Australia needs to stop selling its innovation sector short

If Australia is going to compete in innovation, we need to stop fooling ourselves into thinking we are an over-performing small economy in research terms, and realise we really are an under-performing mid-sized economy.

But the federal government’s research commercialisation plan released this week does not provide much hope. It is yet another example of Australia setting its targets too low when it comes to our place in global research

The document, released by Christopher Pyne and Ian MacFarlane, boasts that that Australia accounted for 3.9 percent of the world’s published research in 2013, punching well above its 0.3 percent portion of the global population.

I hope that selective equation made the ministers feel better, but when you consider we also hold a 2 percent slice of the world’s economy, the comparison is much less impressive.

The paper, and the Government’s vision of the future of our innovation sector, is blinkered by finding domestic buyers for domestic inventions, and is failing to seize the more ambitious opportunity to cement our wares in global markets.

This end requires a bigger set of changes than encompassed in the paper.

Standards are the secret

A fly through history of changing telecommunications technologies shows that global standards hold the key to cementing an invention into global markets for years.

Lawmakers would do well to heed the lesson that commercial success will come from undertaking a lot of research in areas of potential and then securing the use of the outcomes in global standards.

The mobile phone industry is instructive because some of the leading players came from similar sized economies to us (i.e. Nokia in Finland, Ericsson in Sweden).

Meanwhile, although Australia is one of the world’s leading adopters of technology, we have played only tangential roles in its development.

First some history: When cellular mobile firms first came on the market, the United States mandated a standard - AMPS - while Europe did not. Mobile take-up was higher in the US.

When mobiles went digital (at the start of the 90s) the Europeans decided to agree on a standard - GSM - while the Americans did not. They deployed some GSM, some CDMA and some TDMA.

In Australia GSM was mandated for the initial digital technology (in the 900 MHz band), but when Telstra was required to shut down the AMPS network in 2000 no technology was specified for the 850 MHz band and Telstra and Hutchison used it to deploy CDMA.

Both the CDMA and GSM camps were then developing standards for 3G, which was the first mobile standard to incorporate data. A standards war waged for a while between a European camp (GSM), the US (CDMA) and a China grouping that proposed a variety of alternatives.

In the end the global 3G standard was a compromise between the two. It is called wideband CDMA and fundamentally uses the air interface of the CDMA standards married with the evolution of the GSM core standards.

4G went through a similar battle (4G being initially specified as a service capable of 100 Mbps). The WiMax standards developed an air interface (OFDMA) but had no core. The air interface grafted on to the 3G core standards provided Long Term Evolution. It only becomes true 4G as LTE-Advanced with the addition of antenna techniques and carrier aggregation.

The lesson from the evolution is the role that global standards bodies - especially the International Telecommunication Union (ITU) and the 3rd Generation Partnership Project (3GPP) had on this history, plus the role they played in the designation of parts of the radio frequency for mobiles.

The lesson is timely as the world continues to unravel what 5G will look like.

Thoughts range from continued efforts involving multiple antennas, smaller cells, and smarter coordination between devices, to new antenna technologies to enable far higher frequency bands.

There are extensive research projects underway. Will Australia capitalise on this opportunity? Probably not.

Thinking outside the Australia-shaped box

Innovation in mobile technology did not occur because researchers developed a product with a particular industry demand in mind.

It occurred when researchers - both in academic and industry circles - developed new techniques, obtained a patent and then managed to have that technology incorporated into a standard.

The CSIRO had some experience of this - though largely by accident.

The technology for wi-fi was developed as a ‘problem solving’ task - but the problem was how to link devices being used for research, not how to create a common user wireless network in class licenced spectrum.

But when the technology was adopted as the standard globally, this established an ongoing and very helpful revenue stream for the CSIRO.

More recently the CSIRO has developed a set of wireless technologies it calls Ngara. It claims great things for these technologies. But its website says it is “ready to partner with industry leaders.”

This is the wrong approach - not least because there are no industry leaders in Australia.

Years of determining that research in both universities and industries need to be focussed on “commercial opportunities” means Australia has disconnected our research communities from global markets.

Telstra has closed its research facility, and many of the equipment vendors have closed or reduced their research presence. Few Australians are working with the standards bodies - including those that determine spectrum allocation.

Australia has developed a modern day colonial attitude that it is a taker only - but it needn’t be.

"This is so simple it sounds stupid, but it is amazing how few oil people really understand that you only find oil if you drill wells. You may think you’re finding it when you’re drawing maps and studying logs, but you have to drill."

- A quote from an oil explorer retold by Tom Peters (co-author of the 1980s management classic In Search of Excellence.)

Policy makers should spend less time focussing on local outcomes to promote commercialisation and simply stop cutting research budgets.

While they are at it, recognise the activity of researchers attending any international forum or conference - whether they are presenting a paper or not - as an opportunity for our research community.

Success in commercialisation of research comes securing international markets, not short term domestic gains.

Global ‘commercialisation’ is not about finding a single user for an idea. It requires lots of (sometimes expensive) research to develop patentable innovations and then getting the patented technology included in the standard.

Those in Australia’s ICT community who are already concerned that the Industry Innovation and Competitiveness Agenda ignored the ICT industry have the opportunity to redress that by making submissions on this latest discussion paper.