwealth investment • the expected wider spillover benefits and how these will be taken up by parties outside the collaboration • the genuineness of the joint venture and alignment of interests (i.e. checking that it is not ‘hollow collaboration’), and • the suitability of the proposed accountability and governance arrangements including the management of the joint venture.

7.3 That i. CRC applications be submitted using a two-stage process. Applicants would initially make the case in a written application(s) and, if shortlisted, following peer review, would be given the chance to augment this at interview; ii. the CRC Committee establish disciplinary-based standing committees drawing on expertise in the ARC and NHMRC to manage the peer-review processes associated with the first-stage culling, and second-stage ranking. These committees should use a common formal process which should include giving the applicant CRC the chance to comment on assessors’ comments in writing; iii. the CRC Committee consult with the ARC and NHMRC to develop a joint database of assessors to do the rigorous assessing of CRC applications for consideration by the standing committees; iv. the standing committees rank proposals assigned to them on all criteria after obtaining sufficient peer assessments, and then overall, and make recommendations to the CRC Committee; and v. the CRC Committee consider all the input and recommend a final list to the Minister.

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7.4: That a common core of evaluation metrics be developed that would apply across all CRCs and would allow for cross-comparison between them. These should include, at minimum, metrics on research quality, end-user uptake, international connections for national benefit, and researcher education. As well as reporting on the core evaluation metrics, it is recommended that CRCs, in their annual report, report on measures specific to their CRC and agreed at the time the CRC is awarded.

7.5: That annual reports be examined closely for early warning signs of difficulty.

7.6: That a major hard-nosed review of each CRC using a common evaluation framework take place at the end of each 3 years - or more frequently if there are early warning signs of failure - of the life of a CRC, with a final review as it is finishing; and that it be an explicit condition of funding that termination be an option if the review’s findings are adverse.

7.7: That the CRC Committee establish a Review Sub-committee to i. oversee the review process; ii. propose the composition of the initial and subsequent review panels to the CRC Committee for approval. The same review panel should be used for all CRCs in a field of application in order to

ensure cross comparison. Each review panel to be chaired by a Sub-committee member; iii. consider feedback from the review panels; iv. prepare a report for the CRC Committee on each review round including a list of CRCs reviewed, ranked by success to date; and v. propose which CRCs continue to receive Commonwealth funding under the Program and which should no longer be funded.

Recommendation 8 8.1: That the CRC Program build close policy and operational links with other collaborative research programs in the National Innovation System and that it articulate well with the CSIRO National Research Flagships Program, ARC Linkage Program and the NHMRC Partnerships for Better Health Program. While the CRC Program should focus more on funding large end-user driven collaborative pre-competitive research, the Linkage Program should continue to fund simpler end-user/university partnerships. In line with the move to larger Linkage grants, these programs should complement the CRC Program by supporting long term-basic/strategic research with smaller, shorter and more flexible arrangements between groups of firms either independently or in conjunction with universities and public sector research agencies. The administrators of these programs (and related State programs) should meet regularly to discuss applications that might be eligible to either scheme.

8.2: That i. a common core of broad evaluation measures be developed that would apply across all Government innovation funding programs (especially programs involving collaboration) and their projects; ii. common application and review forms/processes be used as far as possible across all innovation funding schemes, especially schemes involving collaboration (including Federal & State schemes); and iii. a much improved capacity to review innovation funding programs (especially schemes involving collaboration) be developed along with a robust capacity to cease funding weaker projects. Sometimes international review mechanisms are needed.

8.3: That the ARC Centre of Excellence Program be enlarged and become annual and that it encourage applications from innovative research concentrations that have proved themselves producers of high quality and high impact research through programs such as the CRC Program (but also through multi-partner, collaborative ARC Discovery and Linkage grants).

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