In universities, in public research institutions, even in the proverbial backyard sheds, vast numbers of inventive, creative types around Australia are looking for the next big breakthrough.
![](https://static.businessnews.com.au/sites/all/themes/bn2020/images/squares.gif)
![Special Report - Navigating a pathway to success](https://static.businessnews.com.au/sites/default/files/default_images/default-article-image_1440x960_0.jpg)
In universities, in public research institutions, even in the proverbial backyard sheds, vast numbers of inventive, creative types around Australia are looking for the next big breakthrough.
And judging by the latest data compiled by the Federal Government, many of these people are successful.
About 570 new inventions are disclosed every year as a result of research in universities and public institutions like CSIRO, and more than 600 patent applications are filed by Australians each year both here and in the US.
In many cases, creating the invention or technology breakthrough can be the easy part. The daunting challenge is to then get the product profitably into the market.
Companies like Embedded Technology, Entecho, Caldeon and Cool Energy, profiled in the following pages, are among many in the midst of commercialisation.
For some inventors and technologies, the best option is negotiate a licensing deal, typically with an established player in the target industry.
Australia’s universities negotiate about 400 licensing deals each year, generating gross income of about $64 million per year.
But Dr Andy Sierakowski, director of the University of Western Australia’s Office of Industry and Innovation, says there has been a growing realisation over the past 10 years that more value could be gained by taking equity in start-up companies.
Each year about 50 start-up companies are formed by Australia’s universities and research institutes, with many others established by private companies and inventors.
Western Australian institutions are relatively small contributors to these totals, but they do illustrate the diverse and surprising paths to commercial success.
Perhaps the most unusual ‘product’ to be commercialised is a bullying intervention program developed by Edith Cowan University’s child health promotion unit.
Nearly 300 schools have implemented the ‘friendly schools and families’ program this year and predicted income for 2005 is $1.1 million. The university is already looking beyond Australia to the UK and US markets.
A very different product Edith Cowan is planning to commercialise is a ballistic recognition system, developed in conjunction with the national institute of forensic scientists.
An intellectual property agreement has already been reached between the university and the institute and the next step is to finalise a licensing agreement with an international security products company, which would market the product and return a percentage of sales to the university.
The new technologies being commercialised by UWA include its iLecture system, which uses the Internet to deliver lecture recordings.
First developed in 1998 and used at UWA since 1999, the automated system ensures that audio and video is captured, processed and delivered via a standard Internet connection ‘on demand’.
UWA currently records 340 lectures each week and delivers over 10,000 lectures per week on-campus and in regional areas.
It has negotiated licence deals with nine universities, which pay a licence fee and annual software maintenance fees direct to UWA.
It has also adopted a modified ‘service provider’ model for the TAFE sector.
Start-up company Media Farm has been established to introduce the iLecture technology to the TAFE and corporate sectors.
Most start-up companies come to public attention when they launch a public capital raising and seek a listing on the Australian Stock Exchange.
In reality, an ASX listing usually follows many years of hard work, and is usually seen as just one more milestone on the commercialisation path rather than an end in itself.
Advanced Nanotechnology, for instance, listed on the ASX early this year, eight years after it was established by UWA.
During that time it completed multiple capital raisings from private investors and its industry partner, South Korean company Samsung Corning, and launched its first products.
Advanced Nano, like many emerging companies, also benefited from a $2.8 million Federal Government research grant.
Another recent ASX listing, Phylogica, also has a long history.
It was formed in 2001 to commercialise drug discovery technologies, developed over six years at the Telethon Institute for Child Health Research and the Fox Chase Cancer Center in the US.
Venture capital funds are targeted by many start-up companies but most don’t make the grade.
A recent exception was UWA start-up Caldeon, which has secured $3 million of venture capital funding (see next page).
Researchers working inside universities have the advantage of ready access to commercialisation experts, who can help them deal with issues like protecting intellectual property, evaluating market potential, developing a business plan, identifying strategic partners and potential investors, and negotiating contracts.
Universities also usually provide very early stage ‘proof-of-concept’ funding.
Curtin University went a step further with one its start-up companies, Neuromonics, by providing more than $300,000 of funding alongside venture capital investors.
“It was a first for Curtin to back its own technology to that extent,” says Curtin’s director of IP commercialisation Conrad Crisafulli.”
Martin Cebis, chief executive of software company Embedded Technologies, looks with envy at start-ups formed by universities.
He said they immediately had some market credibility, in contrast to privately backed start-ups such as Embedded. Mr Cebis said Embedded’s current premises, in a government-owned incubator at Technology Park, helped the company build credibility.
Winning government grants has also helped Embedded, which has achieved its first sales after developing its automation software over the past three years (see below).
Dr Sierakowski is looking for more government support for organisations involved in commercialising university research.
“Clearly effective technology transfer from our universities to the private sector is a critical aspect for the economic development of the nation and the state,” he said.
Speaking as chairman of the sector’s peak body, Knowledge Commercialisation Australia, Dr Sierakowski said there was a “significant market failure” and has called for government support.
KCA says funding equal to between 3 per cent and 5 per cent of university research spending should be provided for commercialisation activities.
Options include rebating up to 50 per cent of the cost of gaining patents.
KCA also proposes dollar-for-dollar government funding for IP commercialisation training (e.g. teaching researchers about IP processes) and proof-of-concept funding.
PATHWAY TO COMMERCIALISATION
- 570 new inventions disclosed annually after research in universities and public institutions.
- Australia’s universities negotiate about 400 licensing deals each year, generating gross income of about $64 million.
- About 50 start-up companies are formed each year by Australia’s universities and research institutes.
- 600 patent applications filed annually by Australians here and in the US.