Australian Financial Review
By Thomas Barlow and Bruce McKern
Shanghai Jiao Tong University has just published its well-known Ranking of World Universities for 2010 and there is good news for Australia. The ANU is at 59th place, the University of Melbourne moved up to 62nd and the University of Sydney to 92nd. However, while the news is cause to celebrate, it should not justify complacency. There is emerging evidence that both the scale and the form of government policy support for research in our universities is restricting Australia’s capacity to innovate. Despite the growing investment in our research base (led by Melbourne, which spends well over $1 billion per annum on university R&D), no Australian city matches the success of leading innovation centres globally. Sydney, Melbourne and Brisbane all spend significantly less per capita on university R&D than leading US cities. Furthermore, in our area of greatest scale, the biomedical sciences, we have some disturbing failings - not least of which has been our lack of success in transforming research into commercial reward. Despite the absolute volume of biomedical research in Australian cities, the impact on innovation in the broader economy remains modest. The United States Studies Centre at the University of Sydney has examined this issue in depth. In a research program funded by the Merck Foundation, we compared the biotechnology industry and its supporting ecosystems in Melbourne, Sydney and Brisbane with that of San Diego, California. San Diego’s metropolitan population is smaller than that of Melbourne or Sydney, but its biotechnology sector has grown rapidly and has higher revenues than the whole Australian biotechnology sector. Furthermore, the R&D spending of San Diego’s biotechnology companies is around three times that of equivalent companies based in Melbourne – or six times if one excludes CSL from the analysis. The view that predominates in Australia (as confirmed by participants we surveyed in Australia’s biotechnology sector) is that we have failed to leverage our outstanding research base in biotechnology because of several problems in the industrial system. These include the lack of a ‘flagship’ company that can act as a repository of talent when start-ups fail, a lack of access to patient venture capital funding, and a lack of a sustained government policy focus on biotechnology industry development at both the state and federal levels. There is some substance to these concerns. Our analysis, however, suggests a more worrying problem: that our research base in this field is not as outstanding as is popularly imagined. Despite its smaller population base, San Diego spends 30% more on R&D in higher education than Melbourne does. Its top university, the University of California San Diego, is ranked 14th in the SJT rankings. Its universities and research institutes are also more focused, investing more on research in fundamental biological sciences than Melbourne, Sydney and Brisbane universities combined. These investments have had important consequences. Researchers in San Diego’s institutions publish over 1000 more articles every year in fundamental molecular biology journals than researchers based in any of the Australian cities. And although Victorian and NSW researchers publish more scientific articles in clinical medicine journals than San Diego researchers, they also tend to publish lower-impact papers. One way of assessing the impact of research is by studying the journals in which researchers are able to get their work published. This analysis shows that researchers in San Diego generate roughly eight times the number of publications in the influential journal Cell and more than four times the number of publications in Nature Biotechnology, as researchers in any Australian city. More broadly, the top 25 life science journals in terms of volume of output for San Diego’s researchers include highly influential journals such as Science, Nature, Cell, and the Journal of Molecular Biology. By comparison, the matching list for Melbourne’s institutions is dominated by Australasian journals such as the Medical Journal of Australia and the Australian Family Physician. A journal’s impact is significant for commercialisation. We have found that researchers in San Diego generate more than six times the number of international organic chemistry patents and more than four times as many international medical patents as researchers in Melbourne. These figures imply a much greater scale of biotech business opportunity in San Diego, which is clearly reflected in commercial outcomes: revenue from biotech companies in San Diego was $US 3.97 billion in 2008 versus $430 million for all of Australia’s biotech firms, excluding CSL. All this is not to discount profound progress in the public research base over the past 15 years, nor the scientific ability of Australian researchers. There are individual researchers and organisations in all Australian cities doing research of global standing. The Walter and Eliza Hall Institute in Melbourne, for example, performs research at a standard that is easily comparable to the very best institutions in San Diego. But we urge caution about judging Australia’s research base only on the basis of its most successful elements. Our capacity for generating commercially relevant intellectual property in biotechnology remains very limited in scale compared with other leading centres. Ultimately, Australia’s success as a knowledge-intensive society will depend not just upon the achievements of our leading researchers, but also upon raising average performance across our innovation system. Dedicated research institutions often perform better in research than universities both in San Diego and in Australia, and we believe this may be attributable to differences in the policies and internal processes that motivate and support researchers in the two countries. This is an issue that we plan to study further at the United States Studies Centre. Our immediate conclusions, however, are clear. As we celebrate the ongoing success of our universities in the global league tables, we should recognise that there is still a great deal to be done if our overall research impact is to lead to a sustained flow of Australian discoveries in biotechnology with global commercial value. Addressing this task should be a high priority for Australia’s new government.