The Australian Government's Innovation Report

2006 07
The Australian Government’s Innovation Report
REAL RESULTS | REAL JOBS

Chapter Number - Chapter title 1

ISBN: 0 642 77 675x
ISBN: 0 642 77 6741 (electronic version)
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2 Backing Australia’s Ability

CONTENTS
PRIME MINISTER’S FOREWORD 1
CONTENTS 3
TABLES AND FIGURES 7
LIST OF ABBREVIATIONS 9
GLOSSARY 11
EXECUTIVE SUMMARY 13
CHAPTER ONE: SCIENCE AND INNOVATION – ADVANCING OUR ABILITIES 17
The Australian Government’s investment in science and innovation: an overview 17
Support for major government research agencies 19
Support for business R&D and innovation 19
Support for university research and research training 19
Support for major science and technology programmes 19
The Australian Government’s investment in science and innovation: Backing Australia’s Ability 20
Science and innovation serving national priority goals: the National Research Priorities 20
CHAPTER TWO: INITIATIVES FOR A DYNAMIC NATIONAL INNOVATION SYSTEM 21
PART ONE – STRENGTHENING OUR ABILITY TO GENERATE IDEAS AND UNDERTAKE RESEARCH 21
Performance highlights 21
Sustaining funding for government research agencies 22
Australian Government Antarctic Division 22
Australian Biological Resources Study 23
Australian Institute of Aboriginal and Torres Strait Islander Studies 25
Australian Institute of Criminology 25
Australian Institute of Marine Science 26
Australian Nuclear Science and Technology Organisation 28
Bureau of Meteorology Research Centre 30
Commonwealth Scientific and Industrial Research Organisation 31
Defence Science and Technology Organisation 34
Geoscience Australia 35
Great Barrier Reef Marine Park Authority 37
National Measurement Institute 38
Strengthening university and independent research sector R&D 39
National Competitive Grants Programme 39
Institutional Grants Scheme 41
Research Infrastructure Block Grants Scheme 41
Health and Medical Research – Research Grants 41
Independent Research Institute Infrastructure Support Scheme 43
Contents 3

Enhancing industrial R&D 44
R&D Tax Concession 44
Rural R&D Corporations and Companies 45
Food Centres of Excellence 46
Food Innovation Grants Programme 48
Upgrading research infrastructure 48
National Collaborative Research Infrastructure Strategy 48
Major National Research Facilities Programme 49
Systemic Infrastructure Initiative 50
Promoting the internationalisation of R&D 51
International Science Linkages 51
Australia-India Strategic Research Fund 52
Australian Centre for International Agricultural Research 52
Improving research quality and accessibility 54
Research Quality Framework 54
Research Accessibility Framework 55
PART TWO – ACCELERATING THE COMMERCIAL APPLICATION OF IDEAS 56
Performance highlights 56
Providing capital for commercialisation 57
Venture Capital Review 57
Venture Capital Regime 57
Pooled Development Funds 58
Innovation Investment Fund 58
Renewable Energy Equity Fund 59
Pre-Seed Fund 59
Assisting research to investment ready stage 61
Commercial Ready 61
Commercialising Emerging Technologies Programme 62
Building on ICT strengths 64
Advanced Networks Programme 64
Intelligent Island Programme 65
ICT Incubators Programme 65
Encouraging companies to innovate 66
Renewable Energy Development Initiative 66
Innovation Access Programme – Industry 67
Industry Cooperative Innovation Programme 68
Information Technology Online Programme 69
Pharmaceuticals Partnerships Programme 70
New Industries Development Programme 71
Textile, Clothing and Footwear Post-2005 Strategic Investment Programme 72
Automotive Competitiveness and Investment Scheme Motor Vehicle Producer Research
and Development Scheme 72
Renewable Energy Commercialisation Programme 73
Greenhouse Gas Abatement Programme 73
4 Backing Australia’s Ability

Building links to facilitate commercialisation and innovation 74
Cooperative Research Centres Programme 74
World Class Centres of Excellence – Biotechnology: Australian Stem Cell Centre 75
World Class Centres of Excellence – ICT: National ICT Australia 76
National Biotechnology Strategy 77
Biotechnology Australia Public Awareness Programme 78
Protecting intellectual property 79
Intellectual Property 79
Intellectual Property Research Institute of Australia 80
Review of Design Spare Parts Exclusions 80
Review of Innovation Patent 80
Review of Grace Period 80
PART THREE – DEVELOPING AND RETAINING AUSTRALIAN SKILLS 81
Performance highlights 81
Advancing SET skills 82
Audit of Science, Engineering and Technology Skills 82
Fostering Scientific, Mathematical and Technological Skills in Government Schools 83
The Le@rning Federation: Schools Online Curriculum Content Initiative 83
National Youth Science Forum 84
The Smart Olympiads 84
2000 Additional Targeted University Places 86
Investing in research training 87
Research Training Scheme 87
Higher Education Loan Programme 88
Australian Postgraduate Awards 88
Endeavour International Postgraduate Research Scholarships 88
Commercialisation Training Scheme 89
Fostering entrepreneurship and awareness of science and innovation 90
National Innovation Awareness Strategy – Science Connections Programme 90
Questacon – The National Science and Technology Centre: Questacon Smart Moves 91
Gaining and retaining highly-skilled and qualified workers 91
Federation Fellowships 91
Skilled Immigration 92
CHAPTER THREE: NATIONAL RESEARCH PRIORITIES 93
PRIORITY 1 – AN ENVIRONMENTALLY SUSTAINABLE AUSTRALIA 93
Water – a critical resource 93
Transforming existing industries 95
Overcoming soil loss, salinity and acidity 97
Reducing and capturing emissions in transport and energy generation 97
Sustainable use of Australia’s biodiversity 98
Developing deep earth resources 99
Responding to climate change and variability 100
PRIORITY 2 – PROMOTING AND MAINTAINING GOOD HEALTH 102
A healthy start to life 102
Ageing well, ageing productively 103
Preventive health care 104
Strengthening Australia’s social and economic fabric 105
Contents 5

PRIORITY 3 – FRONTIER TECHNOLOGIES FOR BUILDING AND TRANSFORMING AUSTRALIAN INDUSTRIES 105
Breakthrough science 105
Frontier technologies 106
Advanced materials 108
Smart information use 109
Promoting an innovation culture and economy 110
PRIORITY 4 – SAFEGUARDING AUSTRALIA 113
Critical infrastructure 113
Understanding our region and the world 114
Protecting Australia from invasive diseases and pests 115
Protecting Australia from terrorism and crime 116
Transformational defence technologies 118
CHAPTER FOUR: AUSTRALIAN INNOVATION SCORECARD 121
The indicators 121
Main points of the 2006 Innovation Scorecard 122
Australia’s innovation performance relative to the 2004 and 2002 Scorecards 125
Summary of Australia’s innovation performance relative to OECD countries 127
Summary of Australia’s innovation performance against each category 131
Knowledge Creation 131
Human Resources 133
Finance 135
Knowledge Diffusion 136
Collaboration 138
Market Outcomes 139
Conclusions 142
CHAPTER FIVE: MOVING FORWARD WITH CONFIDENCE 143
Key institutions 143
Prime Minister’s Science, Engineering and Innovation Council 143
Commonwealth State and Territory Advisory Council on Innovation 144
Chief Scientist 144
Australian Research Council 145
National Health and Medical Research Council 145
The Industry Research and Development Board 145
Australian Biotechnology Advisory Council 146
Business/Industry/Higher Education Collaboration Council 147
Australian Bureau of Statistics 148
Informing the future 150
House of Representatives Standing Committee Inquiry into Pathways to Technological Innovation 150
Productivity Commission’s Review of Public Support for Science and Innovation 150
Backing Australia’s Ability Evaluation Plan 151
APPENDICES 153
6 Backing Australia’s Ability

Tables
Table 1: Australian Government support for science and innovation – in nominal terms, 1996-97 to 2006-07 18
Table 2: Number of publications produced by CSIRO – by type of publication, 2002 to 2005 32
Table 3: Intellectual property generated by CSIRO – by type of intellectual property, 2002 to 2006 32
Table 4: Numbers of staff and post doctorates in CSIRO, 2003 to 2006 33
Table 5: Research training in CSIRO, 2003 to 2006 33
Table 6: Number of firms using the R&D Tax Offset and 175% Premium Concession, 2001-02 to 2004-05 44
Table 7: Size distribution of Commercial Ready grants, 2005-06 61
Table 8: Commercial Ready grants awarded, 2005-06 61
Table 9: Sectoral distribution of Commercial Ready grants, 2005-06 62
Table 10: Backing Australia’s Ability 2000 additional targeted university places, 2002 to 2005 86
Table 11: Regional point of origin of Endeavour IPRS recipients, 2004 89
Table 12: Endeavour IPRS higher degree by research fields of study, 2004 89
Table 13: Australian Innovation Scorecard 2006 123
Table 14: Comparison of Australia’s performance in the 2006, 2004 and 2002 Scorecards 125
Figures
Figure 1: Percentage change in the Australian 2004 and 2006 scorecard values compared
to the percentage change between the 2002 and 2004 scorecard values 126
Figure 2: Australia’s innovation performance in the 2006 scorecard compared to the OECD average 128
Figure 3: Australian innovation performance compared to OECD average 2002, 2004 & 2006 scorecards 129
Figure 4: Australia’s innovation performance compared to the OECD leader, 2006 scorecard 130
Figure 5: Public expenditure on R&D as a percentage of GDP compared to the OECD average 131
Figure 6: Number of scientific and technical articles per million population compared to the OECD average 132
Figure 7: Number of US patents per million population compared to the OECD average 132
Figure 8: Business expenditure on R&D as a percentage of GDP compared to the OECD average 133
Figure 9: Percentage of the workforce with a tertiary education compared to the OECD average 134
Figure 10: Number of researchers per 10 000 labour force compared to the OECD average 134
Figure 11: Number of science graduates in employment per 100 000 employed 25-34 year olds
compared to the OECD average 135
Figure 12: Investment in venture capital as a percentage of GDP compared to the OECD average 135
Figure 13: Investment in ICT as a percentage of business sector gross fixed capital formation
compared to the OECD average 136
Figure 14: Internet users per 1000 people compared to the OECD average 136
Figure 15: Broadband subscribers per 1000 population compared to the OECD average 137
Figure 16: Investment in new equipment as a percentage of GDP compared to the OECD average 138
Figure 17: Percentage of innovating business with collaboration activity compared to the EU average 138
Figure 18: Breadth of international science and engineering collaboration compared to the OECD average 139
Figure 19: Average annual growth in multi-factor productivity 1999-2003 compared to the OECD average 139
Figure 20: Percentage turnover from new goods and services for product innovators compared to
the EU average 140
Figure 21: Percentage of innovating businesses in the economy compared to the EU average 141
Figure 22: Percentage of businesses using the internet to sell goods and services compared to the
OECD average 141
Contents 7

8 Backing Australia’s Ability

LIST OF ABBREVIATIONS
ABARE Australian Bureau of Agricultural and Resource Economics
ABC Australian Broadcasting Corporation
ABRS Australian Biological Resources Study
ABS Australian Bureau of Statistics
ACIAR Australian Centre for International Agricultural Research
ACIS Automotive Competitiveness and Investment Scheme
AGAD Australian Government Antarctic Division
AIATSIS Australian Institute of Aboriginal and Torres Strait Islander Studies
AIC
Australian Institute of Criminology
AIMS Australian Institute of Marine Science
ANP Advanced Networks Programme
ANSTO Australian Nuclear Science and Technology Organisation
APA
Australian Postgraduate Awards
ARC
Australian Research Council
ASCC Australian Stem Cell Centre
ASO Australian Science Olympiads
BERD Business expenditure on research and development
BIF
Biotechnology Innovation Fund
BITS Building on IT Strengths
BMP Best management practices
BMRC Bureau of Meteorology Research Centre
BRS
Bureau of Rural Sciences
BTRE Bureau of Transport and Regional Economics
COMET Commercialising Emerging Technologies
CRC
Cooperative Research Centre
CRDC Cotton R&D Corporation
CSIRO Commonwealth Scientific and Industrial Research Organisation
CSTACI Commonwealth State and Territory Advisory Council on Innovation
CTS
Commercialisation Training Scheme
DEST Department of Education, Science and Training
DEWR Department of Employment and Workplace Relations
DIMIA Department of Immigration and Multicultural and Indigenous Affairs
DITR Department of Industry, Tourism and Resources
DSTO Defence Science and Technology Organisation
EBA
Enrolment benchmark adjustment
Endeavour IPRS Endeavour International Postgraduate Research Scheme
EU
European Union
FIG
Food Innovation Grants
Abbreviations 9

FRDC
GDP
GERD
GGAP
GOVERD
GRDC
HECS
HELP
HERD
IAccP
ICT
ICIP
IGS
IIF
IP
IPRIA
IR&D Board
ISL
IT
ITOL
MODL
MNRF
NBS
NCGP
NCRIS
NFIS
NHMRC
NIAS
NICTA
NIDP
NMI
NRP
NYSF
OECD
OPAL
P3
PDF
PELS
PSF
PMSEIC
PUBLERD
R&D
RDC’s
REDI
REEF
Fisheries Research and Development Corporation
Gross domestic product
Gross expenditure on research and development
Greenhouse Gas Abatement Programme
Government expenditure on R&D
Grains Research and Development Corporation
Higher Education Contribution Scheme
Higher Education Loan Programme
Higher education expenditure on R&D
Innovation Access Programme
Information and communications technology
Industry Cooperative Innovation Programme
Institutional Grants Scheme
Innovation Investment Fund
Intellectual property
Intellectual Property Research Institute of Australia
Industry Research and Development Board
International Science Linkages
Information technology
Information Technology Online Programme
Migration Occupations in Demand List
Major National Research Facilities
National Biotechnology Strategy
National Competitive Grants Programme
National Collaborative Research Infrastructure Strategy
National Food Industry Strategy
National Health and Medical Research Council
National Innovation Awareness Strategy
National Information and Communications Technology Australia
New Industries Development Programme
National Measurement Institute
National Research Priorities
National Youth Science Forum
Organisation for Economic Cooperation and Development
Open Pool Australian Light-Water reactor
Pharmaceuticals Partnerships Programme
Pooled Development Funds
Postgraduate Education Loans Scheme
Pre-Seed Fund
Prime Minister’s Science, Engineering and Innovation Council
Public expenditure on research and development
Research and development
Rural R&D Corporations
Renewable Energy Development Initiative
Renewable Energy Equity Fund
10 Backing Australia’s Ability

RIBG
RPS
RQF
RTS
S&T
SCOPE
SET
SII
SMEs
TCF (SIP)
UK
US
VC
VCLP
Research Infrastructure Block Grants
Regional Protection Scheme
Research Quality Framework
Research Training Scheme
Science and technology
Science Connections Programme
Science, engineering and technology
Systemic Infrastructure Initiative
Small to medium enterprises
Textile, Clothing and Footwear Strategic Investment Programme
United Kingdom
United States
Venture Capital
Venture Capital Limited Partnerships
Glossary of financial terms used in the report
Current prices: estimates are valued at the prices of the period to which the observation relates. For example,
estimates for 2004-05 are valued using 2004-05 prices. This contrasts to chain volume measures where the
prices used in valuation refer to the prices of a previous period.
Chain volume measure: is used to revalue expenditures on R&D in such a way as to remove the direct effects
of changes in their prices over the period under review. It is calculated based on the implicit price deflators
on R&D at a reference year of 2004-05 provided by the ABS.
Country average: The average value for the selected group of countries under analysis.
Nominal terms: This is a value that is unadjusted for the effects of inflation and shows the dollar amount
of expenditure recorded in each year, as opposed to real terms which adjusts this nominal value to compensate
for inflationary effects.
Abbreviations 11

12 Backing Australia’s Ability

EXECUTIVE SUMMARY
With total funding of $8.3 billion over the 10 year period from 2001-02 to 2010-11, the Backing Australia’s
Ability initiative is the largest and most comprehensive single set of programmes and measures put in place
by an Australian Government in support of science and innovation. It targets three key elements of the
innovation system: strengthening our ability to generate ideas and undertake research, accelerating the
commercial application of ideas, and developing and retaining Australian skills.
The 2006-07 Innovation Report is the sixth Innovation Report since the announcement of Backing Australia’s
Ability. It follows the final year of funding under the initial Backing Australia’s Ability – An Innovation Action Plan
for the Future (2001) package. Support for new measures, as well as a wide range of existing programmes, is
now being delivered under Backing Australia’s Ability – Building our Future through Science and Innovation (2004).
The Backing Australia’s Ability themes continue to remain a relevant and unifying feature of the Australian
Government’s investment in science and innovation. This report provides an opportunity to reflect on the
considerable achievements of Australian Government departments and agencies against these themes over
2005-06, along with their progress in addressing broader national goals through their implementation of the
National Research Priorities.
The report additionally presents the findings of the third Australian Innovation Scorecard, comparing
Australia’s innovation performance to that of other countries in the OECD. It thus provides a broader global
context for Australia’s innovation activities and a means of tracking our progress in an increasingly competitive
global economy.
Finally, the report outlines the important role that key institutions and strategic planning processes are playing
in informing the future of Australian science and innovation and ensuring that Australia remains well-placed
to reap the rewards of its investments in years to come.
Initiatives for a dynamic national innovation system
Strengthening our ability to generate ideas and undertake research
Australian Government agencies reported considerable progress in 2005-06 in achieving research and
development (R&D) outcomes consistent with their missions. Highlights included:
• The Commonwealth Scientific and Industrial Research Organisation (CSIRO) reported five new spinoff
companies formed during the year, taking the market value of its spin-off portfolio to record levels,
and generated record revenues ($37.1 million) from its intellectual property assets. CSIRO also reported
an ongoing focus on building long-term collaborative partnerships with industry, government agencies
and universities and developing critical mass in key areas through its National Research Flagships.
• The Defence Science and Technology Organisation marketed over 40 technologies during 2005-06. It
additionally entered into two new alliance agreements with industry, placed 78 research agreements and
entered into 12 collaborative arrangements across a wide range of disciplines.
• The Australian Nuclear Science and Technology Organisation completed construction and operation
approval of the new OPAL reactor. The facility will commence routine operation in early 2007 and,
with world-class instrumentation, will be a leading regional centre for researchers in Australia and
internationally to work and collaborate in fields such as biology, materials science and food science.
Executive Summary 13

The year also saw significant outcomes under several major programmes administered by Australian
Government departments and agencies in support of R&D activities. Highlights included:
• At 30 June 2006, a total of 5830 companies were registered with the R&D Tax Concession for the
2004-05 income year, with reported R&D expenditure totalling $7.79 billion, an increase in expenditure
of 12.5% over the previous year.
• The International Science Linkages Programme supported 18 projects to a value of around $5.2 million
under its Competitive Grants in 2005-06, including 13 collaborative research projects, two conferences,
one showcase and two strategic planning activities. Further funding support for international activities
was also reported under the China and France cooperation funds and the Strategic Policy and
International Science and Technology Networks elements of the programme.
• Under the Australian Research Council’s (ARC) National Competitive Grants Programme Discovery
Projects scheme 917 proposals for funding commencing in 2006 were successful, representing a
funding commitment of $95.2 million in 2006 and $273.6 million over the five years to 2010. Across
two selection rounds for funding commencing in 2006 the Linkage Projects scheme supported 400 new
collaborative research projects and awards, worth $114.2 million over the five year period to 2010. This
funding commitment will attract $175.2 million in cash and in-kind contributions from partner
organisations.
• The Australian Government allocated $437 million to the National Health and Medical Research
Council (NHMRC) for health and medical research in 2005-06, with major commitments through
Project Grants ($185 million) and Programme Grants ($91 million). New funding activities of the
NHMRC included a commitment of $10 million, matched by the ARC, to jointly fund research that
will further the National Research Priorities.
Finally, the year saw developments in two major Australian Government initiatives that will significantly
strengthen the quality and impact of Australian research and enhance its international competitiveness:
• In February 2006 the National Collaborative Research Infrastructure Strategy (NCRIS) Roadmap was
released by the Minister for Education, Science and Training, the Hon Julie Bishop MP. The Roadmap
identifies 16 capability areas in which Australia should aim to develop, or further develop, research
capability through major infrastructure investment. $500 million will be provided through NCRIS to
implement Roadmap priorities. This investment will enable Australian researchers to tackle issues of
national importance and will contribute to keeping them at the forefront of their fields.
• The Australian Government announced in 2006 that it would implement a Research Quality Framework
(RQF) which will strengthen the assessment of research carried out in Australia. The RQF, an Australian
Government initiative to formulate a world’s best practice framework for evaluating the quality and the
impact of research, will ensure that public funding is being invested in research that is of the highest
quality and which delivers real benefits to the wider community. Preparatory work and trialling will
continue in 2007, with data collection in 2008 and funding implementation in 2009.
Accelerating the commercial application of ideas
In 2005-06 Australian Government departments and agencies reported strong progress through existing
programmes and initiatives in facilitating the translation of research outcomes and technologies into the
market place. Highlights included:
• The Commercialising Emerging Technologies Programme reported approval of 172 new applications
in 2005-06, along with assistance to 53 enterprises with 80 capital raising outcomes worth $56 million,
and the launch of 20 manufacturing or new products and services.
• The Pre-Seed Fund reported investment of $12.8 million in 36 companies and projects in 2005-06. Of
these ventures, 22 were new investments.
• Under the ICT Incubators Programme in 2004-05 (most recent data available) incubators reported
raising over $42 million in private co-investment for their incubatee companies and assisting incubatees
to win more than $14 million in government grants. Incubators additionally reported that their
incubatees recorded a significant increase in annual revenue.
14 Backing Australia’s Ability

• The Cooperative Research Centres (CRC) Programme reported continuing strong performance in
building long-term strategic linkages and collaborations between industry, universities and government.
In 2004-05 (most recent data available) there were 1177 companies involved in the programme,
including 679 small to medium-sized enterprises and 498 large businesses. During the year CRCs
undertook over 600 research contracts and consultancies from industry and other end-users, earning
almost $53 million, and reported over 4000 license agreements and creation of 12 spin-off
companies.
The year also saw some significant new developments focused on the venture capital industry:
• Following a review of the Australian venture capital industry in 2005, the Australian Government
announced measures to improve access to capital as part of the 2006-07 Budget. Measures include: the
establishment of a new investment vehicle, the Early Stage Venture Capital Limited Partnership that
will progressively replace the Pooled Development Funds Programme; enhancements to the existing
Venture Capital Limited Partnership regime; and additional funding for a third round of the successful
Innovation Investment Fund Programme.
Developing and retaining Australian skills
In 2005-06 Australian Government departments and agencies reported a number of activities supporting
Australia’s capacity to develop and retain skills. A continuing focus has been on engaging young people in
science and innovation and attracting, nurturing and retaining talent. Highlights included:
• Students performed strongly in the International Science Olympiads with Australia maintaining its
ranking amongst the best competing countries. Australia was placed 6th out of 48 in biology, 20th out
of 66 in chemistry and 14th out of 77 in physics.
• The Questacon Smart Moves Programme travelled extensively during 2005-06 through regional and
rural secondary schools in Queensland, Northern Territory, South Australia, Tasmania and New South
Wales. A total of 371 schools were visited and 82 400 secondary students participated in the
programme.
• 25 new Federation Fellowships were announced in May 2006. Of the fellowships awarded, five were
awarded to expatriate Australians who will leave international organisations to return home, and two
were awarded to foreign nationals who will bring their expertise and talent to Australia.
The year also saw significant progress on work that will inform future skills strategies:
• The Australian Government commissioned an audit of science, engineering and technology (SET)
skills to examine trends in their supply and demand. A summary report was provided in June 2006,
which raised a number of issues including, among others: recruitment difficulties in many engineering
and some science disciplines; static or declining participation in the enabling sciences in school and in
post-school settings; and concerns regarding the quality of SET career advice. Further work has been
commissioned by the Minister for Education, Science and Training to investigate key areas, including
the engagement of pre-school and primary school children with SET, the factors that influence people
to seek out and stay in SET careers, and career opportunities for early to mid-career researchers
in Australia.
National Research Priorities
Australia has four National Research Priorities that are designed to focus research effort and investment in
areas that will deliver significant economic, social and environmental benefits to the Australian community.
Australian Government research and research funding organisations are required to maintain plans which
show their progress in implementing the priorities in their activities. This is the third year that departments
and agencies have reported their efforts and this report includes a series of examples which demonstrate
their progress.
Executive Summary 15

The Australian Innovation Scorecard
The report incorporates the Australian Innovation Scorecard 2006, which is the third in a biennial series designed
to provide a snapshot of Australia’s innovation performance relative to other OECD economies. It also
examines the national innovation performance over a period of time from 2002.
The Australian Innovation Scorecard 2006 demonstrates a steady improvement in Australia’s innovation
performance across a range of indicators where we compare very favourably with the OECD average. Australia
ranked in the top 10 OECD countries in 12 out of the 18 indicators, and performed well above the average
in the areas of knowledge creation (science and technical articles per million of the population), human
resources (science graduates in employment), finance (investment in venture capital as a percentage of GDP)
and market outcomes (businesses selling over the internet).
This bodes well for Australia’s ability to capitalise on innovative people, processes and technologies to compete
in global markets.
Moving forward with confidence
The Australian Government draws on a number of advisory bodies and data sources to both review the past
performance of Australian science and innovation and develop future strategies. The report includes a
summary of the roles and activities of some of the key organisational bodies and individuals that are
contributing to informing its forward planning, along with progress on major inquiries or reviews.
Particular highlights of the year included the appointment of a new Chief Scientist, Dr Jim Peacock AC, in
March 2006, and the commissioning of a major study of the economic, social and environmental returns
stemming from public support for science and innovation in Australia.
16 Backing Australia’s Ability

CHAPTER 1 – Science and innovation – advancing our abilities
Innovation, the exploitation of knowledge and ideas to produce new or improved products, processes, services
or organisational forms, is a major driver of the productivity gains that underpin sustained economic growth
and contribute to enhanced social well-being. It is a key source of competitiveness in global markets and
enhances preparedness for future challenges and opportunities.
Australia’s innovation system is comprised of the human capital, knowledge, networks, infrastructure and
institutions that act together to support the innovation process. The Australian Government plays an active
and important role in this system by supporting each of these elements, implementing measures and removing
barriers to enhance their interaction and effectiveness, and promoting the positive economic conditions in
which innovation can flourish.
The Australian Government’s significant investment in strengthening the national innovation system recognises
its capacity to contribute to an improved quality of life for all Australians. It backs the skills, knowledge and
ideas that are the foundation of innovative enterprise and strengthens the pathways through which their
potential economic, social and environmental benefits can be realised.
The Australian Government’s investment in science and innovation:
an overview
The Australian Government has invested at record levels in science and innovation, with expenditure in
2006-07 through the Budget and special appropriations estimated at $5.97 billion 1 . Over the past decade,
Australian Government support for science and innovation has grown at an average rate of 1.9% per year in
real terms.
Australian Government support for science and innovation can be grouped into four main categories: support
for major government research agencies, support for research and development (R&D) and innovation in the
business sector, support for research and research training in the higher education sector, and support for
major science and technology programmes involving more than one sector of the economy (multi-sector).
Table 1 identifies Australian Government support for science and innovation under these categories over the
period 1996-97 to 2006-07.
In 2006-07, nine government agencies delivered science and innovation programmes on behalf of the
Australian Government. The Department of Education, Science and Training is a lead agency, accounting for
around 55% of the government’s total expenditure on science and innovation. Other key players include the
Department of Industry, Tourism and Resources (21.9%), the Department of Health and Ageing (7.8%), the
Department of Defence (5.7%), the Department of the Environment and Heritage (4.5%), the Department
of Agriculture, Fisheries and Forestry (4.1%) and the Department of Communications, Information
Technology and the Arts (0.7%).
1
This is an estimate of Australian Government spending on its research agencies and programmes with an immediate and direct objective of
enhancing Australia’s science and innovation performance and capability.
Chapter 1 - Science and innovation – advancing our abilities 17

Table 1: Australian Government support for science and innovation – in nominal terms, 1996-97 to 2006-07
Cash Outlays Accrual Expenses
ACTUAL COST
INCURRED IN YEAR
($M) 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Support for Major Australian Government Research Agencies
estimated
actual
2005-06
budget
estimate
2006-07
· Defence Science
& Technology
Organisation
254.9 212.1 221.3 237.6 261.0 275.0 283.4 293.9 314.4 349.1 340.7
· CSIRO 444.5 466.8 475.4 500.0 496.7 509.6 532.1 568.6 577.1 593.9 607.2
· Other R&D Agencies 279.8 256.4 244.2 272.5 338.3 385.9 402.7 441.6 413.1 399.9 403.8
SUB-TOTAL 979.2 935.3 940.9 1010.1 1096.0 1170.5 1218.1 1304.1 1304.6 1343.0 1351.7
Support for Business R&D and Innovation
· Industry R&D
Tax Concession
525.0 420.0 370.0 460.0 536.0 461.0 566.0 552.0 587.0 622.0 657.0
· Other R&D Support 58.2 20.0 60.1 176.9 176.8 237.9 158.55 231.2 47.9 63.4 81.6
· Other Innovation
Support
69.6 120.4 166.6 112.0 124.6 284.3 244.4 216.1 356.6 427.3 513.9
SUB-TOTAL 652.8 560.4 596.7 748.9 837.4 983.2 969.0 999.3 991.5 1112.7 1252.5
Support for Higher Education Research and Research Training
· Australian
Research Council
· Performance Based
Block Funding
· R&D Support under
Former Funding
Framework
– – – – 247.8 265.8 298.3 399.6 480.9 546.2 570.3
– – – – 942.5 1012.5 1086.5 1172.2 1178.0 1234.7 1214.3
1610.5 1675.4 1737.2 1775.9 – – – – – – –
· Other R&D Support 2.7 2.5 2.5 15.7 614.0 598.9 588.0 594.8 589.2 449.7 449.7
SUB-TOTAL 1613.2 1677.9 1739.7 1791.6 1804.3 1877.2 1972.8 2166.6 2248.1 2230.6 2234.3
Support for Major Science and Technology Programmes
· NHMRC and
Other Health
· Cooperative
Research Centres
167.0 179.9 195.7 174.4 184.1 243.8 291.3 369.0 384.7 698.9 467.0
142.3 144.3 142.3 137.5 139.7 145.3 148.6 201.8 194.6 208.2 189.4
· Rural 126.0 140.5 150.2 138.2 141.3 197.5 204.3 210.7 213.6 220.7 221.4
· Energy and the
Environment
· Other Science
Support
11.4 25.2 8.9 11.8 20.9 33.6 29.1 35.8 43.7 64.1 140.6
24.7 28.7 12.1 7.0 6.7 13.3 39.2 50.3 57.6 73.1 117.2
SUB-TOTAL 471.4 518.6 509.2 468.9 492.7 633.6 712.6 867.6 894.2 1265.0 1135.5
TOTAL SUPPORT 3716.6 3692.2 3786.5 4019.5 4230.4 4664.5 4872.6 5337.6 5438.4 5951.2 5973.9
Source: DEST, Australian Government Science and Innovation Budget Tables 2006-07.
.
18 Backing Australia’s Ability

Support for major government research agencies
In 2006-07, the Australian Government will provide an estimated $1351.7 million in support for its major
research agencies, including the Commonwealth Scientific and Industrial Research Organisation (CSIRO)
($607.2 million), the Defence Science and Technology Organisation (DSTO) ($340.7 million), the Australian
Nuclear Science and Technology Organisation (ANSTO) ($129.7 million), Geoscience Australia ($113.0 million)
and the Australian Government Antarctic Division ($99.7 million). Other smaller agencies will receive a
combined total of approximately $61.3 million.
As well as support from the Australian Government, these agencies also attract external funds, as they
undertake strategic research and interact with other areas of the national innovation system. CSIRO, for
example, receives business funding, as well as funds from earned revenue (including licensing fees and disposal
of assets), and in 2006-07, its total income is expected to reach $970 million.
Support for business R&D and innovation
Australian Government support for industrial R&D and innovation, including both direct support through
appropriations and the estimated effects of tax revenue forgone, is expected to reach $1252.5 million in
2006-07, which is an increase of 25.1% in nominal terms from 1996-97.
The R&D Tax Concession, as the Australian Government’s principle mechanism for encouraging private
sector expenditure on R&D, accounts for just over half of the total support for business innovation. Direct
support for business R&D and innovation is however also growing and will rise to $595.5 million in 2006-07,
an increase of $104.8 million in nominal terms over 2005-06. Among the largest programmes are the
Automotive Competitiveness and Investment Scheme ($238.0 million), Commercial Ready Programme
($199.0 million), Pharmaceuticals Partnerships Programme ($31.6 million) and the ICT Centre of Excellence
($24.0 million). Since 1996-97 direct support for business R&D and innovation has increased by 366% in
nominal terms.
Support for university research and research training
Australian Government support for research and research training in Australia’s higher education sector flows
through two channels: support for individual and teams of researchers through competitively awarded grants
and support through performance-based block funding for higher education institutions to conduct research,
train higher degree by research students and upgrade research infrastructure.
In 2006-07 this support is estimated to be $2234.3 million and includes key programmes such as the Australian
Research Council’s National Competitive Grants Programme ($570.3 million), the Research Training Scheme
($573.9 million), Research Infrastructure Block Grants ($203.9 million) and the Australian Postgraduate
Awards Scheme ($95.3 million). Since 1996-97 government support for university research and research
training has increased by 38.5% in nominal terms.
Support for major science and technology programmes
R&D and innovation in major sectors of the economy are supported by Australian Government programmes
and grant schemes which facilitate critical health and medical research, rural research and energy and
environment R&D. In particular, the Cooperative Research Centres (CRC) Programme continues to play an
important role in bringing together researchers and end-users to explore commercial and other applications
of research results for the benefit of Australia’s economy.
In 2006-07, a total of $1135.5 million will be provided to major science and technology programmes, including
$437.6 million for National Health and Medical Research Council (NHMRC) Research Grants, $189.4 million
for the CRC Programme, $221.4 million for rural research and $140.6 million for energy and environment
R&D.
Over the past decade, support for major science and technology programmes has grown substantially from a
share of under 13% of the total government support for science and innovation in 1996-97 to nearly 20% in
2006-07. The Australian Government, for example, doubled its funding for the NHMRC in support of health
R&D since 2000-01, and in 2006-07, increased its support for energy and environment R&D by almost 120%
over the previous year.
Chapter 1 - Science and innovation – advancing our abilities 19

The Australian Government’s investment in science and innovation: Backing
Australia’s Ability
A key feature of the Australian Government’s support for science and innovation is the Backing Australia’s
Ability initiative. Over the decade from 2001-02 to 2010-11 Backing Australia’s Ability is providing $8.3 billion
in funding through two separate packages: Backing Australia’s Ability – An Innovation Action Plan for the Future
(2001), and Backing Australia’s Ability – Building our Future Through Science and Innovation (2004).
Backing Australia’s Ability represents a whole-of-system approach to building Australia’s innovative capacity.
Support is delivered through a number of Australian Government departments and agencies and is focused
under three broad themes identified as critical to sustaining a strong and vibrant national innovation system:
• Strengthening our ability to generate ideas and undertake research;
• Accelerating the commercial application of ideas; and
• Developing and retaining Australian skills.
These themes continue to have broad relevance and, along with the National Research Priorities (see below),
provide a unifying framework for Australia’s science and innovation activities. Progress made by Australian
Government departments and agencies during 2005-06 against the Backing Australia’s Ability themes is outlined
in Chapter 2.
Science and innovation serving national priority goals: the National
Research Priorities
In addition to its significant investments in the capabilities that underpin a vibrant national innovation system,
the Australian Government has implemented policies to improve their contribution to areas of significant
social, economic and environmental benefit to Australia.
The National Research Priorities (NRPs) were announced in December 2002 following an extensive
consultation process. The priorities (An Environmentally Sustainable Australia; Promoting and Maintaining
Good Health; Frontier Technologies for Building and Transforming Australian Industries; and Safeguarding
Australia) are broad-based, thematic and multidisciplinary in nature. They address areas of strength, opportunity
or need in Australian research and assist in promoting, coordinating and implementing the national
research effort.
Progress made by Australian Government departments and agencies in implementing the NRPs in 2005-06
is outlined in Chapter 3.
20 Backing Australia’s Ability

CHAPTER 2 – Initiatives for a dynamic national innovation system
Part I – Strengthening our ability to generate ideas and undertake research
The generation of knowledge through research is a key component of Australia’s national innovation system.
It is a major contributor to innovation, offering the potential of both immediate returns through its use to
improve products and processes, as well as longer term benefits through its capacity to inform future
strategies.
The Australian Government’s support for research and development (R&D) is significant, representing more
than one third of total R&D investment in Australia. This support is directed at a number of areas spanning
both the public and private sectors (see Chapter 1). It plays an active and ongoing role in: building the capacity
of publicly funded research agencies and universities to deliver research outcomes consistent with their
missions and national priority goals; providing incentives for industry investment in R&D; supporting access
to major research infrastructure; and promoting the internationalisation of R&D.
Funding under the Backing Australia’s Ability initiative is a key feature of the Australian Government’s support
for R&D and demonstrates its strong commitment to keeping Australia at the forefront of knowledge. This
section identifies some key indicators of Australia’s performance against this goal, and highlights relevant
activities of Australian Government departments and agencies over 2005-06.
Performance highlights
• Australia accounted for approximately 1.3% of total world R&D expenditure, ranking 14 th in the world
in 2004 (latest figures available).
• Australia’s gross domestic expenditure on research and development (GERD) was at an all-time high
of approximately $15.8 billion in 2004-05, an increase of 19.4% at current prices over 2002-03.
• Australia’s R&D intensity, measured by GERD as a share of GDP, rose to a record level of approximately
1.77% in 2004-05, up from 1.69% in 2002-03.
• In 2004-05, Australia’s R&D expenditure in the public sector (government research agencies and
universities combined) stood at $6.8 billion in 2004-05, an increase of 15.6% at current prices over
2002-03. This included $4.3 billion performed in universities (up 24.9% over 2002-03) and $2.6 billion
in government research agencies (up 2.8% over 2002-03).
• Australia’s business R&D expenditure reached $8.4 billion in 2004-05, which is the highest level
recorded and the sixth successive year of increase. Over the five years to 2004-05, Australia’s business
R&D expenditure grew at a real rate of 11.5% a year.
• Barry Marshall and Robin Warren won the 2005 Nobel Prize in Physiology or Medicine for their work
identifying the bacterium Helicobacter pylori and its role in gastritis and peptic ulcers.
• During the five-year period to 2005, Australia accounted for nearly 3% of the total world scientific
publications, producing 1141 scientific publications per million population over this period.
• Australian scientific publications generated citation impacts higher than the world average over the
period 2001-2005, with particularly strong performance in the fields of space science, geosciences,
mathematics, clinical medicine, plant and animal science, agricultural science, physics, and
ecology/environment.
Chapter 2 - Initiatives for a dynamic national innovation system 21

Sustaining funding for government research agencies
Australian Government Antarctic Division
The Australian Government Antarctic Division (AGAD) is part of the Department of the Environment and
Heritage. Its role is to lead Australia’s Antarctic programme, conduct and support scientific research in
Antarctica and the Southern Ocean, and to administer the Australian Antarctic Territory and the Territory of
Heard Island and MacDonald Islands. In particular, AGAD manages Australian government activity in
Antarctica and the sub-Antarctic, provides transport and logistic support, maintains permanent Australian
research stations, and conducts and manages scientific research programmes on land and at sea.
AGAD supports about 160 scientists in Antarctica and the Southern Ocean each year. Of these, about 40% are
employed by AGAD while the remainder work for Australian and overseas universities and research institutions.
Studies are conducted in the four priority programmes of ice ocean atmosphere and climate, Southern Ocean
ecosystems, adaptation to environmental change and impacts of human activities in Antarctica.
There is also a strong emphasis on climate science (jointly with the Cooperative Research Centre for Antarctic
Climate and Ecosystems) and quantitative marine biology to support Australia’s positions in the Commission
for the Conservation of Antarctic Marine Living Resources and the International Whaling Commission. Scientific
data contributes to improved understanding about new generation climate change models, sea level rise estimates,
sustainable fisheries, Australia’s biodiversity, environmental protection and space weather. Research is also
conducted in human biology and medicine, space and atmospheric sciences, astronomy, and geosciences.
In 2005, Antarctic science supported by AGAD resulted in 327 publications of which 137 were in peer reviewed
publications and 36 contributed to supporting Australia’s position in the Commission for the Conservation
of Antarctic Marine Living Resources. Ninety-two chief investigators conducted 122 science projects during
the year. Australian Antarctic Science Grants, available to projects led by researchers from Australian universities
or state institutions, were awarded to 47 of these projects.
A total of 162 scientists travelled to Antarctica and the Southern Ocean to undertake research. Of these,
96 were employed by universities and research institutions in Australia and overseas and 66 were scientists
employed by AGAD. The Australian Antarctic programme also supported 131 students including 86 PhD,
13 Masters of Science, 24 Honours and eight undergraduate students. AGAD collaborates extensively with other
institutions, both within Australia and overseas, and throughout the year, there were collaborations with
176 institutions in 28 different countries.
For 2006-07, AGAD and other contributors to Australia’s Antarctic programme will undertake field work on
the Antarctic continent and sub-Antarctic at Macquarie Island. Activities will also include a marine science
voyage to the sub-Antarctic zone to characterise key components of Southern Ocean planktonic ecosystems,
their influence on carbon dioxide exchange with the atmosphere and the deep ocean, and their sensitivity to
past and future global change including climate warming, ocean stratification, and ocean acidification from
anthropogenic carbon dioxide emissions.
More information about AGAD and its programmes and activities can be found at: www.aad.gov.au
22 Backing Australia’s Ability

Climate research on the Amery Ice Shelf
Research conducted by the Australian Government Antarctic Division into the dynamics of heat transfer between
the waters flowing underneath the Amery Ice Shelf continued in 2006 with the completion of two further bore
holes made with a hot-water drill.
The project is part of a strong research effort focused on the factors affecting local climate conditions. Both
holes were instrumented with thermistors and upward-looking sonars, which revealed details of the
freeze-melt interface and the crystal structure of reforming marine ice. Samples from the sea floor
underneath the ice were extracted for examination of past glacial events. Initial photographic analysis of
the cavity beneath the ice revealed the unexpected presence of Antarctic krill and other invertebrates.
On the same ice shelf, the Australian Government Antarctic Division is also conducting research in collaboration
with the University of Tasmania and the Scripps Institute of Oceanography on a large block of calving
ice at the margin of the shelf.
Detailed differential GPS observations have shown that rifting occurs faster in summer than winter and
occurs in short, sharp bursts followed by periods of relative quiescence. It is expected this block of ice will
calve within the next few years into a substantial iceberg, some 30 kilometres long. Observations are expected
to continue for the next two years with joint studies being undertaken by US and Australian scientists.
Signals from Antarctica have been detected by hydroacoustic sensors based in Western Australia and on
an Indian Ocean island. Scientists at Curtin University have identified the signals as either long lasting harmonic
tremors associated with drifting icebergs or pulse-like signals from ice shelf fracturing. The sensors, which
monitor the ocean as part of the comprehensive test ban treaty, show potential for long-term monitoring of
changes in Antarctic ice.
Australian Biological Resources Study
The Australian Biological Resources Study (ABRS) funds taxonomic and biogeographic research and training
that leads to the scientific documentation of Australia’s biodiversity. In 2005-06, total research expenditure under
the programme was $1.869 million, which included support for 57 taxonomic research projects, four scholarships,
18 student bursaries and a number of small research contracts.
All ABRS projects contribute to the taxonomic knowledge necessary for the conservation and sustainable use
of Australia’s biodiversity. Taxonomic information also contributes to industries such as medicine, biosecurity,
bioprospecting and agriculture.
In 2006 investigations included research into such diverse biota as zooxanthellae (microalgae), diatoms, dinoflagellates,
xiphydriidae (primitive woodwasps), sea anemones, kangaroo beetles, orchids, smut fungi (causing diseases
particularly to cereals and native grasses) and polychaetes (segmented sea worms that are the main food source
for many commercially important shellfish and fish).
ABRS research will contribute to future publications such as Fungi of Australia, Algae of Australia, Flora of Australia
and the ABRS identifi cation series, and expand existing online sources of information including the Flora of
Australia online and the Australian faunal directory (now holding information on 70 900 species). Two books,
(Fungi of Australia, Hygrophoraceae and Castiarina, Australia’s richest jewel beetle genus) and one CDROM (Catalogue
of tunicata in Australian waters) were published during the year. Other products launched were:
• Flora of Australia, Volume 44B is the second part of four volumes on Australia’s grasses;
• Native plants of Christmas Island is No. 22 in the Flora of Australia supplementary series and illustrates 118 of
the island’s most common native plants;
• Fabulous fl atworms: a guide to marine polyclads is the first CDROM to identify over 400 species of polyclad
flatworms from around the world;
Chapter 2 - Initiatives for a dynamic national innovation system 23

• Key to Australasian liverwort and hornwort genera is the first comprehensive guide to all 181 genera of
liverworts and hornworts known from Australia and New Zealand; and
• Native earthworms of Australia II is a CD ‘book’ that describes 33 previously unknown earthworms and
revises the names and distributions of a further 29 species.
ABRS works collaboratively with researchers based at publicly funded research agencies to further the national
taxonomic capacity and output. ABRS also collaborates with the Global Biodiversity Information Facility and
is developing the Australian Biodiversity Information Facility portal that aims to provide real-time access to a
wide range of biodiversity data held and maintained by individuals and institutions throughout Australia.
More information about ABRS and its programmes and activities can be found at:
www.deh.gov.au/biodiversity/abrs/
Protecting Australia’s jewels
In 2006 the Australian Biological Resources
Study published a useful tool for scientists, natural
resource managers and wildlife protection officials
on a diverse group of jewel beetles.
Castiarina, Australia’s richest jewel beetle genus brings
together illustrations of all 478 castiarina species,
taxonomic information from more than a dozen
scientific papers and new information, including
identification keys and notes on conservation,
mimicry, diagnostic features, distribution and
adult food.
Launch at the South Australian Museum. Photo credits: ABRS
The book was most awaited in Western Australia,
where the group is most diverse, and in Tasmania,
where one species is listed as endangered.
The book was launched in April 2006 by the
Chair of the University of Adelaide’s School of
Earth and Environmental Science, Professor
Robert Hill, at a gathering at the South Australian
Museum.
Castiarina beetles. Photo credits: ABRS
24 Backing Australia’s Ability

Australian Institute of Aboriginal and Torres Strait Islander Studies
The Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) is a statutory body and
independent research organisation promoting knowledge and understanding of past and present Australian
Indigenous cultures. It has four functional programmes – research, audiovisual archives, library services and
press – and houses the world’s premiere collection of Aboriginal and Torres Strait Islander resources including
printed material, sound recordings, films and video. The audiovisual archive holds almost one million items
including photographic images, works of art, artefacts, audio, film and video in many different formats. A key
role is to ensure the safety and longevity of materials and to migrate information onto the latest technologies
so that material remains accessible for future generations of Australians.
Multi-disciplinary research is undertaken, sometimes collaboratively, in diverse areas of Australian Indigenous studies.
The research programme also contributes to policy formulation in priority areas and support is provided for
producing the journal Australian Aboriginal Studies, teaching and trainee researchers, and publishing in print and
via the AIATSIS website. Academic books include history, anthropology, archaeology, land rights and native title,
health, education, languages and art, while general books include biography, autobiography and community stories.
Seminars, workshops and conferences are supported and a comprehensive set of ethical research protocols has
been established. Of particular importance, the Native Title Research Unit addresses specific needs arising from
the recognition of native title.
The research programme also administers the institute’s research grants programme and supports the institute
in providing training, facilities and support for Indigenous trainee researchers and visiting and honorary scholars.
AIATSIS is committed to social justice and equity. Its constituted committees and policies maximise the involvement
of Aboriginal and Torres Strait Islander people in the institute’s membership, governance, staff and functions.
More information about AIATSIS and its programmes and activities can be found at:
www.aiatsis.gov.au/
Australian Institute of Criminology
The Australian Institute of Criminology (AIC) is a statutory body and independent, national research organisation
that undertakes research on crime and justice issues. It also disseminates information about research findings
and criminological statistics.
The institute’s research programme includes national monitoring programmes on homicide, firearms, drug use
and crime, armed robbery, deaths in custody and juvenile detention. In 2005-06 a wide range of projects have
been undertaken, including research on fisheries crime, bushfire arson, sexual assault, high-tech crime, serious taxation
fraud and illicit drug use in rural and remote Indigenous communities.
AIC participates in collaborative research arrangements with a range of key stakeholders, including the Australian
Federal Police, the Australian Crime Commission, Australian Customs Service, the NSW Police, and the Western
Australia Office of Crime Prevention. It also has extensive and long-standing links with the academic community
and government research agencies in Australia and overseas.
The overall aim of its research activities is to improve the evidence base for policy and practice, and public
awareness of major types of offending, victimisation risk factors and effective measures to reduce and prevent
crime. A key role is to inform efforts to tackle emerging and complex crimes that often lie outside traditional
boundaries and make use of increased globalisation and technological developments.
AIC produces a wide range of research products including short policy and practice oriented papers on trends
and issues, research reports, technical papers, and short factual sheets disseminated regularly via email. It has a
long-standing track record in convening national conferences and roundtables on topical and emerging issues.
Its website is well-recognised in Australia and internationally for its extensive range of material and statistics.
More information about AIC and its programmes and activities can be found at:
www.aic.gov.au/
Chapter 2 - Initiatives for a dynamic national innovation system 25

Australian Institute of Marine Science
The Australian Institute of Marine Science (AIMS) is one of the world’s most prolific and innovative marine
research agencies. AIMS is known for its unique capacity to investigate topics ranging from broad-scale ecology
to microbiology and consistently ranks among the top 1% of specialist research institutions internationally.
Highly specialised facilities, world-renowned staff and well-developed partnerships have secured the institute’s
position as a global leader in tropical marine science.
Riches run deep at Ningaloo Marine Park
A pioneering survey has unveiled rich and exotic marine life in the deep waters of Western Australia’s
Ningaloo Marine Park.
The first of three annual expeditions planned for the study revealed diverse sponge gardens as deep as
100 metres. Large specimens weighing up to 60 kilograms and several novel sponge species were among
the exciting discoveries.
The Australian Institute of Marine Science led this collaborative project, which was co-funded by the
Western Australian Government through the Ningaloo Research Fund, and is now incorporated into the
Western Australian Marine Science Institution. Other partners included the University of Western
Australia, Curtin University and the Western Australian Museum.
A key aim of the research is to provide new knowledge about marine life on and near the seabed in the
areas of the marine park that are inaccessible to divers. The new information is a priority for marine managers
to ensure comprehensive, adequate and representative protection of deep water habitats that conserve
the marine park’s biodiversity.
More than 100 kilometres of the northern sector of the marine park was examined in the survey, using a mix
of advanced underwater video equipment, acoustic mapping tools and more routinely used sled and grab
sampling devices. In addition, collaborators from the Centre of Excellence for Field Robotics at Sydney
University tested one of Australia’s most advanced
Autonomous Underwater Vehicles for deep water terrain
mapping. The vehicle used 3D stereo imaging to create a
picture of Ningaloo’s seabed communities.
Highly specialised sponges (some weighing up to 60 kg) were discovered at
Ningaloo Reef growing in deep waters nearly devoid of light – an unexpected
place to find these photosynthetic organisms. Photo credit: Sydney University’s
Centre of Excellence for Field Robotics
Hundreds of species were collected from representative
areas of the marine park. These collections are being processed
at the Western Australia Museum and will provide the
foundation for a seabed biodiversity database of Ningaloo’s
deeper waters. Further expeditions to explore the remaining
areas of the marine park are expected to add to the ongoing
species inventory of Ningaloo and to identify biodiversity
hotspots.
26 Backing Australia’s Ability

The institute’s main laboratory is located at Cape Ferguson, 50 kilometres from Townsville, and includes
purpose-built laboratories for biotechnology, organic chemistry, geochemistry, biochemistry, molecular genetics,
analytical chemistry, as well as multi-use laboratories for the support of ecological tasks. Support laboratories
in Fremantle and Darwin supplement research undertaken at the main facility. Two AIMS research vessels, the
Cape Ferguson and Lady Basten, support access to tropical waters off Queensland, the Northern Territory and
Western Australia. A fleet of smaller vessels supports fieldwork near and offshore.
AIMS is committed to the sustainable use and protection of Australia’s marine resources. Its research
programmes support the management of tropical marine environments around the globe with a primary focus
on the Great Barrier Reef World Heritage Area and Ningaloo Marine Park in Western Australia. Reef tourism,
offshore oil and gas, fisheries, mining and aquaculture industries have all benefited from AIMS research that
is geared towards the sustainable development of key marine industries. These benefits will extend into the future
and underwrite new areas of the economy such as the emerging environmental biotechnology industry.
AIMS continued to enhance understanding of Australia’s marine environment during the year. Major outcomes
and achievements included:
• surveys to measure the effect of reef closures on the Great Barrier Reef, which showed that coral trout,
the most important fish taken from the park by commercial and recreational fisheries, had increased in
abundance by an average of 150% across all regions on reefs closed to fishing by rezoning. As these
additional fish mature, their extra spawn is expected to enhance the replenishment of coral trout
populations on nearby reefs that remain open to fishing, potentially offsetting the loss of fishable areas;
• collaborative research to domesticate the tropical rock lobster, panulirus ornatus,which has taken a
significant step forward with successful rearing of larval lobsters through to the penultimate moult;
• a pilot sponge farm at Masig Island in the Torres Strait. Local divers have reported sponge cuttings
doubling in size over six months when suspended in mesh panels. Scientists have worked out the best
size for such cuttings and have shown that natural sponges can survive and regenerate their mass even
after 70% of their tissue has been removed. Due to the capacity of the sponge to be propagated from
cuttings, there should be little or no need to harvest wild sponges once cultured stocks are abundant;
and
• refining of baited remote underwater video stations as a method for sampling fish in places where divers
cannot go. These tools have been applied and validated in diverse sampling projects, which has generated
considerable interest from other scientists and potential clients.
Collaborations with national and overseas partners add significant value to AIMS research outputs and
outcomes. In the past 12 months, 79% of AIMS journal publications were co-authored with researchers from
other institutions and 47% were co-authored with researchers from overseas organisations. AIMS also collaborated
with 87 organisations nationally and organisations from 18 countries.
More information about AIMS and its programmes and activities can be found at:
www.aims.gov.au
Chapter 2 - Initiatives for a dynamic national innovation system 27

Coral gives new insight into changing ocean acidity
The rising level of greenhouse gases in the atmosphere is changing the acidity of oceanic waters.
Researchers from the Australian Institute of Marine Science and the Australian National University have
obtained the first historical insight into changes in ocean acidity and coral growth.
The scientists analysed a core sample from a 300-year-old massive coral on Flinders Reef in the western Coral
Sea and measured its past growth rates by studying the growth rings in the coral. They compared these with
levels of boron isotopes, which provide a marker for ocean acidity. Their results showed ocean acidity rose
and fell approximately every 55 years, coinciding with periodic fluctuations in global climate.
The relatively large variations in seawater acidity experienced at Flinders Reef suggest coral reefs may be
resilient to the short-term effects of ocean acidification. However, in the coming decades many reefs are likely
to experience unnaturally high acidity levels.
Improved understanding of the response of coral reefs to increased acidity and the long-term impacts of
ocean acidification will be important in predicting the effects of climate change on coral reefs and other
marine communities.
Massive corals found throughout Australia’s tropical waters, act like living libraries with coral core samples providing information on weather patterns, terrestrial
run-off and oceanic conditions of the past. Photo credits: E. Matson, AIMS
Australian Nuclear Science and Technology Organisation
The Australian Nuclear Science and Technology Organisation (ANSTO) is Australia’s national nuclear
organisation and the centre of Australian nuclear expertise. Over the past year the organisation has continued
its record of accomplishment with a number of milestones met and exceeded.
In 2005-06, the OPAL reactor’s construction was completed and an operating licence was granted on 14 July by
the regulator, the Australian Radiation Protection and Nuclear Safety Agency, which allowed hot commissioning
to commence. The current ANSTO High Flux Australian Reactor (HIFAR) will be shut down when OPAL
is in routine operation in early 2007.
28 Backing Australia’s Ability

OPAL will provide neutrons to a world-class neutron beam facility in which a number of the instruments will
have the best performance in the world. Its extensive irradiation facilities will be used to produce medical and
industrial isotopes and to transform silicon ingots, of which ANSTO is a leading supplier to semiconductor
manufacturers around the world. The new reactor will be a regional centre of excellence for neutron beam science,
and is attracting strong interest from scientists in Australia and internationally working in such fields as biology,
materials science and food science.
ANSTO took a pioneering role in assessing research performance in 2005-06 in line with the objectives of
the Australian Government’s Research Quality Framework. Individual assessments placed approximately 60% of
ANSTO researchers in the top 25% of their fields internationally. ANSTO continues to contribute to disseminating
research ideas and results, with two books, chapters and monographs, 172 journal articles and 269 conference
papers and abstracts for the year.
Market outcomes included 36 inventions and designs with active commercialisation plans, including AQUARISK,
ANSTO’s environmental risk software, which was launched in late 2005 on Hearne Scientific Software’s website
www.hearne.com.au/aquarisk. This world-first tool is the result of years of research into the biological impact
of acid rock drainage and release of metals into the environment resulting from industrial processes such as mining.
Sixteen invention disclosures and four provisional patent filings were also undertaken. Patents for technologies
developed by ANSTO scientists include a patent for the controlled release of ceramic particles technology, which
is the platform of ANSTO’s CeramiSphere business. Numerous expressions of interests in this technology’s
applications have been received from major multinational companies, particularly in the home care and
cosmetic markets.
Another patent is for the cryptate compounds technology, jointly developed with the Australian National
University, for which various medical applications are being developed with several European and North
American partners.
In respect of research training, ANSTO supervised 195 postgraduate and undergraduate research students during
the year. The number of ANSTO post-doctoral fellowships was substantially increased from nine at July 2005 to 41
at June 2006, of which 15 are fully or partly funded by other research organisations.
ANSTO also signed an agreement with the University of Sydney to support postgraduate students working in
targeted areas. New distinguished researcher fellowship positions were created worth up to $250 000 a year. These
are intended to attract top international researchers to join ANSTO to work in areas that have been targeted
based on the organisation’s strategic directions.
OPAL operation was a focus of staff training: 14 staff received their formal accreditation as OPAL shift managers
and reactor engineers, and four plant operators were authorised.
ANSTO’s research projects involved 251 collaborations during the year. Initiatives included new memorandums
of understanding for collaboration with the University of Melbourne and the University of Sydney. ANSTO and
CSIRO have also agreed to collaborate to determine the molecular structure of foods. ANSTO will use
advanced neutron scattering techniques to examine complex food structures and determine how these are
altered by food processing, and how such modifications affect nutrition and long-term health.
A range of initiatives were undertaken during the year to help raise awareness of ANSTO, its activities and its
achievements:
• The Powerhouse Museum prepared an educational show based on ANSTO’s science. The Dating Game
covered several methods for determining the age of materials focusing on ANSTO’s radiocarbon dating
capabilities.
• Atomical, ANSTO’s tri-annual newsletter, was distributed to various stakeholders including community
members, schools, government, business and science contacts.
Chapter 2 - Initiatives for a dynamic national innovation system 29

• As part of the joint Careers in Science initiative run by
ANSTO, Commonwealth Scientific and Industrial
Research Organisation (CSIRO), AIMS, the Defence
Science and Technology Organisation, and the NSW
Government Office of Science and Medical Research,
lesson plans for high school science teachers and careers
advisers were developed and made available on the
Careers in Science website at: www.careersinscience.gov.
au/resources_lesson.html.
ANSTO’s Ross Miller and Greg Whitbourn show OPAL to visitors
from the National Science Council of Taiwan who are funding one
of the new neutron scattering instruments, Sika.
• ANSTO’s quarterly science magazine Velocity: science in
motion featured stories on the work of scientists and
science agencies across Australia. It was awarded the
Public Relations Institute of Australia’s Gold Award for
Marketing Communication in September 2005.
More information about ANSTO and its programmes
and activities can be found at: www.ansto.gov.au
Commander David Bachi from the Australian Federal Police, Dr Ian
Smith, Executive Director of ANSTO, and The Hon. Danna Vale MP
at the opening of ANSTO’s new main entrance and reception facility.
Bureau of Meteorology Research Centre
The Bureau of Meteorology Research Centre (BMRC) lies
within the Research Division of the Bureau of Meteorology,
Australia’s national meteorological service. It aims to fulfil the
bureau’s statutory responsibility to advance meteorological
science with a focus on the Southern Hemisphere and the
Australian region and enhance the bureau’s operations and
services through the development of advanced systems and
techniques. BMRC also promotes the application of meteoro
logical science for the general good of the Australian
community.
These objectives are met through the sub-programmes of
weather, climate, ocean and hydrology research, implemented
via six thematic research groups:
• Model development – research into atmospheric
modelling to support weather and climate research and
operations.
The new OPAL reactor at ANSTO is housed in a striking building
with the distinctive ‘chip basket’ top.
• Data assimilation – research on advanced data
assimilation systems to support model prediction and
validation in research and operations.
• Climate dynamics – the use of climate models to
improve understanding of climate predictability,
variability and change, and to improve the performance
of climate models.
• Weather forecasting – improving the understanding of
mesoscale processes and developing systems to enhance
weather forecasting services.
• Climate forecasting – improving the understanding of
Australian climate, including the effects of climate
change, and developing systems to predict climate.
Historic moment: the first fuel rod is loaded into OPAL.
Photo credits: ANSTO
30 Backing Australia’s Ability
• Ocean and marine forecasting – improving the understanding
of the variability of the oceans and marine
environment of the Australian region, and developing
systems for monitoring and predicting ocean
variability.

In 2005-06, more than 60 articles reporting research results and authored by BMRC scientists were published in
international peer-reviewed journals and books. A further 90 were published as reports or conference papers.
Scientists served on a wide range of national and international working groups and external advisory committees,
while staff made more than 100 attendances at external conferences, workshops and symposia, both domestic
and international, at which scientific results were presented. In addition, more than 50 overseas visits were
made to meetings of international bodies and to other research institutions.
Collaborations occurred with researchers in at least 10 Australian and 20 overseas universities, while significant
local collaborations were undertaken with CSIRO, the Royal Australian Navy, the Western Australian
Government, the Australian Greenhouse Office, and the Australian Radiation Protection and Nuclear Safety
Agency. Overseas collaborations included scientists from US government agencies and national meteorological
services in China, New Zealand, Japan, the United Kingdom, Indonesia and other Asian and Pacific countries.
Planning for major international scientific experiments was also undertaken including for the Tropical Warm
Pool – International Cloud Experiment, the largest meteorological field experiment staged in Australia, held in
and around Darwin in January and February 2006.
An important new collaboration is the Australian Community Climate and Earth-System Simulator (ACCESS),
which is a coupled climate and earth system simulator under development as a joint initiative of the Bureau
of Meteorology and CSIRO in cooperation with the university community in Australia.
A major indicator of the success of BMRC’s scientific programmes is the extent to which its research output enhances
the operations and services of the bureau. BMRC undertakes the development of advanced systems (including
regional and global models of the atmosphere and ocean) and techniques which, after thorough testing and
evaluation, become the operational systems that provide the basis for the bureau’s services and products.
Recent implementations include a new fire weather service, and continuing upgrades to modelling systems
used for tropical prediction, ultraviolet alerts, thunderstorm forecast guidance, ocean forecasting, weather
elements and the transport and dispersion of a wide range of airborne elements (including pollutants, volcanic
ash, bushfire smoke, the foot and mouth disease virus, radioactive plumes and dust storms).
More information about BMRC and its programmes and activities can be found at:
www.bom.gov.au/bmrc
Commonwealth Scientific and Industrial Research Organisation
The Commonwealth Scientific and Industrial Research Organisation (CSIRO) is Australia’s national science agency,
performing research in a diversity of areas to help build Australia’s prosperity, health and sustainability. CSIRO
adds to Australia’s research reputation and promotes its well-being by focusing its efforts around five core roles:
• addressing major national challenges and opportunities;
• creating new or significantly transforming industries to increase the competitiveness and sustainability
of Australian industry;
• delivering incremental innovation to improve the efficiency and competitiveness of existing industries;
• providing fact-based solutions that meet community needs and knowledge that informs government
policy; and
• advancing the frontiers of science.
CSIRO’s scale, diversity and delivery of multidisciplinary research, which is managed at the enterprise level for
impact, differentiate it from other parts of Australia’s research system. These characteristics are epitomised by
CSIRO’s development and management of the six national research flagships. These respond to, and create, major
opportunities in energy, food, light metals, preventative health, water management and delivering impacts from
our ocean.
Chapter 2 - Initiatives for a dynamic national innovation system 31

Developing meaningful, long-term collaborative partnerships with industry, government and semi-government
agencies, as well as with Australian and international universities, remains a priority for CSIRO. Flagships
already involve over 250 industry partners and research institution collaborators across Australia. During 2005-
06, CSIRO participated in 48 of the 71 currently active Cooperative Research Centres (CRCs).
CSIRO hosts three major National Research Facilities – the Australian Animal Health Laboratory, the Australia
Telescope and the Oceanographic Research Vessel Southern Surveyor – and over 30 other research facilities such
as the Riverside Life Sciences Centre, CSIRO Discovery Centre and the Australian Resources Research Centre.
CSIRO also manages 11 national reference collections including the Australian National Fish Collection, the
Australian National Insect Collection, the Australian National Herbarium, the Australian National Wildlife
Collection, the National Tree Seed Collection and the Scientific Marine Data Collection.
CSIRO continues to be prolific in terms of publishing and patenting (see below). Five new spin-off companies
were also formed during the year, taking the market value of CSIRO’s spin-off portfolio to record levels.
CSIRO generated record revenues ($37.1 million) from its intellectual property assets – that is 82% year on
year growth, up from $9.3 million in 2000-01.
Table 2: Number of publications produced by CSIRO – by type of publication, 2002 to 2005
2002 2003 2004 2005
Journal articles 1686 1836 1858 1945
Books/chapters 223 240 270 238
Conference papers 1142 1428 1713 1852
Technical reports 240 442 280 620
Client reports 10 486 8451 8251 10 774
Table 3: Intellectual property generated by CSIRO – by type of intellectual property, 2002 to 2006
2002 2003 2004 2005 2006
Inventions (patent families) 733 779 754 745 780
New inventions 80 92 89 79 134
Current Patent cooperation Treaty inventions 104 90 92 95 74
Granted patents 1801 2002 2079 2048 2113
Live patent cases 3537 3965 3961 3919 4084
Australian trade marks 262 287 290 306 281
Foreign trade marks 84 93 92 100 91
Australian plant breeder’s rights 65 62 77 80 113
Foreign plant breeder’s rights 17 17 17 21 17
Australian registered designs 8 5 3 3 2
Foreign registered designs 9 12 12 12 12
CSIRO employs more than 6500 staff. Over 60% of them hold university degrees, more than 2000 have
Doctorates and 470 have Masters degrees. At any one time, CSIRO is host to over 2000 visitors including
students, CSIRO fellows, visiting scientists, and other groups making use of the organisation’s facilities and
collections or participating in collaborative research projects.
32 Backing Australia’s Ability

Table 4: Numbers of staff and post doctorates in CSIRO, 2003 to 2006
2003 2004 2005 2006
Staff numbers (total) 6636 6574 6576 6558
CSIRO post doctorates 207 259 282 290
Table 5: Research training in CSIRO, 2003 to 2006
2003
(June 30)
2004
(June 30)
2005
(June 30)
2006
(June 30)
Sponsored post graduates 194 235 245 277
Supervised post graduates 535 566 538 423
CSIRO Education involves over 700 000 students, parents and teachers each year in activities that encourage
appreciation of science. CSIRO jointly produces the SCOPE TV programme, which has a viewing audience
of over 400 000 each week. There are nine CSIRO Science Education Centres across Australia that provide handson
classes for more than 260 000 students. These workshops are both in the centres, and through the Lab on
Legs travelling programme operating throughout Australia. CSIRO’s Double Helix Science Club offers two
magazines – The Helix (circulation 13 000) and Scientriffi c (circulation 12 000), as well as events and activities
for members. CSIRO Education also offers a range of other programmes for school students and teachers.
During 2005-06, CSIRO completed the second year of the first cycle of its divisional science assessment reviews
by conducting reviews of sustainable ecosystems, livestock industries, land and water, energy technology,
mathematical and information sciences, and exploration and mining. These external reviews are continuing to
confirm that CSIRO’s research capabilities as a mission driven organisation are appropriately aligned against
the two dimensions of research impact and industry/community impact.
More information about CSIRO and its programmes and activities can be found at: www.csiro.au
Dioxins emissions in bushfires
The Commonwealth Scientific and Industrial Research Organisation Division of Marine
and Atmospheric Research is working to provide a more accurate estimate of the total
emissions of dioxins from bushfires in Australia.
The study, which is funded by the Department of the Environment and Heritage through
the Australian Government’s National Dioxins Programme, also aims to determine and
assess the extent to which dioxin releases are the result of new formation during fires,
or re-mobilisation of dioxins from the soil, ground litter or vegetation.
The project has involved laboratory and field experiments to determine the extent to which
dioxins are formed during a bushfire or are re-distributed from the soil, ground litter and
vegetation. Priority has been given to assessing savannah type vegetation and eucalypt forests.
The study builds on earlier Department of the Environment and Heritage funded research
by the Commonwealth Scientific and Industrial Research Organisation, which assessed
dioxin emissions in bushfires. This earlier study has been recognised internationally as
significantly increasing knowledge about dioxins in bushfires.
All the laboratory and field experiments were completed in 2005-06. Its findings will provide
valuable information for policy decisions in Australia and other countries with an interest
in dioxins in bushfires. For further information see www.deh.gov.au/settlements/
chemicals/dioxins/index.html
CSIRO research into the emissions
of dioxins from bushfires in Australia.
Photo credits: CSIRO
Chapter 2 - Initiatives for a dynamic national innovation system 33

Defence Science and Technology Organisation
The Defence Science and Technology Organisation (DSTO) is the Australian Government’s leading science
agency dedicated to applying science and technology to protect and defend Australia and its national interests.
DSTO pursues excellence in science and technology to:
• support whole-of-government national security needs;
• investigate future technologies for defence applications;
• ensure that Australia is a smart buyer of defence equipment;
• develop new defence capabilities; and
• enhance existing capabilities by increasing operational effectiveness, improving safety of our people
and maximising availability and reducing the cost of ownership.
Research facilities are located in Melbourne, Sydney, Canberra, Edinburgh (near Adelaide), Rockingham (near
Perth), Scottsdale in Tasmania and Innisfail in northern Queensland. DSTO’s corporate headquarters is
located with the Department of Defence headquarters in Canberra.
Over the last year DSTO published close to 200 scientific reports as well as over 250 publications in scientific
and technical journals. More than 380 reports were written for the Department of Defence and external clients,
and six provisional patent applications were filed.
Eight technology licence agreements and three marketing agreements were also completed during 2005-06.
These included:
• a personal radar warning receiver – a small form-factor radar warning receiver that could form part of
a soldier’s suite of situational awareness and personal protection tools;
• a fast roping and rappelling device for use by special operations troops to disembark rapidly from
helicopters, including the Black Hawk;
• data compression technology for use in slow response channels. The technology may be used in concert
with underwater sonar data transmission and reception equipment; and
• a thermo elastic stress analysis system for low cost non-destructive testing of industrial components.
At 30 June 2006, DSTO had 2382 staff, predominantly scientists, engineers, IT specialists and technicians,
with nearly 35% of all staff holding PhDs. The organisation had a further 21 military personnel attached to it.
Scholarships were also awarded to a number of students under a variety of external programmes, including:
• Summer Vacation Scholarships. 58 scholarships were offered to promising tertiary students in a variety
of disciplines, including engineering (in particular computer systems, software, mechanical and
aerospace), computer science, mathematics, physics and information technology;
• Industry Experience Placements. 21 placements were offered to high achieving tertiary students in a
variety of disciplines such as applied science, physics, computer science, photonics, computer systems
engineering, software engineering and telecommunications engineering; and
• Graduate Industry Linked Entrepreneurial Scheme. 10 scholarships were offered to recent graduates
from the University of Adelaide across a range of disciplines.
DSTO marketed over 40 technologies during 2005-06 including laser technologies, carbon tissue material for
absorbing electromagnetic radiation, an innovative water treatment technology and photonic modulators for
very high speed communication applications. DSTO also entered into two new alliance agreements with industry,
placed 78 research agreements (primarily with universities) and entered into 12 collaborative arrangements across
a wide range of technology disciplines.
34 Backing Australia’s Ability

Advanced nuclear, biological and chemical combat suits
The next generation of combat suits being developed by
the Defence Science and Technology Organisation will not
only provide protection against chemical and biological
agents, but will be able to self decontaminate.
While the current combat suit offers protection against
chemical and biological agents it cannot destroy them.
The organisation is developing a new suit that can break
down these contaminants as well as offer physical
protection.
The current suit has a layer of carbon amongst the
materials, which provides the protection. The aim of the
new suit is to impregnate this layer of carbon spheres
with a new blend of chemicals that can kill bacteria and
also break down harmful chemical agents.
Advanced nuclear, biological & chemical combat suits. From L to R, David Proll
and George Favas holding the material of the combat suit showing the carbon layer.
Photo credits: DSTO
Scientists have identified compounds that have this ability
to destroy the bacterial agents and are now working on finding the best blend of these compounds that will
attach to the carbon and offer better protection.
This self-decontaminating feature will be integrated into future combat suits in coming years.
Technology developed by DSTO has received national and international recognition. The DSTO-developed
Starlight computer security system, for example, has been granted the highest possible level of security certification
by the US government. Starlight allows users of secure computer systems to access insecure networks without
compromising their own security and is now used in the Departments of Defence and Foreign Affairs and
Trade. Overseas, it is in operation in the US, Canada, the UK and New Zealand.
A new agreement with the University of Sydney led to the establishment of a centre of expertise in defence
autonomous and uninhabited vehicle systems. DSTO and the University of South Australia signed an agreement
for the establishment of a new centre of expertise in systems integration. New centres of expertise in phased array
and microwave radar systems and photonics have been established following the signing of separate agreements
between DSTO and the University of Adelaide.
More information about DSTO and its programmes and activities can be found at:
www.dsto.defence.gov.au/
Geoscience Australia
Geoscience Australia delivers geoscientific data, information and knowledge that enables the Australian
Government and the community to make informed decisions about the exploitation of resources, management
of the environment, safety of critical infrastructure and the resultant well-being of all Australians.
It conducts first-class innovative research and maintains, develops, integrates, permits and encourages access to
the agency’s massive holdings of fundamental geoscientific data and information. The data, information and
knowledge infrastructure provided by Geoscience Australia facilitates a broad range of innovations across
Australian industries, government organisations, academia and community groups.
Chapter 2 - Initiatives for a dynamic national innovation system 35

In 2005-06, Geoscience Australia strengthened Australia’s ability to generate ideas and created new knowledge as it:
• built new investment opportunities in south-western and northern Australia in support of the 2006
offshore petroleum acreage release, and helped the quest for a new oil province for Australia by acquiring
and interpreting marine and seismic survey data;
• supported national initiatives in critical infrastructure protection by establishing a spatial information, risk
analysis and modelling capability;
• improved natural risk assessment by developing a framework for risk assessment models, methods and
databases in support of the Disaster Mitigation Australia Package;
• supported the development of regional marine plans by providing marine geoscience advice to government;
• strengthened Australia’s seismic and geodetic monitoring capability in the South-East Asian region to better
understand the region’s tectonics and seismic hazards;
• improved access to pre-competitive geoscience information and compilations by accelerating development
of internet-based delivery systems;
• created new opportunities for mineral exploration through the provision of new pre-competitive
geoscience information for the Gawler, Paterson, Tanami provinces and the Lachlan Fold Belt of Eastern
Australia (Queensland, New South Wales, Victoria and Tasmania);
• provided timely and relevant technical advice to government on a range of minerals-related issues
throughout the year;
• completed phase III of the preservation of deteriorating seismic records in the national archive of
petroleum industry data;
• helped develop options for geological sequestration of carbon dioxide through the Greenhouse Gas
Technologies Cooperative Research Centre and provided technical advice on carbon capture and storage
to mitigate greenhouse gas emissions;
• completed the 1:100 000 pilot mapping programme to address areas of high bushfire risk; and
• completed phase I of the Australian Marine Spatial Information System (AMSIS) pertaining to the
Australian Marine Jurisdiction.
More information about Geoscience Australia and its programmes and activities can be found at:
www.ga.gov.au
Moving mountains
Antarctic worker
Damien Gildea on top
of Mount Craddock.
Photo credit:
Geoscience Australia
‘So here we are, standing 4650 metres above sea level atop Mount Craddock, Antarctica’s 4th
highest mountain. Or so we thought...’
These were the words of Antarctic worker Damien Gildea when he received notification from
the online global positioning system (GPS) processing service AUSPOS that the peak he
had just climbed was not quite as high as he expected. According to the GPS data Damien
had just input to AUSPOS, Mt Craddock is in fact only 4368 metres high, falling some
282 metres short of the anticipated high of 4650 metres.
AUSPOS is a free service provided by Geoscience Australia that enables users to submit
GPS data via the internet and rapidly receive accurate geodetic coordinates to international standard.
Increasingly, the spatial information sector is turning to the internet as a tool to aid its activities. As a freely
available service, AUSPOS encourages consistency of all precise coordinates used by the public and private
sector GPS community.
The AUSPOS service takes advantage of the Australian Regional GPS Network and the International GPS
network, and can be used for GPS data collected anywhere on Earth.
36 Backing Australia’s Ability

Great Barrier Reef Marine Park Authority
The Great Barrier Reef Marine Park Authority is the Australian Government’s principal adviser on the care and
development of the Great Barrier Reef Marine Park. The authority undertakes a variety of activities including:
• developing and implementing zoning and management plans;
• environmental impact assessment and permitting of use;
• research, monitoring and interpreting data; and
• providing information, educational services and marine environmental management advice.
In 2005-06, the authority funded science to support the management of the marine park through two major
programmes. It contributed $1.905 million in cash and about $420 000 in-kind to the Cooperative Research
Centre for the Great Barrier Reef World Heritage Area (CRC Reef). It undertook a $2 million marine
monitoring programme as part of the Reef Water Quality Protection Plan including monitoring the reef ’s
biophysical environment and social and economic attributes of adjacent coastal communities. The authority
also provided $80 000 to support four different Australian Research Council (ARC) Linkage grants.
Monitoring reef quality
One of the greatest threats to the iconic Great Barrier Reef is degraded water quality, but a Marine Monitoring
Programme is helping to ensure the reef is around for generations to come.
The near shore area of the World Heritage Area is under stress from human activity associated with coastal
developments and agricultural practices.
The Marine Monitoring Programme is led by the Great Barrier Reef Marine Park Authority as part of the
Reef Water Quality Protection Plan, a joint initiative of the Australian and Queensland Governments. It
is funded by the National Heritage Trust and delivered by a consortium of monitoring agencies including
the Australian Institute of Marine Science, the University of Queensland and the Queensland Department
of Primary Industries and Fisheries.
The programme uses world-class research to track the effectiveness of the Reef Water Quality Protection
Plan. Community involvement in water quality and seagrass monitoring is an extremely important part of
the programme. The partnership between environmental managers, scientists and the community, funded
and supported by the Australian Government, is essential to successfully dealing with degraded water quality.
Photo credits: GBRMPA
Chapter 2 - Initiatives for a dynamic national innovation system 37

The majority of research-related publications generated through Great Barrier Reef Marine Park Authority
funding are produced by other agencies. In 2005-06, however, the authority itself produced eight researchrelated
publications, including the First annual marine monitoring programme report September 2005 and Research needs
for protection and management of the Great Barrier Reef Marine Park 2005.
The authority maintains successful collaborations with many science organisations including the CRC Reef,
AIMS, James Cook University, the University of Queensland and the ARC Centre of Excellence in Coral Reef
Studies. In partnership with the CRC Reef, the authority has also developed successful research collaborations
with the fishing and tourism industries.
In 2005-06, the authority played a key role in developing the research programme for the new Marine and
Tropical Sciences Research Facility funded by the Department of the Environment and Heritage. It also has
partnerships with community and industry-based environmental monitoring programmes such as Eye on the
Reef, Bleach Watch, Reef Check, the Cap Reef programme (based in Yeppoon) and Seagrass Watch (an
initiative of the Queensland Department of Primary Industries and Fisheries).
More information about the Great Barrier Reef Marine Park Authority and its programmes and
activities can be found at: www.gbrmpa.gov.au
National Measurement Institute
The National Measurement Institute (NMI) is Australia’s national centre for measurement. It is responsible for
physical, chemical, biological and legal metrology and for developing and maintaining Australia’s national standards
of measurement traceable to the international system. NMI also disseminates measurement standards through
calibration services and chemical and biological reference materials. As part of its responsibility for Australia’s units
and standards of measurement, NMI represents Australia on international forums under the Metre Treaty and the
International Organisation for Legal Metrology.
NMI’s services include calibration at the highest level of accuracy, pattern approval of measuring instruments
and a broad range of chemical measurements to support industry and government. These include food composition
and safety, chemicals of concern to the environment, detection and analysis of illicit drugs and drugs used in sport.
NMI works with industry and government to develop new and more accurate measurements and to transfer
measurement technology to clients. NMI also provides training in metrology.
NMI’s budget is approximately $51 million of which about $24 million comprises revenue from services. In
2005-06, NMI:
• published 23 externally refereed papers and 58 other publications, and delivered 29 training courses for
participants from industries, including chemical, weighing, metering, electrical, electronics and power
generation, trade measurement and analytical services;
• installed NMI technology to provide the national telephone, or ‘speaking clock’ service, and direct time
feeds to users in the private and government sectors. The usefulness of these time services has been
significantly enhanced by the direct link to NMI and Australia’s official time standard;
• provided full sports drug-testing facilities to the Melbourne 2006 Commonwealth Games. The
laboratory operated a seven-day-a-week service for the period of the Games and delivered results of
high quality to authorities within the agreed timeframes;
• participated in 24 bilateral and multilateral international comparisons with outcomes of very high
accuracy. This demonstrates the quality of NMI’s metrology and ensures confidence in Australia’s
national measurement standards and the national measurement system; and
• developed several new measurement standards, including:
o a tension measurement system for materials testing and other applications (up to a force of 5.5
megaNewtons);
o a low pressure measurement to support barometric pressure measurements and environmental
monitoring;
38 Backing Australia’s Ability

o a laser power measurement facility up to 100 watts to support laser safety and industrial laser
applications; and
o a new standard for heat flux to support fire safety testing.
Plans for 2006-07 include developing improved standards for mains electricity power quality, developing new
chemical reference methods for industrial and environmental measurements, developing new reference
materials for illicit drugs and banned sports drug detection.
More information about NMI and its programmes and activities can be found at:
www.measurement.gov.au
Finding signature DNA
There are many DNA measurements where as few as 50 molecules of a signature DNA sequence –
unique to a particular disease or trait – must be detected in a ‘soup’ of many millions of DNA sequences. At
such low concen trations of the signature DNA, the preparation of standards using traditional methods leads
to significant errors.
To overcome these limitations, the National Measurement Institute, biotechnology
company BTF Pty Ltd, and Macquarie University, have developed a novel approach
to production of DNA reference materials.
A single molecule of the signature DNA sequence is stitched into the genome of
bacteria such as E. coli. Using a technique developed by BTF Pty Ltd, a defined
number of these modified bacteria are counted and dispensed into a small droplet
of special matrix solution.
The droplet is quickly freeze-dried into a small sphere called a Bioball. When
required, the BioBall is simply dissolved in the measurement solution to provide
a standard with a very precise number of molecules of the signature DNA.
Freeze-dried modified E. coli
or Bioball. Photo credits: NMI
Strengthening university and independent research sector R&D
National Competitive Grants Programme
The Australian Research Council (ARC) has established a range of competitive funding schemes for the support of
research and research training under the framework of the National Competitive Grants Programme (NCGP).
Through these schemes, the ARC aims to:
• encourage the conduct of high-quality research across a wide range of disciplines, particularly in areas
of national research priority;
• facilitate the development and strengthening of collaborative linkages within Australia’s innovation
system and with innovation systems internationally;
• provide high-quality research training and career opportunities for Australia’s best and most promising
researchers; and
• enable the acquisition and facilitation of access to world-class equipment and facilities.
The NCGP’s schemes support research in all major disciplines except clinical medicine and dentistry (these fields
are supported by the National Health and Medical Research Council (NHMRC)). The majority of funding
under the NCGP is allocated on the basis of a competitive peer review process.
Discovery Projects support excellent fundamental research undertaken by individual researchers or research
teams. There were 3742 proposals for funding commencing in 2006 of which 917 (24.5%) were successful.
Chapter 2 - Initiatives for a dynamic national innovation system 39

The successful proposals represent a funding commitment of $95.2 million in 2006 and $273.6 million over
the five years to 2010. In total, in 2006 about 2914 new and ongoing research projects were supported under
Discovery Projects.
Linkage Projects support collaborative research projects between higher education researchers and industry and
other partner organisations. Across the two selection rounds (announced in November 2005 and July 2006) for
funding commencing in 2006, the ARC supported 400 new collaborative research projects and awards worth
$114.2 million over the five years to 2010. This funding commitment will attract $175.2 million in matching
contributions in cash and in-kind from partner organisations. A total of 764 partner organisations from around
Australia will contribute to research under the new projects and awards that commenced in 2006. Linkage Projects
foster opportunities for postgraduate researchers to pursue internationally competitive research in collaboration
with industry and other partner organisations. In 2006, the ARC awarded 304 Australian Postgraduate Awards
(Industry), including 56 targeted to research in the field of information and communications technology. This
brought the number of new awards to 1930 over the five years 2002 to 2006. To establish collaborations at a more
senior level, 30 Australian Postdoctoral Fellowships (Industry) were awarded in 2006.
Linkage Infrastructure, Equipment and Facilities supports the collaborative development of large-scale research
infrastructure by universities and other research organisations. In the 2006 new funding round, the ARC received
168 proposals of which 83 were approved for funding. The funding commitment to these projects is $37.3
million – cash and in-kind contributions are also provided by partner organisations. In 2006, a total of 31 universities
and 57 other organisations were involved in the 83 proposals funded under the scheme.
Federation Fellowships were announced on 11 May 2006 by the Minister for Education, Science and Training.
Twenty-five new fellowships were awarded, five to expatriate Australians who will leave international organisations
to return home, and two to foreign nationals who will bring their experience and talent to Australia. Four
current fellowship holders received their second fellowship.
Research Centres supported by the ARC in 2006 include three co-funded national Centres of Excellence (the
Australian Centre for Plant Functional Genomics, the Australian Stem Cell Centre and National ICT Australia),
26 ARC Centres of Excellence and ARC Centres (including 15 established in 2003 and 11 established in 2005)
and nine Special Research Centres. Centres funded by the ARC (excluding the co-funded Centres of Excellence)
produced over 1500 journal articles and 57 patents during the year. Students enrolled within the centres included
328 honours students, 114 Masters students and 1191 PhD students.
Linkage International comprises three components – Awards, Fellowships and Internationally Coordinated
Initiatives (collaborations with overseas funding agencies to fund collaborative awards). In 2005-06, the ARC
signed a bilateral agreement with the United Kingdom Economic and Social Research Council. Under the agreement,
the ARC will contribute to joint funding of collaborative research projects in the social sciences and related fields.
Funding for areas of national research priority is provided through all of the NCGP’s schemes. In 2005-06,
the ARC and the NHMRC conducted selection rounds for two new joint funding initiatives – Thinking Systems
and Ageing Well, Ageing Productively.
On 24 July 2006, the Minister for Education, Science and Training and the Minister for Health and Ageing
jointly announced the outcomes of Thinking Systems. Funding of $10 million over five years will support three new
projects that will bring together research in neuroscience, artificial intelligence, robotics and computer science.
The outcomes of the Ageing Well, Ageing Productively initiative were jointly announced by the Minister for
Education, Science and Training and the Minister for Ageing on 5 July 2006. The $10 million initiative (which is
administered by the NHMRC) will fund six projects over five years, covering areas including personal, lifestyle
and social factors in healthy ageing, and influences on brain ageing.
More information about the ARC and its programmes and activities can be found at: www.arc.gov.au
40 Backing Australia’s Ability

Institutional Grants Scheme
The Institutional Grants Scheme (IGS) aims to maintain and strengthen Australia’s knowledge base and research
capabilities by developing an effective research and research training system in the higher education sector. It:
• supports the general fabric of the research and research training activities of higher education providers;
• allows higher education providers to manage their own research activities and set their own priorities;
• assists higher education providers to respond flexibly to their research environment in accordance with
their own strategies; and
• enhances support for areas of research strength.
The IGS gives funding certainty to universities, rewards high performing universities and protects others by
ensuring that no university will lose more than 5% of IGS funding from one year to the next. IGS funding rose
from $290.6 million in 2005 to $296.1 million in 2006.
More information about the research block grants, including the IGS, can be found at:
www.dest.gov.au/sectors/research_sector/programmes_funding/general_funding/rbgrants/
Research Infrastructure Block Grants Scheme
The Research Infrastructure Block Grants (RIBG) Scheme provides block grants, on a calendar year basis, to
eligible higher education providers. The Scheme aims to:
• enhance the development and maintenance of research infrastructure in higher education providers
for the support of high quality research in all disciplines;
• meet project-related infrastructure costs associated with Australian Competitive Grants;
• remedy deficiencies in current research infrastructure; and
• ensure that areas of recognised research potential in which higher education providers have taken steps
to initiate high quality research activity have access to the support necessary for development.
Through Backing Australia’s Ability – Building our Future through Science and Innovation, the Australian Government
provided an additional $554.5 million from 2006-07 to 2010-11.
RIBG funding rose from $183 million in 2005 to $199.9 million in 2006.
More information about the research block grants, including the RIBG Scheme, can be found at:
www.dest.gov.au/sectors/research_sector/programmes_funding/general_funding/rbgrants/
Health and Medical Research – Research Grants
The National Health and Medical Research Council (NHMRC) is Australia’s leading expert agency fostering
health and medical research. It aims to:
• raise the standard of individual and public health throughout Australia;
• foster the development of consistent health standards between the states and territories;
• foster medical training and public health research and training throughout Australia, including urgent
and emerging areas in need of development; and
• consider ethical issues relating to health.
The Australian Government allocated $437 million to the NHMRC for health and medical research in
2005-06. Major funding commitments were made through its research support schemes – Programme Grants
($91 million) and Project Grants ($185 million). New commitments were also made through a $6.5 million
Urgent Research – Pandemic Influenza scheme, $10 million for the Health Services Research programme and
$18 million for Special Facilities Enabling Grants. A further $14 million was committed to eight awards made
under a five-year Medical Bioinformatics, Genomics and Proteomics research programme. The NHMRC also
committed another $10 million, matched by the Australian Research Council, to jointly fund research that will
further the Australian Government’s National Research Priorities.
Chapter 2 - Initiatives for a dynamic national innovation system 41

In addition to the continued large investments made through the Programme Grants and Project Grants
schemes, the NHMRC will invest $5 million in A healthy start to life for all Australians research programme, as
well as programmes addressing dementia research in collaboration with the Department of Health and Ageing,
further enabling grants under the $10 million Model Biological Systems programme, and new awards to be
made under the Health Services Research programme ($20 million) and the Population Health Capacity
Building ($23 million) schemes.
In 2005-06, approximately 65% of all NHMRC research funding reflected the Australian Government’s
National Research Priorities. Of that, 90% (more than $261 million) covered the priority Promoting and
maintaining good health, for which the NHMRC is the lead agency.
During 2005-06, the NHMRC:
• launched two publications showcasing internationally recognised research projects and world class
research results, the majority of which demonstrated future potential commercial outcomes;
• increased funding for individual researchers by 21% through its people support awards (up from $77.2
million in 2004-05 to $93.4 million). This included funding for postgraduate and postdoctoral training,
early and mid-career development and senior researchers;
• developed health advice for the Australian community covering a broad range of topics and issues as
diverse as nutrient reference values, and a tool for small communities to develop drinking water
management plans;
• endorsed clinical practice guidelines developed by other organisations that met the high standards
required to gain NHMRC approval. Guidelines on diabetes, screening to prevent cervical cancer,
immunisation, stroke rehabilitation and recovery, and the diagnosis and management of lymphoma
were approved;
• completed community and stakeholder consultations on:
o the review of the National statement on ethical conduct in research involving humans;
o the 4th edition of the Staying healthy in childcare guidelines;
o Making decisions about tests and treatments—a guide to better communication between healthcare consumers
and healthcare professionals;
o Increasing cultural competency for engaging people from culturally and linguistically diverse communities to
improve health; and
o the Australian drinking water guidelines;
• reviewed the current national guidelines for ethical human research and field tested a companion
document to Values and ethics: ethical guidelines for conduct in Aboriginal and Torres Strait Islander
health research;
• undertook collaborations with the Australian Research Council and the Australian Vice Chancellors’
Committee on the reviews of the National statement on ethical conduct in research involving humans and the
Joint statement and guidelines on research practice;
• joined with the Primary Care Division of the Department of Health and Ageing to fund a $4 million
General Practice Clinical Research Programme;
• secured Australia’s membership of the international Human Frontier Science Programme with
Australian researchers being awarded programme funding of $1.4 million during the year;
• awarded 19 new proof-of-concept Development Grants ($4.1 million) and six new Industry Fellowships
($2.1 million) to develop a better understanding of commercialising research outcomes;
42 Backing Australia’s Ability

• confirmed that 12 start-up companies had been formed with 18 developments of therapeutic value, 21
patents licensed or assigned and 33 joint venture or commercial party interests in developing the
research findings; and
• oversaw nine licences issued by the NHMRC Embryo Research Licensing Committee allowing research
using excess assisted reproductive technology embryos and reviewed two new licence applications.
More information about the NHMRC can be found at: www.nhmrc.gov.au
Independent Research Institute Infrastructure Support Scheme
Backing Australia’s Ability – Building our Future through Science and Innovation included the provision of $200 million
over seven years to 2010-11 for the overhead infrastructure costs for independent medical research institutes.
The funding will assist independent medical research institutes that administer the National Health and
Medical Research Council (NHMRC) funding with overhead infrastructure costs, by providing up to 20 cents
for every dollar competitively provided for research by the NHMRC. This funding is consistent with that
already provided to universities through the Research Infrastructure Block Grants Scheme.
Funding of $17.5 million was awarded from the pool to 32 independent medical research institutes in
2005-06.
New hope in the fight against Osteoarthritis
The discovery of a link between arthritis and an enzyme has
given new hope to sufferers of the disease.
A team of researchers from the University of Melbourne and
Murdoch Children’s Research Institute have determined
the enzyme ADAMTS-5 may be the main cause of cartilage
degradation through the study of a mouse model.
The leader of the research team, Associate Professor
Amanda Fosang, is a National Health and Medical
Research Council (NHMRC) research fellow who has
received over $2.3 million in NHMRC funding since 1997
through various fellowships and research support awards.
In this recent development, Associate Professor Fosang
and her team have exploited gene-targeting technologies
to distinguish the involvement of ADAMTS-4 and
ADAMTS-5 enzymes in each of the initiation,
progression and repair phases of arthritis.
Associate Professor Amanda Fosang. Photo credits: NHMRC
They discovered that when the enzyme ADAMTS-5 is genetically switched off in mice, it could stop arthritis
developing. The same enzyme is found in humans with arthritis. The challenge now is to conduct further
studies to understand why the enzyme becomes active in arthritis patients and how this destructive
activation can be controlled or stopped.
Chapter 2 - Initiatives for a dynamic national innovation system 43

Enhancing industrial R&D
R&D Tax Concession
The R&D Tax Concession is the Australian Government’s principal mechanism to stimulate private sector
expenditure on R&D. It has three elements:
• 125% R&D Tax Concession – deductions of 125% of eligible expenditure incurred on eligible R&D
activities from assessable income.
• 175% Premium R&D Tax Concession – a higher level deduction for companies that have additional
R&D expenditure for eligible labour-related expenditure above the previous three-year average.
• R&D Tax Offset – assists small companies, especially those in tax loss, by providing an immediate
benefit from the 125% R&D Tax Concession and the 175% Premium R&D Tax Concession by
allowing them to cash out their benefit.
At 30 June 2006, a total of 5830 companies were registered for the 2004-05 income year, with reported R&D
expenditure totalling $7.79 billion, an increase in expenditure of 12.5% over 2003-04. The number of registrations
was a record, increasing by 3.5% over the previous year and an average of 12% a year over the previous five years.
A total of 67% of companies reported R&D expenditure of less than $500 000, comprising 10% of the total
reported R&D expenditure. Reported R&D activities valued greater than $10 million were undertaken by 2%
of registrants and represented 49% of total reported R&D expenditure.
Companies with a turnover of less than $5 million represented the largest single group of registrants (66%) for
the R&D Tax Concession, while companies with a turnover of more than $50 million represented 14% of
registrants.
Take up of the R&D Tax Offset and 175% Premium Tax Concession elements
At 30 June 2006, a total of 2465 companies had indicated the intention to claim the R&D Tax Offset for the 2004-05
income year (made up of 2165 companies intending to claim the offset at the 125% rate and 300 companies
intending to claim at the 175% premium rate).
At 30 June 2006, a total of 1152 companies had indicated the intention to claim the 175% Incremental (Premium)
R&D Tax Concession for 2004-05 (made up of 852 companies intending to claim the premium and 300
companies intending to claim the offset at the 175% premium rate).
Table 6: Number of firms using the R&D Tax Offset and 175% Premium Concession, 2001-02 to 2004-05
Income years R&D Tax Offset Numbers 175% Premium Numbers
2001-02 1637 595
2002-03 1983 770
2003-04 2371 923
2004-05 2465 1152
Note: the R&D Tax Offset data includes the R&D Tax Offset claimed at the 175% premium rate.
Data was collected from the R&D Tax Concession database as at 30 June 2006.
R&D Tax Offset claims with the Australian Taxation Office
In the year ended 30 June 2006, the Australian Taxation Office processed 2157 R&D Tax Offset claims, with
deductions totalling $883 million, giving rise to offset credits of $265 million.
More information about the R&D Tax Concession can be found at: www.industry.gov.au
44 Backing Australia’s Ability

Safe for packaging, safe for the environment
A Victorian company has developed a new automated pallet wrapping system with the help of the R&D Tax
Concession and the Commercial Ready programme.
Safetech, which designs and manufactures materials handling equipment, is supplied under an innovative
arrangement that allows customers to pay for what they use.
The benefits of the system, which uses a patented stretch tape, include maximum load stabilisation, up to
90% waste reduction, improved ventilation and recyclable tape.
The system is ideal for food perishables that require airflow during transport and the beverage industry where
cartons sweat inside from the heat of packaged product.
Assistance from the Commercial Ready Programme gave Safetech the financial capacity to employ more
engineers to work on the system, and the ability to deduct up to 125% of qualifying expenditure incurred
on research and development activities when lodging its corporate tax return. The company is now
entitled to an Incremental Tax Concession of up to 175%.
Safetech won a gold trophy in the 2001 Australian Packaging Awards for efficiencies in recycling. In late
2006, Safetech won three Victorian awards, including the Telstra Victorian Business of the Year title.
Safetech pallet wrapping system. Photo credits: DITR
Rural R&D Corporations and Companies
The 15 rural R&D Corporations and Companies (RDC’s) are a partnership between the Australian Government
and the agricultural, fisheries and forestry industries. The Australian Government matches industry expenditure
on R&D dollar-for-dollar up to a limit of 0.5% of each industry’s gross value of production. The objectives of
the R&D partnership between industry and the Australian Government are to expand Australia’s rural R&D
effort, improve industry efficiency and effectiveness by investing in high priority areas and enhance industry’s
global competitiveness through the more effective uptake of research results.
To fulfil their role and objectives, the RDC’s identify the needs and priorities of industry and the Australian
Government, commission research, develop outputs, and foster uptake and adoption. It is widely recognised
that effective adoption of R&D outputs is greatest when parties who will benefit are actively involved in the
project from an early stage.
The results derived from R&D investments, and the resulting adoption and implementation of findings, are wide
ranging across the production, value adding and marketing spectrum. A scan of the RDC’s reveals extensive
involvement in:
• developing new crop varieties and improving yields;
• managing disease and pests through prevention and control;
Chapter 2 - Initiatives for a dynamic national innovation system 45

• improving the management of natural resources, including water, soils and native vegetation;
• improving storage and transport management of crops from harvesting to processing;
• advancing quality testing and certification for export markets;
• finding new markets and product uses and responding to consumer preferences;
• improving the skills and qualifications of people at all levels of the industry; and
• developing a culture of continual improvement within industries.
A research paper by the Productivity Commission, Trends in Australian Agriculture (July 2005), found that adoption
of technological advances and innovation was a key driver in the productivity growth that has enabled farmers
to increase their output in the past 30 years and offset the declining terms of trade to maintain their global
competitiveness. Total agricultural output during the period 1974-75 to 2003-04 increased at an average rate of
2.4%, which was considerably stronger than most other industry sectors.
More information about the Rural R&D Corporations and Companies can be found at:
www.ruralrdc.com.au
Protecting cotton naturally
The cotton industry has reduced its use of insecticides by 85%
through biotechnology and integrated pest manage ment to control
leaf feeding caterpillars. The approach is providing benefits to the
cotton growers, local communities and the environment, and the
reduction in the use of applied insecticides has also removed
adventitious control of a suite of insect pests.
Photo credits: Cotton Research and Development Corporation
The Cotton R&D Corporation is protecting the gains made
through research to control caterpillars by developing methods to
control these other pests. The key is the accurate identification of
pests and predators that control them so that integrated pest
management systems that minimise insecticide use can be applied
in cotton crops.
Food Centres of Excellence
The Food Centres of Excellence programme is an Australian Government funded initiative under the National
Food Industry Strategy (NFIS). The programme is delivered by National Food Industry Strategy Ltd (NFIS Ltd)
under contract to the Department of Agriculture Fisheries and Forestry.
The programme will help establish Australia as an international centre of excellence in food industry innovation
by attracting and developing world-class people and capabilities in Australian food R&D centres. It aims to:
• lead commercialisation of R&D and achieve follow-through food industry investment and
employment;
• provide Australian based food processors with access to world-class R&D expertise;
• develop food industry R&D capability in areas of national priority;
• encourage further rationalisation of Australia’s food R&D infrastructure and lead the integration of
company R&D with centres of excellence to achieve the critical mass necessary to attract and support
world-class food science and technology capability; and
• promote food science and technology as a career of choice by developing a high profile career path through
links between centres of excellence and education organisations that deliver programmes in food
science and technology.
46 Backing Australia’s Ability

The programme is providing $11.9 million over the five years to June 2007.
Two centres of excellence have been established: the National Centre of Excellence in Functional Foods at the
University of Wollongong (NFIS contribution $5.5 million over five years) and the Australian Food Safety Centre
of Excellence at the University of Tasmania (NFIS contribution $4.5 million over five years). The National Centre
of Excellence in Functional Foods is leading the advancement of functional foods in Australia and overseas by:
• integrating activity related to diet and health in industry, scientific, regulatory and consumer domains;
• participating in standards development at the national and international levels for research that
substantiates the effects of functional foods;
• providing critical review of the development of a regulatory framework for functional foods through
responses to Food Standards Australia New Zealand (FSANZ) consultations and supplying useful regulatory
information and references to companies through the website, conferences and other industry events;
• providing access to knowledge on the science, market intelligence and regulatory environment relevant
to functional foods; and
• pooling the individual capabilities of its members.
The centre has conducted 20 company consultancies with a value of more than $400 000, including a project for
Uncle Toby’s to establish nutritional criteria for nutritious snacks. This resulted in a major report that has been
disseminated widely to the media and health professionals and the criteria have now been adopted by Uncle
Toby’s as the basis of new development guidelines for muesli bars and other nutritious snacks.
The Functional Foods Centre continues to develop a portfolio of underpinning science in two key areas:
Foods for Appetite Control and Foods for Healthy Ageing. Foods for Appetite Control aims to build the scientific evidence
for the effects of dietary protein on appetite and satiety to underpin opportunities for innovative food products
targeting weight management. Foods for Healthy Ageing focuses on oxidative stress as a function of ageing and
building the science base for foods delivering protective agents such as Selenium and other antioxidants in
promoting health.
More information can be found at:
National Food Industry Strategy Ltd – www.nfis.com.au
National Centre of Excellence in Functional Foods – www.nceff.com.au
Australian Food Safety Centre of Excellence – www.foodsafetycentre.com.au
Healthy export
There are about 5.4 million cases of food-borne illness in Australia each year and the chilling of meat carcasses
has been identified by the Australian Food Safety Centre of Excellence (AFSCOE) as a potential health hazard.
In 2004-05, AFSCOE conducted a study into E. coli growth when chilling meat carcasses. This involved
developing a laboratory-based model system that mimicked the temperature, water activity and water content
changes of beef during Australian commercial air chilling operations.
By studying the changes in E. coli populations exposed to the chilling regimes and evaluating whether combined
chilling and drying regimes reduce the pathogens, AFSCOE aimed to optimise product quality and safety.
In 2005-06, the study was accepted into the Revised Export (Meat and Meat Product) Control Orders 2005
as a refrigeration index. The recommendations are reported to have helped maintain Australia’s position
as the sixth largest exporter of unprocessed food in the world, bringing an estimated net direct benefit
of $85 million a year to the Australian meat industry.
Chapter 2 - Initiatives for a dynamic national innovation system 47

Food Innovation Grants Programme
As part of the National Food Industry Strategy (NFIS), the Food Innovation Grants (FIG) Programme fosters
innovation and increased industry investment in R&D in the Australian food industry. It provides competitive,
merit-based grants on a matching dollar-for-dollar basis for up to half the eligible project costs to Australian
food businesses. Projects funded involve R&D to resolve a scientific or technical challenge for the Australian food
industry and must have strong potential for product commercialisation.
The Australian Government initially allocated $34.7 million to FIG over the five years to June 2007. Another
$12 million was announced from 2005-06 to 2006-07. A further $3.43 million was redirected from other NFIS
programmes to FIG, providing total funding of $50.1 million.
In 2005-06 12 FIG projects were completed, contracts were finalised for 31 new FIG grants, payments to FIG
projects totalled $14.6 million and 55 projects were active at the end of the financial year. Six companies were
approved for grant funding under round 11 of FIG in early 2006-07.
A mid-term review undertaken in 2004 found that the programme had been performing strongly. Of the total
number of FIG recipients: 58% successfully commercialised new technology, 58% developed a new product,
68% reported benefits through improved linkages with the research community and 53% increased market share.
The results of an evaluation of the NFIS, including the FIG programme will be available in 2007.
More information about FIG can be found at: www.nfis.com.au
Innovation in the food industry
Twenty-three Australian companies were given a boost by the Food Innovation
Grants programme when the ninth and 10 th funding rounds were announced
in 2005-06.
The companies, including Masterfoods and Anchor foods, were selected after
a competitive, merits-based assessment. They shared in $11.4 million worth of
grants with the aim of encouraging innovation within the Australian food industry.
Since the beginning of the Food Innovation Grants programme in 2003,
79 grants of up to $1 million have been awarded across all states with a total
investment of $45 million. The programme has also helped stimulate approximately
$105 million worth of investment in research and development in Australia.
A Food Innovation Grant of around $300,000 helped Anchor Foods develop it’s range of specialty vinegars. Photo credits: DAFF
Upgrading research infrastructure
National Collaborative Research Infrastructure Strategy
The National Collaborative Research Infrastructure Strategy (NCRIS) aims to provide strategic direction for
Australian Government investment in major research facilities, supporting infrastructure and networks.
Funding of $542 million was committed for the period 2004-05 to 2010-11 to develop and implement the
strategy and to:
• ensure that Australian research contributes effectively to economic development, national security,
well-being and environmental sustainability;
• focus infrastructure investment in areas where Australia has the potential to be world-class and provide
international leadership;
• ensure Australia is a participant in cutting-edge, high-impact international research; and
• encourage and support national research collaboration that focuses strengths and resources on highvalue
research.
48 Backing Australia’s Ability

In August 2005, the Minister for Education, Science and Training, established an expert standing committee to
oversee the ongoing implementation, monitoring and review of NCRIS and appointed the NCRIS Committee,
chaired by Dr Michael Sargent.
In February 2006, the Minister for Education, Science and Training, the Hon Julie Bishop MP, announced the
release of the NCRIS Roadmap, which identified 16 capability areas in which Australia should aim to develop,
or further develop, research capability through significant infrastructure. The Minister subsequently approved
the NCRIS Investment Framework in April 2006, which outlines the process for developing investment plans
for the capabilities identified in the Roadmap. A single national, collaborative proposal (incorporating a business
plan) will be developed to address each priority capability.
The NCRIS Roadmap identified 10 areas for funding in 2006-07:
• evolving biomolecular platforms and informatics;
• integrated biological systems;
• characterisation;
• fabrication;
• biotechnology products;
• networked biosecurity framework;
• optical and radio astronomy;
• integrated marine observing system;
• structure and evolution of the Australian continent; and
• platforms for collaboration.
A further group of two high priority capabilities were identified (population health and clinical data linkage, and
terrestrial ecosystem research network) as requiring further scoping to take place within the research community
before it would be feasible to develop a full investment proposal. The scoping process for these capabilities has
begun and development of a full investment proposal is expected to commence in late 2006 or early in 2007.
The remaining four capabilities described in the roadmap will be reviewed for possible implementation in 2007.
In 2005-06, NCRIS funding was provided to the Australia Phenomics Facility ($1.3 million), the Australian
Proteomics Analysis Facility ($1 million), the National Neuroscience Facility ($0.975 million), the Australian
Computational Earth Systems Simulator ($0.76 million), the Bandwidth Foundry ($0.6 million) and the Australian
Genome Research Facility ($0.563 million).
More information about NCRIS can be found at:
www.dest.gov.au/sectors/research_sector/policies_issues_reviews/key_issues/ncris/
Major National Research Facilities Programme
The Australian Government’s Major National Research Facilities (MNRF) Programme supported the establishment
of research facilities in Australia and provided access to overseas facilities.
Under Backing Australia’s Ability, the MNRF Programme received funding of more than $150 million over five years
from 2001-02 to 2005-06. As a result, 15 facilities (selected through a competitive process) covering a range of
disciplines including genomics, proteomics, earth sciences, astronomy, wine, neuroscience and nano-technology
were funded.
The facilities in operation have generated research results and outputs, including publications, and have established
linkages with industry. The Australian Phenomics Facility, for example, reported the identification of the Roquin
gene (from the san roque mice strain developed at the facility) that affects the proper function of the autoimmune
system. Researchers are now investigating the relevance of this gene in human disease including Lupus and
Type 1 Diabetes. Many MNRFs have developed direct collaborations with industry to commercialise intellectual
property developed by independent users of the facility and to develop fee-for-service contracts to undertake
development of products for industry customers.
Chapter 2 - Initiatives for a dynamic national innovation system 49

Most facilities provide training programmes, supporting postgraduate students and researchers, and have
participated in promotional activities to increase awareness about the programme. The Australian Synchrotron
Research Programme has played a significant role in training many scientists, including more than 50 PhD students
as well as providing 17 fellowships to support early-career researchers.
With the help of independent scientific experts, the Department of Education, Science and Training has reviewed
the performance of each individual facility. Reviews of the final eight MNRFs were undertaken in 2005-06.
More information about the MNRF can be found at: www.dest.gov.au/sectors/research_sector/
programmes_funding/general_funding/research_infrastructure/mnrf/
Systemic Infrastructure Initiative
As part of Backing Australia’s Ability, funding of $246 million was provided over 2002 to 2006 to support projects
that strengthen infrastructure resources and high quality research and research training under the Systemic
Infrastructure Initiative (SII).
SII provides funding for innovative approaches which link or expand access to shared facilities or high priority
investments that will bring sector-wide strategic benefits. The initiative has also helped upgrade systemic infrastructure
and support world-class research and research training at Australian universities.
SII funds are directed to key areas including the provision of high-speed communications links and the facilitation
of discovery, access and dissemination of scholarly and scientific information. Funds are allocated on the
advice of the Australian Research and Education Network Advisory Committee (ARENAC) and the Australian
Research Information Infrastructure Committee (ARIIC).
Through the SII, the Australian Government has provided over $88 million for high-speed communications links
and access to broadband, bolstered by co-investment from universities, CSIRO, and state and territory governments.
This funding has enabled the establishment of the Australian Research and Education Network (AREN), one
of the largest and most advanced fibre optic research and education networks in the world. The resulting
communications capacity is facilitating a greater degree of research collaboration, providing greater access to
remote instruments, and enabling better quality and faster transmission of e-learning resources.
On the recommendation of ARIIC, the Australian Government has also provided over $52 million for 22 projects
to improve access to information, develop software solutions for storing and organising digital information in
institutional repositories, curate and preserve research data sets and information, and provide solutions that link
authorised users to research and information within and between institutions. These projects draw together
research communities without the need to build capital facilities, provide access to large amounts of research
data that were previously inaccessible, and provide access to information in areas of fundamental importance to
the community including medical and environmental research.
SII has provided $29 million to the Australian Partnership for Advanced Computing (APAC) from 2004 to 2006
to strengthen national advanced computing capabilities and to develop a national advanced computing and
grid infrastructure to serve the Australian research community. Part of this funding was used to install the new
supercomputing system of APAC’s national facility.
Most proposals involve significant levels of collaboration between universities and industry, usually with financial
support from the partners. The projects funded by SII are delivering benefits across the entire research sector.
To this end there is extensive collaboration being undertaken to ensure that the solutions and tools being
developed can be applied to a wide range of research environments and behaviours. These tools will allow researchers
to work more effectively, collaborate in new ways in secure virtual environments and allow Australian research
to perform at the highest level.
More information about the SII can be found at: www.dest.gov.au/highered/research/sys_research.htm
50 Backing Australia’s Ability

Establishing high bandwidth for education and research in metropolitan Adelaide
Linking research and education sites within Australian jurisdictions is a major focus in
building the Australian Research and Education Network.
In South Australia, the establishment of the South Australian Broadband Research and
Education Network (SABREnet) to link university campuses, teaching hospitals and research
institutions is well underway and scheduled for completion in December 2006. The
Australian Government has contributed $4.6 million from the Systemic Infrastructure
Initiative and $2 million from the Higher Education Capital Development Pool, which
funds infrastructure development for universities, to establish SABRENet. The South
Australian Government and universities have also made significant investments.
SABRENet forms part of the Australian Research Education Network and will be one of
Australia’s first and largest purpose-built customer-owned fibre networks. It will enable
very high-speed and cost-effective broadband for the research and education sector in the
Adelaide region. In the future, the capacity for individual researchers and students at Flinders
University, University of Adelaide, University of South Australia and other public sector
learning institutions to connect to each other and to other Australian and international
researchers and students through the Australian Research Education Network will be
increased up to four-fold the speed of high-speed home broadband.
Construction is underway to provide optical fibre connections between 27 primary sites
in the greater Adelaide metropolitan area. Construction is being conducted on public
land controlled by councils and public utilities, whose recognition of the SABRENet’s
public benefit has greatly facilitated land access.
Primary sites of SABRENet
Construction of SABRENet
Photo credits: Photos courtesy
of SABRENet Ltd.
Promoting the internationalisation of R&D
International Science Linkages
International Science Linkages (ISL) helps Australian researchers increase their participation in international
leading-edge scientific research as well as to leverage access to international research funds. It helps raise the profile
of Australian research and supports the development of strategic alliances between Australian and international
researchers and industry. The programme is increasing Australia’s capacity to attract overseas R&D investment,
promoting innovation and increasing the economic and social impact of Australian research.
The ISL programme consists of three components:
• Competitive Grants Funding;
o Competitive Grants;
o Australia-China Special Fund for S&T Cooperation;
o French-Australian Science and Technology Programme;
• Strategic Policy; and
• International Science and Technology Networks (ISTN).
New funding agreements (2006-07 to 2009-10) with the Australian Academy of Science and the Australian
Academy of Technological Sciences and Engineering have been finalised, and reflect changes that include
restructuring and re-branding of the ISTN component as the ISL – Science Academies Programme. This change
will enhance the visibility of the programme and the Australian Government’s funding support, but will not
affect the overall delivery.
Chapter 2 - Initiatives for a dynamic national innovation system 51

Total funding for the ISL programme amounts to $94.48 million over the nine financial years to 2010-11 including
the $1.5 million a year funding increase to the Australia-China Special Fund for S&T Cooperation as part of
the government’s 2006-07 Budget.
In 2005-06 the Competitive Grants component supported 18 projects to a value of $5 244 433 including 13
collaborative research projects, two conferences, one showcase and two strategic planning activities.
The Australia-China Special Fund for S&T Cooperation (Australia-China Fund) supported nine projects to a value
of $495 699.
The French-Australian Science and Technology Programme supported 13 projects to a value of $273 810.
The Strategic Policy component supported 33 projects to a value of $1 103 085. These consisted of 14 bilateral
workshops/symposia, 11 multilateral workshops/symposia, two memberships of multilateral science and
technology projects, one bilateral joint science and technology committee meeting and five other international
science and technology activities.
The ISTN component supported 190 projects to a value of $2 120 000 including travel for 59 scientists to Asia,
North America and Europe, seven international missions and workshops, 18 visits by scientists to high energy
physics facilities, 102 proposals approved for scientists to access major international facilities and four
international conferences.
More information about ISL can be found at: www.dest.gov.au/science/isl
Australia-India Strategic Research Fund
The Australia-India Strategic Research Fund (AISRF) is a component of the Australian Government’s
$1.4 billion Australian Scholarships for the Asia-Pacific Region package. AISRF facilitates and supports science
and technology research cooperation between Australia and India, and:
• assists Australian researchers to increase their participation in leading-edge scientific research with
Indian scientists;
• raises the profile of Australian research; and
• supports the development of strategic alliances between Australian and Indian researchers.
From 2006-07, the Australian Government will provide $20 million over five years for AISRF to facilitate and
support research cooperation in science and technology between Australia and India.
Funding will be delivered through three main components: the Indo-Australian Science and Technology Fund;
the Indo-Australian Biotechnology Fund; and targeted allocations.
More information about AISRF can be found at: www.dest.gov.au/science/aisrf
Australian Centre for International Agricultural Research
The Australian Centre for International Agricultural Research (ACIAR) is a statutory authority that operates within
the Foreign Affairs and Trade portfolio. The centre’s activities are funded as part of Australia’s aid programme
and aim to help developing countries reduce poverty and achieve sustainable development in line with Australia’s
national interest.
ACIAR was established in 1982 to assist and encourage agricultural scientists in Australia to use their skills for the
benefit of developing countries while at the same time working to solve Australia’s own agricultural problems.
ACIAR has a unique position as a funder of R&D in that it contributes to Australia’s innovation system while
also being an integral part of the development assistance program. Projects are supported in five regions: Papua
New Guinea and South Pacific, Southeast Asia, South Asia, North Asia and Southern Africa.
52 Backing Australia’s Ability

Pakistan Farmers with wide raised beds.
Photo credits: ACIAR
Water management in China.
Photo credits: ACIAR
ACIAR commissions research groups and institutions including universities, CSIRO and state agricultural departments
of primary industry, private consultants and non-government agencies to carry out agricultural research projects
in partnership with their counterparts in developing countries. Key activities include:
• commissioning research into improving sustainable agricultural production in developing countries;
• funding project-related training (postgraduate and short training courses);
• communicating the results of research;
• conducting and funding development activities related to research programmes; and
• administering the Australian Government’s contribution to the International Agricultural Research Centres.
Future directions will emphasise:
• a greater focus on the achievement of community impacts;
• continued alignment with stakeholder priorities including national research priorities;
• investments focused in areas with a high probability of achieving sustainable development;
• enhanced accountability and transparency around the project investment portfolio; and
• active participation in the whole-of-government agenda.
During 2005-06 ACIAR invested in 297 international research partnerships. Australian benefits extend to crop and
livestock sciences, capture and culture fisheries, forestry, land and water resources and post harvest technology.
ACIAR is also involved with economic and policy research in a multidisciplinary approach to achieve the
adoption of improved technologies, practices, policies and systems.
In 2005-06 funding of $1.54 million was expended on John Allwright Fellowships for postgraduate studies in
Australian universities, with 57 active fellowships in relevant subjects covering 14 partner countries. These courses
are supplemented with other awards for skills development in areas such as research management and
extension and research project design. ACIAR also communicates the results of the research it funds to a wide
range of audiences though a suite of scientific publications and various targeted communications activities.
Chapter 2 - Initiatives for a dynamic national innovation system 53

Improving research quality and accessibility
Research Quality Framework
The Research Quality Framework (RQF) initiative was first announced by the Prime Minister in May 2004 as part
of Backing Australia’s Ability – Building our Future through Science and Innovation.
The Australian Government is committed to developing and introducing a RQF to measure, by expert peer review,
the quality and impact of research in universities.
The aim of the RQF is to develop the basis for an improved assessment of the quality and impact of publicly
funded research. It will be transparent to government and taxpayers so that they are better informed about the
results of the public investment in research and ensure that all publicly funded research agencies and research
providers are encouraged to focus on the quality and relevance of their research.
In 2005-06, the Research Quality Assessment Framework team provided high-level secretariat and administrative
support to the RQF Expert Advisory Group including the establishment of, and administration for, four technical
working groups in the areas of eligibility and quality criteria, assessment panels, research impact, and RQF
funding issues.
Support was also provided to the Expert Advisory Group on the release of Research Quality Framework – the
preferred model and Research Quality Framework – fi nal advice.
The team has provided high-level secretariat and administrative support to the RQF Development Advisory
Group (announced 28 March 2006) which held four meetings between June and September 2006, and to the
four technical working groups (Quality Metrics, Research Impact, Information Technology, and Exploratory
Modelling) established by the Development Advisory Group.
In December 2006 the Minister for Education, Science and Training announced financial support for the
implementation of the first cycle of the Research Quality Framework which will be provided over three years,
commencing in 2007-08, and includes:
• $16.4 million – Implementation Assistance Programme – to assist universities in meeting the costs of
implementing the new requirements for data gathering; and
• $25.5 million – Australian Scheme for Higher Education Repositories programme – to assist with the
establishment of university digital data storage systems that will allow research outputs to be submitted
for RQF assessment. This programme builds on the Australian Government’s $35 million investment
in the research and development of data repository technology, funded as part of Backing Australia’s
Ability, and will support the Research Accessibility Framework.
An additional $3 million in Australian Government funding was also secured for 2006-07 for continued
development of the RQF.
More information about the RQF can be found at: www.dest.gov.au/research/rqf
54 Backing Australia’s Ability

Research Accessibility Framework
On 1 May 2004, the Prime Minister announced that the Australian Government would establish an accessibility
framework for publicly funded research as part of Backing Australia’s Ability – Building our Future through Science
and Innovation.
The accessibility framework is intended to provide a strategic framework to improve access to research
information, outputs and infrastructure. It will be an agreed system-wide approach for managing research
outputs and infrastructure so that they are discoverable, accessible and shareable, and so the quality of research
outcomes can be improved, duplication reduced and research activities and reporting better managed.
The Australian Government is keen to ensure that, through the establishment and linkage of electronic digital
repositories, national scholarly output and research data derived from Australian Government funding will be
available to researchers and the wider community, subject to safeguards for privacy and protection of
confidential and commercially sensitive information.
The framework will embrace a range of e-research environments that are emerging from the changing innovative
practices of scientists and scholars in all disciplines. It will be largely based on existing investments in research
infrastructure, which are laying the foundations for e-research in which advanced computational, collaborative
data acquisition and management services are available to researchers through high-performance networks.
More information about the accessibility framework can be found at: www.dest.gov.au/sectors/
research_sector/policies_issues_reviews/key_issues/accessibility_framework/
Chapter 2 - Initiatives for a dynamic national innovation system 55

PART 2 – Accelerating the commercial application of ideas
The potential returns from improvements to Australia’s capacity to generate new knowledge will not be fully
realised without mechanisms that support its rapid uptake and application. Commercialisation is one of the
many mechanisms through which research can be productively applied and an important pathway through
which its positive benefits accrue to the broader economy.
Funding under the Backing Australia’s Ability initiative provides significant targeted support for the
commercialisation of Australian research and technologies. This support recognises a need to better position
businesses and research institutions to exploit ideas and effectively and efficiently transform them into
marketable products, processes and services. Key areas of focus include addressing barriers to commercialisation
(such as accessing capital) and developing the collaborative linkages that maintain a dynamic flow of knowledge
and skills between businesses and the public research sector.
Support through the Backing Australia’s Ability initiative is part of the Australian Government’s broader
commitment to ensuring that Australia remains well placed to exploit the full potential of the knowledge it
generates. This section identifies some key indicators of Australia’s performance against this goal, and
highlights relevant activities of Australian Government departments and agencies over 2005-06.
Performance highlights
• In 2004 universities and publicly funded research organisations in Australia negotiated research
contracts and consultancies to the value of $899 million and their income from licenses, options and
assignments amounted to $59 million.
• The total number of start-up companies formed by universities and publicly funded research agencies
operational at the end of 2004 reached 255, having tripled since the end of 2000. The value of equity
holdings increased by 41% in real terms over the same period.
• In Australia, the number of triadic patent families has experienced a general upward trend, rising from
156 in 1985 to 431 in 2003. Australia’s share in world triadic patent families reached an all time high of
0.82% in 2003, following a steady rise since 1996.
• During the two calendar years prior to December 2005, innovating businesses in Australia represented
33.5% of all businesses. This is an increase of 3.9 percentage points from the 29.6% recorded for the
two years preceding December 2003.
• Total expenditure on innovation by innovating businesses in the financial year 2004-05 was $30.6
billion, an increase of 40%, or $8.7 billion, from 2002-03. As a proportion of their total business
expenditure, this corresponded to and increase from 2.9% to 3.7% over the same period.
• Australia’s economic competitiveness was ranked 19 th in the world in 2006 according to the Global
Competitiveness Index.
56 Backing Australia’s Ability

Providing capital for commercialisation
Venture Capital Review
The review of Australia’s venture capital industry, announced by the Minister for Industry, Tourism and
Resources in May 2005, was undertaken by an expert group. A report was provided to the Australian Government
in December 2005, and following consideration, the Australian Government announced in its 2006-07 Budget:
• the introduction of a new investment vehicle, an Early Stage Venture Capital Limited Partnership
(ESVCLP), to progressively replace the Pooled Development Fund Programme. This mechanism will
provide flow-through tax treatment to domestic and foreign partners with the income, both revenue
and capital, received being exempt from taxation. As the income will be exempt from tax, the investor
will not be able to deduct investment losses;
• to qualify for the tax exemption: the ESVCLP fund size cannot exceed $100 million; an individual investment
in any one company cannot exceed 30 per cent of the ESVCLP's committed capital; the total assets of
the investee company cannot exceed $50 million prior to the investment; the ESVCLP must divest its
assets in the investee company once the total assets of the investee company exceed $250 million; and,
the ESVCLP must meet certain regulatory and reporting requirements;
• enhancements to the existing Venture Capital Limited Partnership regime (see below); and
• a third round of the Innovation Investment Fund programme. Ten new funds are to be established over
five years. Australian Government funding of $40 million a year will be identified for the two funds
established each year with a lifetime of 10 years. The funds will have at least 50% of funding from the
private sector and the profit split will be 90:10 in favour of the private investor. The programme will look
to building new fund managers in the early stage venture capital area.
Venture Capital Regime
The Venture Capital (VC) Regime facilitates non-resident investment in the Australian venture capital industry by
providing incentives for increased investment that will support patient equity capital investments in relatively high
risk start-up and expanding businesses that would otherwise have difficulty in attracting investment through
the normal commercial means.
The VC Regime includes the provision of flow-through taxation treatment for registered venture capital
limited partnerships (VCLPs) and Australian Venture Capital Fund of Funds. It also provides a tax exemption
on profits from the disposal of interests in eligible venture capital investments to non-resident limited partners
(eligible investors) who satisfy certain requirements as specified in the relevant legislation.
Broadly, eligible venture capital investments can be made into entities that are Australian resident companies,
where the total value of the entity’s assets is not more than $250 million and where the predominant activity
is not property development or land ownership, finance, insurance, construction or acquisition of infrastructure
facilities, or direct or indirect investments to earn interest, rent, dividends, royalties or lease payments.
During 2005-06 six funds registered as VCLPs and VCLPs reported around $148 million invested into
21 Australian businesses. At 30 June 2006, there were a total of 13 fully registered VCLPs and one conditionally
registered VCLP. There were no funds registered as Australian Venture Capital Fund of Funds.
In response to the review of the Australian venture capital industry, the Australian Government announced a
number of proposed changes to the operations of VCLPs in the 2006-07 Budget, including:
• removing the country of residence restrictions for investors in VCLPs;
• reducing the minimum partnership capital required for registration from $20 million to $10 million;
• allowing VCLPs to make investments in unit trusts, as well as companies, and allowing investment by way
of convertible notes, as well as shares and options, to be equity interests in investee businesses;
• relaxing the requirement that the investee businesses must have at least 50% of assets and employees located
in Australia for 12 months after the investment; and
• allowing the appointment of auditors for investee businesses to occur no later than the end of the
financial year in which the investment is made.
More information about the VC Regime can be found at: www.ausindustry.gov.au
Chapter 2 - Initiatives for a dynamic national innovation system 57

Pooled Development Funds
The Pooled Development Funds (PDF) programme aims to increase the supply of patient equity capital, including
venture capital, for Australian small to medium-sized enterprises. Under the programme, private sector investment
companies are registered as PDFs.
The programme provides both PDFs and their shareholders with concessional tax treatment on returns from
eligible investments.
Broadly, PDF companies can invest in Australian businesses with total assets of not more than $50 million. PDF
investments are generally by way of purchasing newly issued shares in the investee companies, which are raising
money to either establish or substantially expand their businesses. Property development and retail sales
operations are the only excluded activities.
During 2005-06 13 companies registered as PDFs and PDFs reported over $46 million invested into Australian
businesses. At 30 June 2006, there were a total of 101 companies registered as PDFs.
A comprehensive review by an expert group of the Australian venture capital industry was completed and
provided to the Australian Government in December 2005 (see section on the Venture Capital Review).
In response to the review of the Australian venture capital industry, the Australian Government announced in
the 2006-07 Budget that the PDF programme would be closed to new registrations after 31 December 2006. PDFs
registered at this time will be able to continue under the existing arrangements.
More information about PDF can be found at: www.ausindustry.gov.au
Innovation Investment Fund
The Innovation Investment Fund (IIF) Programme is designed to promote the commercialisation of Australian
R&D by providing venture capital to high-tech companies at the seed, start-up or early expansion stages of their
development.
The Australian Government has contributed approximately $221 million for the first two rounds of the IIF, which
is matched by private sector investment up to a 2:1 basis, resulting in $358 million being available to support the
commercialisation of early stage R&D. Nine licensed fund managers currently administer the pool of investment
capital and make all investment decisions relating to their funds.
In 2005-06, $17.4 million was invested in 18 investee companies (not including co-investments) of which
$10.47 million was provided by the Australian Government. Five of the 18 companies were new investments.
Since the programme’s inception, the nine funds have invested in 77 individual companies in the bioscience (18),
business systems (three), communications (10), engineering (six), health (six), IT (25), materials technology (one),
medical devices (two), mining (five) and transport (one) sectors.
In 2005-06, the Australian Government received returns of $5.19 million. As at 30 June 2006, the total returns
were $286.2 million of which the Australian Government had received $64.56 million. This was from the full
sale of five companies, the partial sale of three companies, the sale of residual value of four companies, and
dividends and loan repayments from five companies.
In the 2006-07 Budget, the Australian Government committed $200 million in capital for a third round of
10-year funding for the IIF. This third round will involve appointing up to two new managers each year over
five consecutive years, with $40 million a year in funding available for successful fund managers. The
programme will result in 10 new funds being introduced to the market. Government funding will be matched
at least dollar-for-dollar with private sector funds. It is expected three new fund managers (under the first
round) will be appointed in 2006-07 and become operational in 2007-08.
More information about the IIF can be found at: www.ausindustry.gov.au
58 Backing Australia’s Ability

G2 Therapies – Biotechnology business
A biotechnology company developing and commercialising therapies in inflammation and cancer obtained
support through the Innovation Investment Fund Programme.
G2 Therapies is based at the Garvan Institute of Medical Research, which is one of the largest medical
research institutes in Australia. Its experienced team of scientists has demonstrated capabilities in target
discovery and validation, and antibody discovery and preclinical development.
In February 2006, its subsidiary, G2 Inflammation, signed a $138 million global research, development
and licensing agreement with healthcare company Novo Nordisk A/S.
G2 Therapies is utilising the skills and expertise of ANWIN Management Pty Ltd, a licensed fund
manager under the Innovation Investment Fund Programme. The AMWIN investment will assist G2
Therapies to promote its leading-edge capabilities in target discovery and validation, as well as antibody
discovery and the development of novel antibody based therapeutics.
Renewable Energy Equity Fund
The Renewable Energy Equity Fund (REEF) is a specialist renewable energy fund modelled on the existing
Innovation Investment Fund programme. Its objectives are to encourage development of companies and
other incorporated bodies that are commercialising R&D in renewable energy technologies and develop fund
managers with relevant industry experience.
The programme was developed jointly by the Australian Greenhouse Office and AusIndustry, which delivers
the programme on behalf of the Department of the Environment and Heritage.
Australian Government funding of $17.7 million is being provided, with approximately $26.6 million of total
capital available to the fund (when matched by private sector capital). REEF is managed under licence
agreement by CVC REEF Investment Managers Ltd.
At 30 June 2006, REEF had invested $18.8 million of Australian Government and private capital in 12
companies. Technology developments currently being supported include wind generation, long-life batteries
for use in remote and arid areas, biofuels and bio-energy.
More information about REEF can be found at: www.ausindustry.gov.au; and
www.greenhouse.gov.au/renewable/reef/index.html
Pre-Seed Fund
The Pre-Seed Fund (PSF) targets commercially promising R&D opportunities at the pre-seed stage from Australian
universities, CRCs and public sector research agencies.
It helps commercialise public sector R&D activities by further developing the management and entrepreneurial
skills of public sector researchers and building linkages with the finance and business community. This is being
achieved by establishing licensed venture capital funds managed by expert private sector funds managers in which
the Australian Government and private sector investors invest. A licence under the PSF programme operates
for 10 years.
The fund has a total of $104.1 million to support projects or companies spinning out from public sector research.
The Australian Government has provided $72.7 million of this capital, with the balance provided by private
sector investors, universities and public sector research agencies.
By November 2002, four venture capital funds were operational following a selection process by the Industry
Research and Development Board. The funds are managed by venture capitalists experienced in research
commercialisation and the development of sustainable businesses.
Chapter 2 - Initiatives for a dynamic national innovation system 59

In 2005–06, $12.83 million was invested in 36 companies and projects (the Australian Government provided
$8.97 million). Of these ventures, 22 were new investments.
From the programme’s inception to 30 June 2006, investments totalling $25.88 million were made into 46 investee
companies and projects in the following sectors: agriculture (one), chemical engineering (one), horticulture
(one), Information Technology (five), communications (seven), life sciences (23), manufacturing (seven) and
medical devices (one). The Australian Government’s contribution was $18.06 million. At least seven products
have been taken to market and one company has been divested.
More information about the Pre-Seed Fund can be found at: www.ausindustry.gov.au
Starfish Pre-Seed Fund – Ceram Polymerik
A new generation of passive fire protection is being developed and commercialised by a Melbourne-based
early stage materials company Ceram Polymerik, a spin-out company from the Cooperative Research Centre
for Polymers.
Researchers at the Cooperative Research Centre developed a novel polymer ceramic composite that behaves
like a polymer under normal processing conditions but turns into a hard dense ceramic when exposed to
heat and fire. This technology has applications in the passive fire protection market.
Passive fire protection refers to products in buildings, structures or transport vehicles that enhance fire resistance.
The aim is to counteract the movement of heat and smoke between floors, rooms or compartments by
sealing penetrations, prolonging stability or creating barriers to the passage of fire, heat or smoke. Ceram Polymerik
is working on a range of polymer composites for use as fire barriers in passive fire protection applications.
With the help of the Starfish Pre-Seed Fund, which first invested in the company in September 2004, Ceram
Polymerik is working to complete manufacturing scale-up for its initial product formulations and to
engage with its two leading customers.
Ceram Polymerik Photo credits: DITR
60 Backing Australia’s Ability

Assisting research to investment ready stage
Commercial Ready
The Commercial Ready programme was announced on 6 May 2004 by the Prime Minister as part of Backing
Australia’s Ability – Building our Future through Science and Innovation.
The programme will provide over $1 billion of funding until 2010-11 (at a rate of approximately $200 million a
year) via competitive grants to small to medium-sized enterprises to support eligible project activities.
Commercial Ready aims to encourage the growth and successful innovation of Australian companies by
increasing the level of research and development, proof-of-concept and early-stage commercialisation by
Australian businesses. Other aims include:
• increasing the international competitiveness of Australian businesses;
• fostering greater collaboration between industry, and industry and research institutions; and
• generating national benefit for the Australian economy.
Commercial Ready is expected to assist around 1700 small to medium-sized enterprises through to 2011. Successful
applicants receive 50% of eligible expenditure for undertaking eligible activities.
It replaces and integrates elements of the previous programmes – the R&D Start Programme, the Biotechnology
Innovation Fund and the Innovation Access Programme.
In 2005-06, Commercial Ready had considered 247 applications. Of those, 165 were approved, totalling
$182.96 million in grant funding. The average grant size was $1.11 million and the median grant size was $0.72
million. Table 7 sets out the size distribution of grants, table 8 the main purposes for which grants were
awarded and table 9 the sectoral distribution of grants.
Table 7: Size distribution of Commercial Ready grants, 2005-06
Size of values Value
Up to $250k $9 692 900
>$250k and $500k and $1m and

Table 9: Sectoral distribution of Commercial Ready grants, 2005-06
Code
Sector
Applications
approved (no.)
Applications
approved ($M) %
A Agriculture, forestry and fishing 10 $13.48 7%
B Mining 4 $6.54 4%
C Manufacturing 76 $91.09 50%
D Electricity, gas and water supply 2 $2.40 1%
E Construction 2 $2.26 1%
F Wholesale trade 1 $0.22 0%
I Transport and storage 2 $0.67 1%
J Communication services 5 $4.07 2%
K Finance and insurance 3 $6.20 3%
L Property and business services 46 $41.28 23%
O Health and community services 12 $13.53 7%
P Cultural and recreational services 1 $0.45 0%
Q Personal and other services 1 $0.79 1%
Total 165 $182.96 100%
More information about the Commercial Ready Scheme can be found at: www.industry.gov.au
Commercialising Emerging Technologies Programme
The Commercialising Emerging Technologies (COMET) Programme helps commercialise innovative products,
processes and services by providing individuals, early-growth stage companies and spin-off companies with tailored
support. It is a competitive programme that provides financial assistance and access to business services in the
areas of strategic management, business planning, market research, intellectual property management, and proving
a technology (including a working prototype).
A key objective of COMET is to encourage knowledge creation and transfer to increase the enterprise’s capacity
for achieving innovation and commercialisation outcomes. A major aspect of COMET assistance is access to
a business adviser to help customers with a tailored business assistance plan.
COMET can also help individuals and companies increase human capacity building in areas such as management,
finance, marketing and sales.
A $100 million extension of COMET was announced under Backing Australia’s Ability – Building our Future
through Science and Innovation to fund the programme until 2010-11.
In 2005-06, COMET had 172 new applications approved, assisted 53 enterprises with 80 capital raising outcomes
with a value of $56 million, and launched 20 manufacturing or new products and services. Thirty COMET
customers were from regional or outer metropolitan areas and 26 customers commercialised university/public
sector research sourced innovations. For 2006-07 around 170 new customers will be supported.
In 2005-06, 14 COMET customers successfully formed 19 strategic alliances or joint ventures, four entered into
licensing agreements and 28 into some other form of distribution or other agreement to commercialise innovations.
Since the inception of the programme in 1999, COMET has resulted in over 700 strategic alliances, joint ventures,
licensing and other collaborative outcomes.
62 Backing Australia’s Ability

BottleCycler: efficient and quiet glass recycling
Bars and restaurants can safely and quietly crush
empty glass bottles on site using a recycling device
called BottleCycler.
Photo credits: DITR
BottleCycler was developed from a Dutch prototype
adapted to the requirements of the Australian hosp -
itality industry. The device reduces the volume of
empty bottles by 80%, which also provides storage and
occupational health and safety solutions.
BottleCycler is compact and can be positioned behind a bar or in other convenient
places. The 60-litre device can hold 350 crushed glass bottles. The device is much safer
because staff no longer need to carry, sort and dispose of glass bottles, reducing
injuries from broken glass and from lifting.
The BottleCycler company was formed in 2002. A consultant referred the company
to the Commercialising Emerging Technologies programme and after a successful
application, it received a grant. The company was assigned a Commercialising
Emerging Technologies business advisor to help raise capital and provide general
business advice.
During the past two years BottleCycler has been sold to more than 160 restaurants,
bars and clubs in Sydney and Melbourne. The device won the best new hospitality
product award at the Sydney Fine Food Hotel Show in 2003-04 and was also
featured on the ABC television programme The New Inventors.
A recently published report looking at the sources of capital raised by COMET customers, Commercialising
Emerging Technology (COMET) Programme – Sources of Investment Study, found that:
• over 18 months (July 2004 to December 2005), 77 past and present COMET customers sourced
investments worth approximately $90 million;
• 65% of companies’ sourced investment from business angels valued at just under $30 million;
• three companies were listed on the stock exchange, valued at $30 million; and
• the remainder of investments were other equity sources, such as venture capital and corporate investments,
debt finance and other investments such as sale of IP and the acquisition of companies by ASX-listed
companies.
More information about COMET can be found at: www.ausindustry.gov.au
Chapter 2 - Initiatives for a dynamic national innovation system 63

Building on ICT strengths
Advanced Networks Programme
The $60 million Advanced Networks Programme (ANP) helps develop advanced network infrastructure in
Australia such as the national advanced backbone network and 3G (Third Generation) mobile telephone
development. The programme helps develop, trial and demonstrate advanced communications networks,
experimental networks and test beds.
Three projects are funded under ANP. Centre for Network Technologies for the Information Economy
(CeNTIE) and GrangeNet provide very high capacity (up to 10 gigabits a second) networks linking Perth,
Melbourne, Canberra, Sydney and Brisbane. These networks enable research into, and commercialisation of,
network technologies and emerging high-speed broadband applications. m.Net is an advanced wireless
network, which enables research into, and development and commercialisation of, wireless network
technologies, applications and content.
Under these projects, a number of advanced networking applications and technologies have been patented.
In 2006, CeNTIE entered an agreement with Telstra to licence its Virtual Critical Care Unit as a managed
service for use in hospitals across Australia. CeNTIE and the Melbourne University also have an agreement
with Medic Vision to license the Haptic workbench technology (a networked technology that simulates feel)
to train surgeons in temporal bone drilling.
GrangeNet has provided the Australian research community with access to a gigabit optical network, which
enables a framework for the development of grid services, the opportunity to test-drive high speed networks
and the incentive to explore novel techniques and forge new collaborations. GrangeNet is supporting research
projects in instrument grid and tele-science, computational grids, access grid, data grid, collaborative working
and grid middleware/security.
The implementation of 3G mobile telephone services by commercial carriers following m.Net’s pioneering of the
technology in Australia is also a major achievement. Examples of content development supported by m.Net include
mini-series and short films in multi-episode format designed for delivery to advanced mobile telephones.
ANP projects have also generated national and international collaborative projects with industry, public funded
agencies, universities and research centres, resulting in new applications for a range of business sectors including
health, finance, sport and the post-production film industry, as well as academic research.
The ANP will undergo an independent evaluation conducted after the programme is completed at the end of 2006-07.
Virtual surgery
A trainee surgeon can soon be guided through a simulated temporal bone drilling operation by a surgeon on
the other side of the country thanks to a virtual surgical training environment.
The virtual surgical training environment was developed by Melbourne University and the Centre for Network
Technologies for the Information Economy (CeNTIE), which is jointly funded by the CSIRO Information
Communication Technology Centre and the Department of Communications, Information Technology
and the Arts. The virtual environment uses Haptic Workbench technology to simulate the feel of the operation.
Temporal bone surgery is most common when the ear becomes diseased or a cochlear implant is required.
This involves drilling through the portion of the skull that houses delicate internal infrastructure, which means
surgeons must rely on knowledge and skill to know where to drill.
The virtual environment will allow trainee surgeons to develop their knowledge and skill before practicing
on cadavers or operating on real patients. It also means experienced surgeons can practice rarely performed
procedures or learn new techniques.
Melbourne University and CeNTIE have entered into an agreement with Medic Vision to licence the technology.
This will enable the production of a commercial virtual surgical training environment.
64 Backing Australia’s Ability

More information about the ANP can be found at: www.dcita.gov.au/ict/advanced_networks_program
Intelligent Island Programme
The $40 million Intelligent Island Programme is helping to develop an internationally competitive information
and communications technology (ICT) sector in Tasmania. The programme is funded by the Australian Government
from the second part-sale of Telstra and is administered by the Tasmanian Department of Economic Development.
In December 2005, the Australian and Tasmanian governments jointly announced a new direction for the
programme. Intelligent Island will support the establishment of an ICT centre in Tasmania by CSIRO. In addition,
up to $18 million of Intelligent Island Programme funds are now being allocated to a new Market Access and
Partnership Programme (MAPP).
The CSIRO Tasmanian ICT Centre will conduct applied ICT research in the areas of sensor networks, data
management and robotics. Funding for the Centre will be made up of $15 million from the Intelligent Island
Programme with a further $15 million in cash and in-kind contributions provided by CSIRO.
MAPP will provide funding support on a competitive basis to Tasmanian ICT companies to develop and commercialise
their products for interstate and overseas markets. It will support activities such as product development,
access to external markets and management and business skill acquisition. A percentage of MAPP funds (capped
at 10%) will be allocated to activities deemed to be of benefit to the Tasmanian ICT industry. On 24 May 2006,
the Australian and Tasmanian governments launched MAPP and invited expressions of interest for funding.
More information about the Intelligent Island Programme can be found at:
www.development.tas.gov.au/intelligent/index.html
ICT Incubators Programme
The ICT Incubators Programme (ICTIP) is a $36 million programme designed to support better-performing
incubators previously funded under the Building on IT Strengths (BITS) programme.
ICTIP will help these incubators continue to make a significant contribution to the national innovation system by:
• identifying and supporting high potential ICT start-ups;
• facilitating growth in employment, revenue and exports for the ICT start-ups;
• assisting the ICT start-ups to secure financial and other support from third party sources (including
venture capital firms, private investors, other technology firms, universities and government);
• establishing mutually beneficial linkages with other elements of the Australian innovation system; and
• adopting strategies to achieve ongoing financial self-reliance without further Australian Government
support beyond the period of the programme extension.
ICT incubators provide seed capital and business advice and help to raise follow-on capital to accelerate the
growth of start-up ICT companies. Incubators have provided assistance to a number of firms that have gone on
to win major national and international contracts, industry awards and attract considerable co-investment.
In 2004-05, incubators funded under the ICTIP reported:
• 640 applications, bringing the total applications under the BITS incubator programme and ICTIP to 4865;
• 32 ICT companies being accepted into the ICTIP as incubatees bringing the total over both programmes to 376;
• 35 incubatees completing agreed business milestones bringing the total to 223 over both programmes;
• raising over $42 million in private co-investment for their incubatee companies, which brought the
five-year total over both programmes to more than $169 million; and
• winning more than $14 million in government grants, which brought the five-year total over both
programmes to more than $38 million.
Chapter 2 - Initiatives for a dynamic national innovation system 65

Other achievements included:
• generating $22.9 million in exports, bringing the total of both programmes to over $42 million;
• creating an increase in annual revenue of $43.2 million to $72.2 million;
• creating more than 280 full-time or equivalent additional jobs in incubatees as of 30 June 2005 with a
further 30 part-time positions also created;
• attracting over $7.1 million in cash and in-kind contributions to support incubator operations, a total
of $34.8 million since the start of both programmes; and
• gaining recognition for the achievements of incubatees in numerous local and international industry
award programmes.
More information about the ICTIP can be found at: www.dcita.gov.au/ict/ict_incubators
Mobile ticket box
Paperless tickets are becoming available via SMS thanks to a mobile ticketing service from mobile
technology company bCODE.
Tickets to a range of events and services can be received through bCODE with clients including Jetstar,
St George, Village Roadshow and Australia Post. They have so far distributed more than 300 million
messages on behalf of their clients globally.
Unlike similar products, bCODE uses text messages rather than barcodes or graphics, so tickets are displayed
on ordinary mobile phones without registration, special hardware or expensive graphic messages. This
means the service is available on 99% of mobile phones.
In early 2005, ADI accepted bCODE into incubation and helped it raise co-investment needed to grow
and develop its scanner technology. bCODE had its technology showcased at the 2006 Melbourne
Commonwealth Games and is showing potential to achieve commercial success in Australia and overseas.
Encouraging companies to innovate
Renewable Energy Development Initiative
The Renewable Energy Development Initiative (REDI) was announced on 15 June 2004 as part of the white
paper, Securing Australia’s energy future, in which the Australian Government outlined its comprehensive approach
to addressing the greenhouse gas challenges associated with the production and use of energy.
Renewable energy technology, alongside improving efficiency in energy supply and use, and accelerating energy
market reform, are key elements of Australia’s overall greenhouse gas response in the energy sector.
REDI aims to support the development of new renewable energy technology products, processes or services
that have strong early-stage commercialisation and emissions-reduction potential. In supporting such projects,
the programme will reduce the environmental impact of energy demand, contribute to the international
competitiveness of Australian businesses and generate national benefits for the Australian economy. It will
support the development of renewable energy technology products, processes and services that have strong
early-stage commercialisation and emission reduction potential.
The programme provides matching competitive grants totalling up to $100 million over seven years until 2011
for applicants to undertake activities that produce, commercialise or establish the commercial or technical viability
of a new, clearly-identified renewable energy technology-related product, process or service.
66 Backing Australia’s Ability

REDI grants range from $50 000 up to a limit of $5 million and projects must be completed within three years.
Customers can apply for funding to meet up to half the cost of eligible expenditure incurred in carrying out a
REDI project. Grants must be matched by a customer on at least a dollar-for dollar basis over
the life of the project.
REDI is delivered by AusIndustry, the business programme delivery division of the
Department of Industry, Tourism and Resources, with joint policy responsibility being
held by the Department of Industry, Tourism and Resources and the Department of
the Environment and Heritage.
Wind turbine
Photo credits: DITR
To December 2006, REDI considered 16 applications under Round 2 and six applicants
were offered grant funding of $10.5 million. Under REDI Round 3, 14 applications were
considered and eight were offered grant funding of $13.3 million. As the programme has
moved away from a ‘rounds’ approach to more frequent assessments, further applications
are expected to be received and assessed - and grants offered - in 2006 – 07.
More information about the REDI can be found at: www.industry.gov.au
Innovation Access Programme – Industry
The Innovation Access Programme – Industry (IAccP – Industry) was designed to foster innovation and
competitiveness and to increase the take-up of leading-edge technologies and best practice processes by Australian
firms, particularly small to medium-sized enterprises. Funding for the programme concluded on 30 June 2006.
IAccP-Industry comprised a competitive grants programme with four strategic elements:
• support for technology showcasing;
• Innovation Access Fora which supported activities to promote Australian access to global, leading-edge
research and technologies and facilitate their take-up by Australian industry;
• a technology advisory service – Industry TechLink; and
• support for the Intelligent Manufacturing Systems Programme.
As part of Backing Australia’s Ability – Building Our Future through Science and Innovation, changes were made in
May 2004 to support for innovation access and transfer activities. Some elements of IAccP – Industry were
included in the new Commercial Ready programme and other elements were incorporated into the Industry
Cooperative Innovation Programme. Activities in 2005-06 included:
• Innovation Access Fora projects were held in support of the Industry Action Agendas in the restaurant
and catering, science, facilities management and electronics industries. These projects progressed Action
Agenda recommendations related to the uptake of innovative technology.
• Support was provided for the automotive industry’s attendance at the World Exposition 2005 in Aichi,
Japan. The project assisted Australian companies to identify research and technologies to be transferred
to Australia and helped Australian companies to form strategic partnerships.
• Industry TechLink provided a free single point of contact with respect to technology advice for small and
medium enterprises across Australia, operating from February 2003 to end June 2006. A review indicated
that 5873 enquiries were received from 3750 small to medium-sized enterprises over the life of
TechLink. The major technology area of demand amongst small to medium-sized enterprises was ICT with
over half the enquiries relating to computer, IT and web advice.
• The Intelligent Manufacturing Systems Programme was an industry-led, international collaboration
programme undertaking pre competitive R&D into the next generation of advanced manufacturing
technologies and processes. A number of firms, CRCs and public sector research agencies are engaged in
nine projects with partners from the EU, Switzerland, US, Canada, Korea and Japan. Australian
membership of the programme ceased in June 2006.
More information about the IACCP – Industry can be found at: www.au.ims.org; and
www.ausindustry.gov.au
Chapter 2 - Initiatives for a dynamic national innovation system 67

Seafood Services Australia Ltd
An Innovation Access Programme industry grant is helping the Australian seafood industry move into the
future by taking advantage of new technology.
Seafood Services was awarded a grant of up to $253 000 to undertake the Seafood Supply Chain Innovation
project. The project will help the Australian seafood industry access information and suppliers of global
technologies relating to product traceability, shelf life stability, live product transport technologies and
biosecurity integrity systems.
Key outputs of the project include the production of 12 ‘how-to’ guides to address key issues in the four
technology areas, and the production of four decision-making tools, one for each of the technology areas.
Industry Cooperative Innovation Programme
The Industry Cooperative Innovation Programme (ICIP) is a $25 million merit-based grants programme to encourage
business-to-business cooperation on innovation projects that enhance productivity, growth and international
competitiveness in Australian industries. The programme has a particular focus of meeting strategic industry needs,
such as those identified through Action Agendas, and supports projects that deliver industry-wide benefits.
Grants can be provided under two streams:
• Stream A, which supports project scoping or innovation mapping activities with a maximum grant of
$150 000 for projects up to 18 months duration; and
• Stream B, which supports R&D, proof-of-concept, innovation demonstration and adaptation or innovation
implementation activities with a maximum grant of $3 million for projects up to three years duration.
Collaboration is a requirement for all ICIP projects. Applicants must propose a consortium comprising a
minimum of three eligible entities that will conduct the project.
During 2005-06, the programme’s first application round was completed with 15 projects being awarded grants
totalling $4.5 million. Projects included an innovative method to breed prawns in earthen ponds and the
development of materials to reduce infections caused by prostheses. The second application round closed on
15 June 2006. A key change was a broadening of the eligibility criteria to allow applications from industry
associations.
In June 2006, the Minister for Industry, Tourism and Resources announced that the ICIP programme guidelines
would be broadened to increase support for projects involving international collaboration. In August and
September, industry was consulted on possible changes to the guidelines. Any changes are expected to take
effect in round three of the programme, which is expected to occur in the first half of 2007.
More information about the ICIP can be found at: www.ausindustry.gov.au
68 Backing Australia’s Ability

Telematics
Under the Industry Cooperative Innovation Programme, the Global Innovation Centre Pty Ltd is
undertaking a scoping and innovation mapping project for the Australian telematics industry. The project
‘Defining the Australian Telematics Industry – establishing sustainable foundations for growth’ is further
defining the key steps in the telematics industry’s technology roadmap, enhancing the understanding of
telematics capabilities in Australia, and scoping out the next step for the ‘connected car’ project.
Telematics is an important player in accelerating ICT convergence in traditional markets such as the automotive
and transport sector, where wireless and location-based services are now playing a key role.
The Australian ICT industry is showing world leading capabilities in the new market of telematics.
National cluster activities have brought together these contributing sectors over the past two years with
outcomes including the AT Signature: Connected Car project. The first version of this project involved
20 contributing organisations that were able to develop a broadband in-car touch-screen enabled system
with an array of features such as real-time monitoring of traffic congestion, road side camera images, nearby
car park locations and prices and emergency features like SOS and crash detection.
The second version plans to explore further innovations such as voice actuation to prevent driver distraction
issues.
Surveys in the US and in Australia by Cebit in 2005 have indicated that over 90% of people would purchase
a vehicle with a telematics offering, provided it met their own specific needs, improved their safety and security,
and was sufficiently economical.
Photo credits: DITR
Information Technology Online Programme
The Information Technology Online (ITOL) Programme is designed to accelerate the national adoption of
e-business solutions, especially by small to medium-sized enterprises. Since 1996, the Australian Government has
allocated more than $15.4 million to 131 e-business projects across a range of industry sectors such as agriculture,
viticulture, creative media, arts and crafts, theatre, aged care services, e-health, transport and construction.
Projects have raised awareness of e-business and the importance of e-business solutions to improving productivity
and competitiveness in various industry sectors. A 2002 study conducted by Macquarie Graduate School of
Management concluded that the majority of ITOL projects have been successful in raising knowledge in diverse
regions, in businesses and in the broader community.
The programme is a catalyst for industry groups to work collaboratively to solve common problems on an
industry-wide basis. Funding is only available to consortium members involving at least three parties. The
preferred e-business solutions are open and inclusive for all participants. In 2005-06, ITOL funded a total of
17 projects to consortium groups involving 114 organisations.
Chapter 2 - Initiatives for a dynamic national innovation system 69

Interest in ITOL and e-business remains strong as evidenced by the high number of applications received
(146 in rounds 13 and 14), high number of people (67 339) visiting the ITOL website and increase in the
number of subscribers (3015 people) to ITOL news.
Since the programme’s inception, a number of new e-business systems have been developed and are now
commercial ready including:
• an anomalous behaviour detection system – a prototype to detect and reduce online banking fraud now
being used in the financial and banking sector; and
• an online hazard and critical control point portal and chemical database – a system to assist the
Australian wine industry meet and satisfy both local and international stringent quality assurance as well
as food safety and environmental standards.
The ITOL programme will conclude in June 2007.
More information about the ITOL Programme can be found at: www.dcita.gov.au/itol
Improved reporting on cancer for improved results
An electronic cancer notification system is set to streamline cancer incidence and mortality data for doctors,
health service planners and researchers.
The eNotification project was selected by the Information Technology Online Programme because it has the
potential to make significant productivity improvements and introduce efficiencies in business operations.
It involves the Cancer Institute of New South Wales, in partnership with Symbion and SEALS laboratories,
piloting an electronic cancer notification system at the institute’s Central Cancer Registry.
Under New South Wales law, all cases of cancer are notified to the registry. This provides cancer incidence and
mortality data to doctors, health service planners and researchers. Symbion and SEALS laboratories reconfigured
their systems to send pathology reports electronically to a receiving system installed by McCauley Software.
Reports are transmitted virtually and instantaneously between the registry and the laboratories.
The introduction of such a system has increased the speed of notification, enhanced the security of confidential
patient information and reduced manual data processing. The electronic cancer notification system will
facilitate improved reporting and analysis of cancer incidences.
Professor Peter Russell of Symbion Laboratory said electronic cancer notification was the first step toward
more structured pathology reports of cancer cases.
‘We expect this technology to drive quality and consistency in reporting and allow better analysis of data
over large samples, as well as easier integration into new clinical systems in hospitals,’ he said.
Pharmaceuticals Partnerships Programme
The Pharmaceuticals Partnerships Programme (P 3 ) is a $150 million, five-year programme designed to increase the
level of high quality pharmaceuticals R&D undertaken in Australia.
It provides companies selected through a competitive process with funding for every additional dollar of
pharmaceuticals R&D undertaken in Australia, up to a $10 million cap. P 3 encourages partnerships between
local firms, multinationals, biotechs and research organisations. The programme has had two competitive entry
rounds to date (1 July 2004 and 1 July 2005) and funding under the third round will commence on 1 July 2007.
The programme concludes on 30 June 2009.
P 3 funding has helped establish several new research collaborations. Merck Sharp & Dohme (MSD) entered
into a collaboration in August 2005 to license CSL’s Iscomatric Adjuvant technology. The deal will complement
MSD’s development of vaccine products and will give CSL distribution rights in Australia to certain vaccines
developed using the technology. Furthermore, MSD has a number of ongoing Australian research collaborations
including a collaboration with Benitec to use its gene-silencing technology.
In 2005, ChemGenex entered into collaboration with British biopharmaceutical company Vernalis to discover and
validate novel depression and anxiety genes. This collaboration is expected to be worth $2 million in its first year.
70 Backing Australia’s Ability

Some P 3 companies have successfully launched a range of new drugs. These include CSL and MSD’s Gardasil, which
was approved by the US Food and Drug Administration and the Therapeutic Goods Administration in June 2006.
The Centre for International Economics completed an evaluation of the programme’s first year in February
2006. Annual reports from round one participating firms were assessed and a stakeholder survey was completed
to quantify the programme’s inducement effect and to evaluate whether P 3 is achieving its policy aims against
its performance indicators.
The evaluation indicated that P 3 is having a small but significant impact on total investment in pharmaceuticals
R&D in Australia. P 3 prompted a higher overall level of investment in R&D and induced the relocation of
some investment from overseas. The R&D undertaken was also considered to be at the higher risk and higher
value end of the R&D spectrum.
New guidelines for round three funding have been developed, taking into account the findings of this
evaluation and feedback from industry through the Pharmaceuticals Industry Action Agenda. Round three
opened for applications in August 2006.
More information about the P 3 can be found at: www.ausindustry.gov.au
Pharmaceuticals Partnerships Programme shows results
The approval of Aridol by the Therapeutic Goods Administration is an example of a human therapeutic
product developed in Australia from concept to commercialisation.
Pharmaxis Ltd, a round one participant in the Pharmaceuticals Partnerships Programme, announced the
approval on 23 March 2006. Aridol is designed to identify patients with active asthma and provide
information on the severity of the disease and the effectiveness of current treatment. More than two
million people in Australia and 52 million people worldwide live with the disease. Currently, there is no
registered, objective test to measure inflammation and hyper-responsiveness in the airways, which are the
symptoms of active asthma. Aridol fills this gap.
Pharmaxis will market Aridol directly in Australia and is negotiating European marketing agreements
with specialised companies committed to improving standards in respiratory care.
New Industries Development Programme
The New Industries Development Programme (NIDP) aims to improve Australia’s performance in the
commercialisation of new, innovative agribusiness products, services and technologies.
Through initiatives supported under the programme, Australian agribusiness enterprises will gain the business
skills and resources required to successfully commercialise new agribusiness products, services and technologies.
The programme’s outputs will assist agribusiness to increase its capability to identify and respond to demands
from new customers, thereby generating significant and measurable business and job growth over the mediumterm,
particularly in rural and regional Australia.
Under Backing Australia’s Ability, NIDP was a five-year programme with funding of over $20 million to June 2006.
The programme was extended by $14 million to June 2011 through Backing Australia’s Ability – Building Our
Future through Science and Innovation. The funds will be used to provide:
• competitive-based funding to assist small to medium agribusinesses to incubate new innovative niche
agribusiness ventures that encourage through-chain approaches as part of a Pilot Commercialisation
Project (PCP). Funding for PCPs is provided on a matched dollar-for-dollar basis with the applicant,
to a maximum NIDP contribution of $120 000 (including GST);
• competitive-based in-market experience scholarships that enable emerging managers to gain first-hand
experience in specific areas of business management and new markets;
• further distribution of supply chain management and market analysis initiatives to encourage the
adoption of stronger, more innovative solutions to supply chain and marketing arrangements;
Chapter 2 - Initiatives for a dynamic national innovation system 71

• provision of a business development initiative to change attitudes and build understanding of what investors
are seeking, and provide new businesses with access to commercial skills; and
• up-to-date quality information to be used by agribusinesses based on demonstration projects that
showcase successful, market-driven innovation such as provided in the Made in Australia publication.
More information about the NIDP can be found at: www.daff.gov.au/agribiz
A market for over ripe coffee beans
Over ripe coffee beans have found a use in the espresso market with the
help of a New Industries Development Programme Pilot
Commercialisation Project grant.
In January 2005, Mountain Top Coffee Company was awarded a grant
of $76 000 to install a processing line for over ripe fruit.
Photo credits: DAFF
At the time, over ripe coffee beans were discarded as waste, which meant
30-50% of the crop was thrown away. After two years of research
Mountain Top installed a new production facility for the harvest at the
end of 2005, which uses a double-pass process for over ripe fruit, to
separate it from ripe fruit and process it for the espresso market.
Mountain Top Coffee Company now exports to countries such as Italy, Norway, Sweden, France, Spain,
Japan, Canada, New Zealand and the US. The company was also awarded an In-Market Experience
Scholarship in 2003 to help commercialise the coffee.
Textile, Clothing and Footwear Post-2005 Strategic Investment Programme
The Textile, Clothing and Footwear (TCF) Post-2005 Strategic Investment Programme (SIP) Scheme is designed
to foster a sustainable and internationally competitive TCF manufacturing and design industry in Australia.
It is a capped entitlement scheme, which promotes investment and innovation by providing reimbursement grants
for expenditure on capital investment and innovation annually and in arrears.
Total funding available is $575 million from 2006-07 to 2015-16. Annual funding allocations of $97.5 million are
being provided from 2005-06 to 2009-10, and $17.5 million from 2010-11 to 2014-15. By 25 August 2006, there
were 534 entities registered for participation in the scheme. The first grants will be paid in June 2007.
More information about TCF-SIP can be found at: www.industry.gov.au/tcf
Automotive Competitiveness and Investment Scheme Motor Vehicle Producer Research
and Development Scheme
The Automotive Competitiveness and Investment Scheme Motor Vehicle
Producer Research and Development Scheme aims to increase the amount
of high-end R&D undertaken by motor vehicle producers in Australia
over the period 2006-2010.
Car production line. Photo credits: DITR
Close to $142 million has been awarded to 13 projects through two
competitive rounds. These projects are focused on a range of new technologies
including alternative fuels and engine efficiency improvements.
More information about this scheme can be found at: www.ausindustry.gov.au
72 Backing Australia’s Ability

Renewable Energy Commercialisation Programme
The Renewable Energy Commercialisation Programme is a $54 million competitive grants programme designed
to foster the development of the renewable energy industry in Australia and reduce the emission of greenhouse gases.
Administered by the Australian Greenhouse Office division of the Department of the Environment and Heritage,
it provides funds for projects that lead to the commercialisation of innovative renewable energy equipment,
technologies, systems and processes.
The programme has awarded funding of between $135 000 and $1 million for 49 projects, including solar
photovoltaic, solar thermal, wind, biomass, hydro, wave, and hot dry rock developments. Three projects were
successfully completed in 2005-06, bringing the number of completed projects under the programme to 30.
It is estimated that 500 direct jobs have or will be created as a result of the programme. Private sector investment
of up to $238 million and exports of $120 million could also be achieved.
Additional benefits include greenhouse gas abatement, rural and regional development, waste minimisation,
salinity mitigation, job and export creation, and diversification of agricultural incomes.
More information about the Renewable Energy Commercialisation Programme can be found at:
www.greenhouse.gov.au/renewable/index.html
Greenhouse Gas Abatement Programme
The Greenhouse Gas Abatement Programme (GGAP) targets projects that achieve large-scale, cost-effective and
sustained abatement of greenhouse gas emissions from any sector of the economy, particularly in the target
period 2008-2012.
GGAP is administered by the Department of the Environment and Heritage and funding is provided to private
industry, industry associations and local, state and territory governments to support projects that will result in
substantial emission reductions or substantial sink enhancement.
The programme leverages significant private sector investment in large-scale energy efficient and greenhouse
abatement technologies and practices. Under GGAP, the latest industrial plant, equipment and techniques are
being applied to the mining, minerals and energy sectors to deliver greenhouse gas abatement.
There have been three rounds of GGAP. One of the criteria for funding is the extent to which projects accelerate
efforts to research, develop and deploy new technologies or innovative processes. Examples of GGAP projects
include co-generation (the use of waste heat or steam from power production or industrial processes for
power generation), energy efficiency, travel demand management, alternative fuels, coal mine gas technologies
and fuel conversion.
The Macquarie Generation project was successfully completed in 2005-06, bringing the number of completed
projects under the programme to four. The project has increased the generation efficiency at the Liddell Power
Station located near Muswellbrook in New South Wales by replacing low pressure turbines with modern turbines.
The new units were designed to achieve a minimum efficiency improvement of 3% compared with the design
of the original 1960s turbines. This efficiency gain is expected to deliver greenhouse gas emission reductions
of up to 1.66 million tonnes between 2008 and 2012. The project will lower water demands, delivering broader
environmental benefits as well as greenhouse gas reduction.
Funding of $66.2 million is allocated to the GGAP over the next four years, during which projects currently
underway will reach completion. According to the 2005 greenhouse gas projections, the programme is expected
to deliver emissions savings of 6.1 million tonnes in 2010.
More information about the GGAP can be found at: www.greenhouse.gov.au/ggap/index.html
Chapter 2 - Initiatives for a dynamic national innovation system 73

Building links to facilitate commercialisation and innovation
Cooperative Research Centres Programme
The Cooperative Research Centres (CRCs) Programme was established to bring researchers and research users
together. It emphasises the importance of collaborative arrangements to provide research solutions focused
on industry needs. It also has a strong educational component with a focus on producing graduates with skills
relevant to industry.
In 2006-07, there will be 57 CRCs operating across the medical science and technology, mining and energy, manufacturing
technology, information and communications technology, agriculture and rural based manufacturing, and
environment sectors. CRCs are established for up to seven years to promote long-term strategic links and
collaborations between industry, universities and government. They undertake commercially focused research
and development for the benefit of business.
The CRC Programme was launched in 1990 and funding was increased under Backing Australia’s Ability. An additional
$65 million was provided for the selection rounds in 2006 and 2008 as well as to fund the successful applicants
from the 2004 selection round. The Minister for Education, Science and Training announced the outcomes of
the 2006 round on 22 December 2006 and it is expected that the new CRCs will be in place by 1 July 2007.
Each year the CRC Programme produces successful outcomes in the areas of research and education, generating
income and fostering collaboration.
In 2004-05, CRCs produced over 2400 publications for industry and other end users as well as 1065 confidential
and unpublished reports. In addition, over 1300 academic papers were accepted for publication and over 2400
conference papers were published.
The programme supported over 2000 full-time equivalent post graduate students (PhD, Masters and others)
during the year, and 576 post graduates students commenced their studies. Another 318 took up employment
in industry. In 2004-05, CRCs also offered training to over 4500 undergraduate students.
Knowledge diffusion and awareness was raised by CRCs offering almost 300 training courses for industry and end
users as well as through almost 800 conferences.
Since the CRC Programme commenced in 1990, over $11 billion in cash and in-kind resources has been committed,
including for CRCs selected in the 2004 round. The source of these resources includes more than $2.6 billion
from the CRC Programme, $2.8 billion from universities, $2 billion from industry and $1 billion from CSIRO.
In 2004-05 there were 1177 companies involved in the programme, with 679 small to medium-sized enterprises and 498
large businesses, as well as 608 international commercial alliances and 112 international research/education alliances.
During the year, all CRCs undertook over 600 research contracts and consultancies from industry and other end
users, earning almost $53 million. CRCs reported over 4000 license agreements, creation of 12 spin-off companies
and over 20 other types of technology commercialisation agreements. In terms of patents, over 600 were maintained
overseas and over 200 in Australia. Twenty-two patents were filed overseas and 68 were filed in Australia.
A recent report by the Allen Consulting Group has validated the success of the CRC Programme and has
shown that for every dollar invested by the Australian Government, the programme returned $1.60.
More information about the CRC Programme can be found at: www.crc.gov.au and www.crca.asn.au
74 Backing Australia’s Ability

Vision CRC
International collaboration between scientists and industry is helping contact-lens
wearers maintain eye health.
The Vision Cooperative Research Centre is a great example of the sort of successful
innovation produced by the Cooperative Research Centre Programme, which
maximises the benefits of research through an enhanced process of utilisation,
commercialisation and technology transfer.
The 020PTIX contact-lens, developed through a collaboration of the Vision
Cooperative Research Centre and one of its partners, CIBA Vision, has been a
massive success in the US$4.6 billion global contact-lens market.
020PTIX contact-lens. Photo credits: Vision CRC
The lens is designed for people who usually wear contact-lenses during the day, but want the option of
occasional overnight wear. O2OPTIX transmits considerably more oxygen to the eye of the wearer than
traditional soft lenses, which helps to maintain eye health.
The sales of O2OPTIX and NIGHT & DAY contact-lenses, also developed by the same team, generated
US$10 million in royalties for the Vision Cooperative Research Centre in 2004-05. That figure is expected
to rise significantly over the life of the patents, which extend to 2014.
World Class Centres of Excellence – Biotechnology: Australian Stem Cell Centre
The Biotechnology Centre of Excellence, the Australian Stem Cell Centre (ASCC), is the flagship biotechnology
initiative of the 2001 Backing Australia’s Ability. ASCC will receive $98.55 million over nine years to 2011 through
a joint funding arrangement between the Department of Industry, Tourism and Resources and the Australian
Research Council.
ASCC is undertaking cutting-edge, product-based research using four platform technologies: adult stem cell research,
human embryonic stem cell research, tissue repair, and immune system technology. It is establishing a critical
mass of leading national and international researchers and forging new partnerships with institutions and companies.
At 30 April 2006, the centre had identified 35 research projects to fund. These projects align with its scientific and
commercialisation objectives under the deed of agreement with the Australian Government.
The centre, headquartered in Melbourne, has funded research in four states. Institutions hosting research
activities include Monash University, University of Queensland, the Victor Chang Cardiac Research Institute,
the Murdoch Children’s Research Institute and Adelaide University.
Highlights over the past year include:
• In September 2005, collaboration was announced with the CRC for Polymers to develop smart surfaces
for use in bioreactors that will provide new and improved ways of culturing and differentiating cells.
A new technology combining immune system research and stem cell know-how is also being developed
under a tripartite agreement between Monash University, the ASCC and Norwood Immunology.
• ASCC scientists published a Nature Biotechnology paper in February 2006, which detailed the discovery
of a new method of detecting abnormal embryonic stem cells before they change into cancerous cells
– a discovery which could overcome a major challenge facing this field of research.
• A new international collaboration in stem cell research between ASCC, Monash University and
University of California, San Diego was announced in April 2006. The collaboration will bring together
more than 300 leading scientists in regenerative medicine and stem cell science and will underpin major
collaborations between Victoria and California. Under the initiative, the institutions will organise scientist
exchanges, host joint workshops, develop joint grant applications, share equipment and materials, and
establish joint clinical trials and commercial developments.
• By May 2006, ASCC had awarded a total of 11 premier scholarships (up to $25 000 a year) and 14 small
postgraduate research stipends (up to $10 000 a year). It had also provided a number of travel grants
and conference awards.
More information about the ASCC can be found at: www.stemcellcentre.edu.au
Chapter 2 - Initiatives for a dynamic national innovation system 75

Taking a closer look at stem cells
A photo exhibition featuring stem cells in their various
forms toured Australia in late 2005 and early 2006 to
help raise awareness and to inform the community about
research in this field.
The exhibition displayed the best entries to a photography
competition that was open to scientists nationally and
was sponsored by the Australian Stem Cell Centre. The
exhibition travelled to major centres around Australia,
finishing at Parliament House in Canberra.
The exhibition highlighted the extraordinary work
underway in Australia to unlock the potential of stem cell
science and regenerative medicine.
Neuronal Nebula by Aaron Robinson. Photo credit: ASCC.
Each photograph was accompanied by a short explanation
to inform people about key aspects of the image and its
relevance to science and potentially to health care, such as
the Neuronal Nebula by Aaron Robinson. This celestiallike
image showed the development of stem cells along
the ectodermal pathway.
World Class Centres of Excellence – ICT: National ICT Australia
The National Information and Communications Technology Australia (NICTA) Centre of Excellence was
established in October 2002 as the information and communications technology cornerstone of Backing Australia’s
Ability. With a strong international research focus, its mission is to build a global R&D presence for Australia.
Australian Government funding of $129.5 million was allocated for NICTA’s first five years of operation to
2005-06. An additional $251 million was provided to cover funding over five years to 30 June 2011 to:
• develop first-class Information and Communications Technology (ICT) research capabilities in existing
and emerging fields;
• increase the availability of high quality ICT research skills by providing post graduate training and attracting
ICT researchers from overseas;
• exploit the commercial potential of research outputs; and
• become a catalyst for the development of networks and clusters in ICT industry activity.
NICTA completed its third full year of operation in December 2005 having grown to 364 staff, of which 196
were researchers, with a further 77 research support staff (engineers, programmers and assistants). Some 88
researchers are seconded from various tertiary institutions with the main contributors being the University of
New South Wales, the Australian National University and the University of Melbourne. At 31 December 2005,
NICTA was undertaking 50 projects across 16 programmes and was providing support and training to 209
PhD research students. During the year, 153 international researchers visited NICTA while NICTA staff made
161 research visits to international institutions.
During its early days, NICTA’s three research laboratories were established in Kensington and the Australian
Technology Park (both in Sydney) and Canberra. In 2004, NICTA signed agreements with the Victorian and
Queensland governments and four major universities to establish research nodes in Melbourne and Brisbane,
which are now in operation. NICTA will continue to grow its staffing and research programmes through
2006-07 across its five laboratories until it reaches its full scale of operations in 2007.
76 Backing Australia’s Ability

NICTA is now a leader in Australia’s ICT research community and is involved with Australia’s major public
and private research centres and universities, as well as with international contemporaries in the US, Europe
and Asia. It is also establishing linkages with small to medium-sized enterprises so they can become familiar
with NICTA’s research activity and, where there is alignment, participate in research project development.
NICTA has been working with other public sector R&D organisations to develop a consolidated, high-level
Australian ICT R&D technology roadmap. Other participants include the Defence Science and Technology
Organisation, CSIRO, the Council of ICT Cooperative Research Centres and various major research universities.
Resources have been committed to develop a detailed business plan and project specification for a major joint
collaborative project (named Braccetto) in the area of human computer interaction.
More information about the NICTA Centre of Excellence can be found at: www.nicta.com.au and
www.dcita.gov.au/ictcoe
The answer to cancer treatment
NICTA and the Peter MacCallum Cancer Centre are working together to change the way cancer medicine is
practiced through the application of advanced techniques in data analysis to large sets of genomic data.
NICTA has been working with the centre through its Statistical Machine Learning research programme.
The centre has been able to provide NICTA with high-quality DNA datasets involving hundreds of
samples with important information on gene expression, gene copy number and chemical modification.
To date, most of the work in this field has been done with small datasets and analysed using relatively
basic methods. But the results of this innovative study could change the diagnosis of cancer, treatment
selection and prognosis.
National Biotechnology Strategy
The Australian Government launched the National Biotechnology Strategy (NBS) in 2000 to provide a
framework for capturing the benefits of biotechnology for Australia. Biotechnology Australia (BA) provides
a whole-of-government approach as the coordinating agency for five government departments with biotechnology
responsibilities: industry, agriculture, environment, education and science, and health.
Through investments both prior to and under the Backing Australia’s Ability initiative, the Australian Government
has provided funding under the NBS for a range of activities, including: funding for the Biotechnology
Innovation Fund; funding studies through the Department of Agriculture, Fisheries and Forestry and
Department of Environment and Heritage; the establishment of the National Stem Cell Centre; support for BA
and the development of coordination mechanisms; and support for industry development through sponsorship
of Australian industry in national and international conferences. During 2005-06, further progress was made
towards strengthening the national approach to capturing the benefits of biotechnology for Australia while
safeguarding human health and ensuring environmental protection.
In November 2005, the Australia’s Biotechnology Capabilities publication was launched at the AusBiotech National
Conference. The publication, developed in agreement with state and territory governments through the Biotechnology
Liaison Committee, outlines national capabilities in biotechnology application and products areas and is being
used in coordinated international marketing activities and to inform future national policy development.
In 2006 BA produced a map of Australia’s regulatory environment for biotechnology and a web tool to help
industry negotiate the regulatory environment. The regulatory map was launched at the 2006 AusBiotech
National Conference and is available online at www.bioregs.gov.au.
Under the next phase of NBS work, BA will implement the national statistical framework for biotechnology
completed in December 2006. Through the Biotechnology Liaison Committee, a 10-year forward plan for each
of the four key areas of application will also be developed, starting with agribiotechnology.
More information about the NBS can be found at: www.biotechnology.gov.au
Chapter 2 - Initiatives for a dynamic national innovation system 77

Biotechnology Australia Public Awareness Programme
The Biotechnology Australia Public Awareness Programme provides balanced and factual information to the
Australian public, increases awareness of biotechnology issues and enables the community to make more
informed choices about applications of biotechnology.
A number of key publications were produced during the year including:
• Cloning goes to the movies, Public Communications of Science and Technology Conference, Korea, May 2006.
• Social causes of public concerns about developments in biotechnology in Australia, Proceedings of the Public
Communication of Science and Technology, Beijing, 2005.
• Understanding social drivers of public concerns about biotechnology, Talking Biotechnology Conference,
Wellington, 2005.
• Lies, deep fries and statistics, Choices, USA, 2005.
• Meeting of the minds report, July 2005.
• What you really need to know about what the public think about genetically modifi ed foods, November 2005.
The Biotechnology Australia (BA) website averaged 37 000 hits a month while Biotechnology Online averaged
over 50 000 hits a month. More than 880 Biotechnology Online kits were distributed to teachers at professional
development sessions and more than 1100 enquiries were handled from the public about biotechnology issues
via the Gene Technology Information Service.
BA rated 53.2% as a source of trust on biotechnology issues (compared to consumer organisations at 66%
and the media at 21.6%) in 2005.
Other major activities undertaken during the year included:
• managing the successful Biotechnology Online schools resource with an updated supporting programme
of professional development for teachers;
• developing careers in biotechnology resources for upper high schools;
• implementing a national rural communications programme targeted at farmers and rural communities;
• producing resources for local councils and general practitioners including Genetics in family medicine: the
Australian medical resource for general practitioners;
• participating in community forums and conferences;
• undertaking regular public attitude research and surveys to more fully understand community concerns
and aspirations, and to provide feedback to industry, researchers and governments on public attitude
findings;
• maintaining a comprehensive website for information on biotechnology and bioethics issues; and
• undertaking a major consultative and information sharing forum on the future of genetically modified
crops in Australia – A meeting of the minds, July 2005.
More information about the Biotechnology Australia Public Awareness Programme can be found at:
www.biotechnology.gov.au
78 Backing Australia’s Ability

Biotechnology 2020 forums
A series of innovative community engagement forums are being
held around Australia to engage the community on issues relating
to the impact of biotechnologies in the year 2020.
The forums provide an opportunity for an expert panel of
scientists, ethicists and other specialists to address both the risks
and the benefits of biotechnology in the future. They also allow
two-way communication between specialists and community
groups on a wide range of issues, including environment, invasive
animals, genetically modified crops and foods and biotechnology
in human health.
Audience participation in the forums include using digital voting
technologies, where each member of the audience has a handheld
console to respond to questions put to them by the panel
with the total audience vote displayed instantly on a screen.
Biotechnology Australia staff member, John Kelly, welcoming people to the
Information Booth after the Biotechnology 2020 public forum in Mount
Gambier, South Australia. Photo credits: Craig Cormick, DITR.
Protecting intellectual property
Intellectual Property
IP Australia, the Australian Government agency responsible for administering the Australian intellectual property
rights system for patents, trade marks, designs and plant breeder’s rights, provides ongoing funding and support
for Backing Australia’s Ability intellectual property (IP) initiatives.
IP Australia is recognised internationally as a leader in IP public education and awareness programmes. It works
closely with stakeholders to develop a range of effective awareness and educational products including targeted
seminars for small business and the tertiary sectors, a variety of online instructional services such as InnovatED and
IP Professor, guides for business such as Smart Start and the IP Toolbox and a range of informative publications.
The response to the recommendations of the Intellectual Property and Competition Review Committee’s report,
Review of Intellectual Property Legislation under the Competition Principles Agreement, and the Advisory Council on
Intellectual Property’s Review of Enforcement of Industrial Property Rights, formed part of the Backing Australia’s Ability
IP protection initiatives.
Several key patent recommendations from these reports were implemented by the Patents Amendment Act 2001. Most
of the remaining elements are included in the Intellectual Property Laws Amendment Bill 2006, which received the
Royal Assent on 27 September 2006. These include:
• providing for exemplary damages to be awarded in cases of blatant or wilful infringement of a patent;
• clarifying the operation of section 119 of the Patents Act and extending the scope of this section to encompass
all acts which would constitute an infringement of the relevant patent; and
• providing a competition test as an additional ground on which a compulsory licence to use a patent may
be granted.
Recent awareness and education initiatives undertaken by IP Australia include:
• celebrations around World IP Day on 26 April including a partnership with the Australian Innovation
Festival to raise awareness of intellectual property. Key activities included:
o a World IP Day theme for the ABC’s television show the New Inventors followed by an online forum
about how and when innovators should protect their ideas;
o a series of events on IP education held in conjunction with other government departments and
organisations across Australia as part of the Australian Innovation Festival;
Chapter 2 - Initiatives for a dynamic national innovation system 79

• commercialisation seminars for small and medium-sized enterprises held in Sydney, Melbourne and
Brisbane as part of the Australian Innovation Festival;
• celebrations associated with the 100 th anniversary of the Trade Marks Office including a special promotion
that voted Weetbix as Australia’s favourite trade mark;
• the launch of the IP Media Centre website and Journalist’s Guide to IP; and
• an education campaign conducted with the Queensland Department of Tourism, Fair Trading and Wine
Industry Development to redress confusion surrounding business names and trade marks. Two postcards
were developed and over 25 000 were distributed to business name applicants in Queensland.
Intellectual Property Research Institute of Australia
The Intellectual Property Research Institute of Australia (IPRIA), located at the University of Melbourne, provides
multi-disciplinary research on key IP issues to promote debate, help develop IP policy and identify best
commercial practice in the use of IP. IPRIA has a growing national and international profile. Major research
achievements over the past year include publishing 27 working papers or occasional papers and six reports/
scoreboards, delivering 36 conference papers or other presentations in Australia and overseas and securing
publication of 21 research outputs in either a refereed journal or book.
IPRIA is currently engaged in research on 23 research projects, covering a broad range of issues.
Review of Designs Spare Parts Exclusions
The new designs rights system, which commenced in June 2004, excluded spare parts from designs protection
through a right of repair provision. When introducing the new designs legislation, the Australian Government
announced that IP Australia would undertake a formal review of the right of repair exclusion to assess how
well it had met the government’s objectives of encouraging innovation and competition. The review
commenced in August 2005, and a final report was released on 23 June 2006. It recommended that no changes
be made to the designs spare parts provisions at this stage as the provisions had yet to have a significant affect
on industry and consumers. The full impact of the provisions is unlikely to become evident for some years.
Review of Innovation Patent
The Australian Government committed to review the effectiveness of the innovation patent system within five
years of its introduction in 2001. The purpose of the system is to encourage and stimulate innovation by providing
a faster and relatively cheaper means through which Australian businesses, particularly small and medium-sized
enterprises, can protect their lower level inventions.
IP Australia released an issues paper in August 2005 for consultation. The final report, which was released in
August 2006, found that the system meets its objectives and that significant changes are not warranted. Inadequate
knowledge of the system was identified as a barrier to further improving public usage of the innovation patent. To
address this, IP Australia is, however, planning further public awareness activities.
Review of Grace Period
Amendments to the Patents Regulations 1991 providing a grace period for filing patent applications came into effect
on 1 April 2002. The grace period ensures that a patent is not invalidated because the invention was published
or used in the 12-month period before the Australian filing date of the application, where the publication was
made by, or with the consent of, the applicant.
The Australian Government committed to review the effectiveness of this initiative within two years and
issued its report in August 2005. The report concluded that no changes were necessary, but that IP Australia
should continue to monitor international developments as well as monitoring judicial consideration of the
provisions in Australia.
More information is available at: www.ipaustralia.gov.au; www.ipaustralia.gov.au; and www.ipria.org
80 Backing Australia’s Ability

PART 3 - Developing and retaining Australian skills
Australia’s capacity for science and innovation depends upon the availability of well-educated and highlytrained
people who can conduct world-leading research and support the growth of innovative businesses and
industries. The potential to attract, develop, and retain such people will have an impact on our ability to
compete in global markets and secure Australia’s long term economic growth and development.
Australia’s education and training systems are among the world’s best and support the development of a wide
range of skills relevant to a modern economy. However, like many other countries, Australia is experiencing
increasing pressure in the supply of people with science, engineering and technology skills. This is being driven
by a number of factors including: high levels of demand that have accompanied strong growth in some
sectors; a highly competitive global market for skills in these areas; and an apparent decline in student interest
in, and uptake of, relevant courses.
Through the Backing Australia’s Ability initiative, the Australian Government is working to improve incentives
and support for people to develop science, technology and related skills across the lifecycle (from early
schooling to tertiary education and beyond), encourage positive attitudes towards science and innovation in
the community, and improve the long-term sustainability of Australia’s skills base. This section identifies some
key indicators of Australia’s performance in developing and retaining the skills that underpin an innovative
economy and highlights relevant activities of Australian Government departments and agencies
over 2005-06.
Performance highlights
• Total human resources devoted to R&D (R&D personnel) in Australia reached 119 384 person years
in 2004-05, an increase of 24.9% from 2000-01.
• Australia had around 8 researchers (person years) per thousand labour force in 2004. This ranked
Australia in 8th place among OECD countries.
• Human resources in science and technology by qualification (persons successfully completing tertiary
education in a science and technology field) in Australia accounted for 30.8% of total population aged
25-64 years in 2004. Australia ranked 8th among OECD countries on this indicator.
• Human resources in science and technology by occupation in Australia (persons employed in a science
and technology occupation where tertiary qualifications are normally required) accounted for 35.6%
of total employment in 2001. Australia ranked 6th among OECD countries on this indicator.
• The percentage of Australia’s 25 to 34 year old population with tertiary education was around 36.2%
in 2004, compared to 30.9% for the OECD average.
• Australia ranked 8th among OECD countries in terms of the number of PhD graduates as a percentage
of the population at a typical age of graduation in 2004.
• Australia achieved a net gain of 42 349 highly-skilled workers through migration in 2005-06, an increase
of 64.6% from 2000-01.
• In 2003 Australia ranked 8th among OECD countries in terms of mathematical literacy of 15 year olds
and 4th in terms of scientific literacy of 15 year olds.
Chapter 2 - Initiatives for a dynamic national innovation system 81

Advancing SET skills
Audit of Science, Engineering and Technology Skills
The Australian Government’s Science, Engineering and Technology (SET) Skills Audit was announced in
response to concerns expressed by industry and the academic research community about the current supply of
skills from the education and training system and its ability to meet current or future demands.
The audit is part of the Australian Government’s commitment to developing Australia’s potential through research
and innovation. It has involved several research projects to develop a comprehensive picture of skills issues
in Australia, including:
• an analysis of the supply of skills from the education and training sectors and demand for skills in the
labour market;
• international factors influencing the decision of Australians to work overseas;
• a review of current literature;
• a national survey of youth attitudes towards the study of science, mathematics and technology subjects
and their career aspirations;
• a national industry survey examining the demand for skills, recruitment difficulties, current vacancies
and short to medium-term outlooks;
• six key industry case studies;
• public submissions;
• public forums; and
• consultations, including stakeholder meetings.
Major audit findings include:
• Demand for science, engineering and technology workers is currently at high levels and strong demand seems likely to continue
– this is driven by resource sector growth and infrastructure development and renewal. Significant
recruitment difficulties exist across engineering disciplines and in some science disciplines (including
chemistry), particularly for high level skill sets and in remote and regional areas.
• Domestic supply from education and training is lagging – participation in science, engineering and technology across
all education and training sectors is static or declining, particularly in the enabling sciences.
• Supply of science, engineering and technology skills from migration is important – on balance, Australia gains skills from
migration after discounting for skill losses through emigration. Numbers seem likely to be enhanced
by recent changes to the Skilled Migration Programme to address short-term skill shortages.
• Science career paths and research funding mechanisms – limited domestic career opportunities for early and mid
career science researchers may be leading to skill losses to other countries.
• Career advice – there is limited awareness of science, engineering and technology career opportunities by
parents, school teachers and school career counsellors, which may act to discourage participation in
science, engineering and technology study and careers.
• Management of demand for science, engineering and technology skills – maintaining a balance between supply and demand
for skills will be dependent on retention and upgrading skills of existing workers.
• Curricula changes – this includes increasing subject choice at school, which may diminish students’
participation in and understanding of the enabling sciences.
The audit is a further reflection of the Australian Government’s commitment to research, development and
innovation. Following this work, the Minister for Education, Science and Training commissioned specific
research into community awareness of SET, the engagement of pre-school and primary school children with
SET, the factors that influence people to seek out and stay in SET careers, as well as an investigation into the
career opportunities for early to mid-career researchers in Australia.
More information about the Science, Engineering and Technology Skills Audit can be found at:
www.dest.gov.au/setsa
82 Backing Australia’s Ability

Fostering Scientific, Mathematical and Technological Skills in Government Schools
Through Backing Australia’s Ability, the Australian Government is allowing states that trigger the Enrolment
Benchmark Adjustment (EBA) to retain their EBA liability for use in government schools to achieve better
scientific, mathematical and technological skills, develop school-based innovation and build supportive school
environments.
The EBA is a mechanism designed to remove the potential for cost shifting by states to the Australian Government
by adjusting general recurrent grants for government schools based on the movement in the ratio of nongovernment
students to government students.
To retain their EBA liability for use under this initiative, states which trigger the EBA must submit a strategic plan
to the Minister for Education, Science and Training each year setting out their proposed activities to strengthen
the science, mathematics and technology curriculum in government schools.
For 2006 the total EBA liability is $134.2 million. It has been triggered in New South Wales, Victoria, Queensland,
South Australia and Western Australia.
The initiative will continue under Backing Australia’s Ability – Building our Future through Science and Innovation with
the Australian Government providing an estimated $530.6 million over the four years 2005 to 2008 from the
general recurrent grants allocation.
The Le@rning Federation: Schools Online Curriculum Content Initiative
The Australian Government is providing $60 million from 2001-02 to 2008-09 to support the development of
online curriculum resources, services and applications for Australian schools. This collaborative initiative is
funded on a matched funds basis with the states and territories. New Zealand joined the initiative in 2002.
Australian Government funding for the years 2006-07 to 2008-09 is through the ICT Innovation to Support National
Consistency 2006 Budget measure. From 2001-2006, the initiative was funded through Backing Australia’s Ability.
The Le@rning Federation was the first initiative of its type in Australia with a commitment to a standardised
approach to content creation and dissemination. New knowledge is created in the areas of online curriculum
content, supporting software and systems, and research findings on using digital content in classrooms and
learning outcomes.
During 2005-06, The Le@rning Federation:
• created 1737 learning objects (digital content for school students with embedded learning design) and 2844
digital resources (digitised items from cultural, scientific and archival collections accompanied by educational
value statements), which were made available to educational jurisdictions for distribution to schools;
• improved systems for content management, intellectual property rights management and distribution for
use in schools; and
• commissioned research from Professor Peter Freebody from the University of Queensland. His report
Early-stage use of The Le@rning Federation’s learning objects in schools. Results of a fi eld review, January 2006, shows
positive impact on student engagement with learning.
The Le@rning Federation helps equip students when they leave school to be confident, creative and productive
users of information and communication technologies. It also promotes national consistency across education
sectors and improves teacher effectiveness.
Key activities focus on capturing the knowledge of students and educators, and sharing that knowledge to
build educationally sound, high quality content, as well as capturing the experience of students and educators
when using learning objects and sharing that knowledge.
Cross-sectoral and cross-industry collaboration is a cornerstone. Throughout 2005-06, the initiative continued
to encourage collaboration with education systems and sectors, major cultural and public institutions and key
industry organisations.
More information about The Le@rning Federation can be found at: www.thelearningfederation.edu.au/
Chapter 2 - Initiatives for a dynamic national innovation system 83

National Youth Science Forum
The National Youth Science Forum (NYSF) brings
together government, industry and education partners
to inspire and guide Year 12 students towards careers in
science, engineering and related disciplines.
Each year, nearly 300 students from around Australia
are selected to attend the forum on the basis of their
demonstrated aptitude in the sciences, coupled with strong
extra-curricular interests such as sport, drama or music.
At the Molonglo Radio Telescope
The heart of NYSF is a two-week residential programme
in Canberra in January. It is a mix of hands-on scientific
activities, debates, guest lectures and personal
development workshops, all designed to stimulate and
broaden students’ understanding of what it means to
work in science. Students visit a wide range of
institutions including the Australian National University
and its research schools, CSIRO laboratories, Tidbinbilla
Deep Space Network and the Australian Defence Force
Academy.
The forum does not end in January. Later in the year,
presentations are given by a number of universities in
most capital cities. From these sessions students
develop the confidence to live and study elsewhere, as
well as gaining a practical sense of what each university
has to offer.
A small number of NYSF students are also offered a
place at youth science programmes in Canada, South
Africa, England, Russia and Sweden, and are invited to
return as staff in the following year’s January forum
following leadership training.
Building cars at the Faculty of Engineering, Australian National University
For many students, attending NYSF not only broadens
their horizons, but also develops skills to compete
effectively for scholarships and university placement.
NYSF graduates go on to take up influential positions in
government, business, education and industry, and can
be found all over the world.
In 2003, the Australian Government (through its
Quality Outcomes Programme of the Department of
Education, Science and Training’s Quality Schooling
Branch) committed $40 000 a year over three years to
support the forum.
More information about the NYSF can be found
at: www.nysf.edu.au
The Smart Olympiads
Physics, biology and chemistry
NYSF students in the laboratory of Dr Mark Hullett, John Curtin School
of Medical Research. Photo credits: NYSF
In 2005, thousands of Australian students competed in
the national qualifying examinations for the Australian
Science Olympiads (ASO). The 70 highest achieving
students were then invited to become ASO Scholars:
participants in a unique, intensive residential training
84 Backing Australia’s Ability

(Pictured L-R) Amanda Huen, Gold Medalist; Dr Nick Hagan,
Biology Programme Director; Christopher Loo, Silver Medalist;
Dominic Balasuriya, Silver Medalist; Yu-tian Fang, Silver Medalist
and Kenneth Chan, Biology Programme Deputy Director.
(Pictured L-R) Michael Frazis, Silver Medalist; Michael Fahey,
Bronze Medalist; Ying Yeung Chan, Silver Medalist; Kartik
Ramesh, Bronze Medalist; Dr Mark Ellison, Chemistry
Programme Deputy Director; Anthony Phillips and
Elizabeth New
(Pictured Standing) Jack Chen, Silver Medalist.
(Pictured Sitting L-R) Albert Yin, Bronze Medalist;
Lucy Pfeifer, Bronze Medalist; Alexander Zhang,
Gold Medalist; Jordan Brell, Bronze Medalist.
Photo credits: Australian Science Innovations
school designed to extend their skills and
knowledge and stimulate their passion for science.
Thirteen scholars were selected to join Australia’s teams
to the International Science Olympiads – the Olympic
Games for Science. These prestigious competitions are
held each year in different countries. This year biology
was held in Argentina, chemistry in South Korea and
physics in Spain.
As the 2006 teams departed for their respective
competitions, Australia was shown what it is really like
to be a Science Olympian through the ABC four part
documentary mini-series Battle of the Brains. The show
followed the 2005 biology team as it trained to compete
against the best science scholars in the world at the
International Biology Olympiad in Beijing.
Informatics (IOI Team) 2005. From left to right: Minister Brendan Nelson,
Christopher Nelson, Alexander Davies, Ramana Kumar, MP for Canberra
Annette Ellis, Christopher Leong
In 2006, all of Australia’s 13 competitors were awarded
medals including two gold. Australia maintained its
ranking amongst the best competing countries and
placed 6 th out of 48 in biology, 20 th out of 66 in
chemistry and 14 th out of 77 in physics.
The Australian Science Olympiads is proudly supported
by Merck Sharp & Dohme and the Australian
Govern ment through the Science Connections
Programme administered by the Department of
Education, Science and Training.
Mathematics (IMO) 2005. From left to right: Minister Brendan Nelson, Graham
White, Konrad Pilch, Samual Chow, Stephen Muirhead, Vinoth Nandakumar,
Kim Ramchen.
Informatics (IOI Team) 2006 with Minister Bishop. From left to right: Jarrah
Lacko, Jack Murray, Minister Julie Bishop, Alan Alpert, Christopher Chen
Mathematics (IMO Team) 2006 with Minister Bishop. From left to right:
Charles Li, Graham White, Konrad Pilch, Minister Julie Bishop, Vinh Pham,
Matthew Ng, Vinoth Nandakumar.
Chapter 2 - Initiatives for a dynamic national innovation system 85

Mathematics and informatics
In 2005, Australian teams competed in the International Mathematical Olympiad and International Olympiad
in Informatics. The mathematics team, which travelled to Merida, Yucatan, Mexico, was particularly successful
with all team members taking a bronze medal in the upper half of the bronze medal range. The informatics
team competed in Novy Sacz, Poland, and one member won a bronze medal.
In 2006, the mathematics team travelled to Ljubljana, Slovenia and the Informatics team travelled to Merida,
Yucatan, Mexico.
Professor Peter Taylor, Executive Director of the Australian Mathematics Trust, which administers Australia’s
involvement in the International Mathe matical Olympiad, acknowledged the Australian Government’s
commitment to the Olympiads. Funding of $1.8 million has been provided over three years to support the
Australian Mathematics Trust and Australian Science Innovations as well as the teams representing Australia
at the Olympiads.
More information about the Australian Mathematics Trust can be found at: www.amt.edu.au
2000 Additional Targeted University Places
To strengthen Australia’s national skills base, $151 million was provided for 2000 additional targeted university places
commencing in 2002 with a priority on mathematics, science and information and communications technology.
The funding extension through Backing Australia’s Ability – Building our Future through Science and Innovation is providing
additional funding of $213.2 million over five years from 2006-07 to maintain the number of places.
Bids for places were assessed on the universities’ approaches to teaching and learning, whether these approaches were
designed to meet the needs of industry, and whether they would attract talented students to careers in science
and technology (see table for successful allocations). The places for 2005 will be ongoing.
Table 10: Backing Australia’s Ability 2000 additional targeted university places, 2002 to 2005
2002 2003 2004 2005
Charles Sturt University 60 105 139 164
Macquarie University 60 105 139 164
Southern Cross University 0 0 0 0
University of New England 70 123 162 191
University of New South Wales 100 175 231 273
University of Newcastle 0 0 0 0
University of Sydney 80 140 185 219
University of Technology Sydney 60 105 139 164
University of Western Sydney 20 35 46 55
University of Wollongong 100 175 231 273
Deakin University 60 105 139 164
La Trobe University 40 70 93 109
Monash University 100 175 231 273
Royal Melbourne Institute of Technology 0 0 0 0
Swinburne University of Technology 120 210 278 328
University of Ballarat 60 105 139 164
University of Melbourne 50 88 116 137
Victoria University of Technology 0 0 0 0
Central Queensland University 100 175 231 273
86 Backing Australia’s Ability

2002 2003 2004 2005
Griffith University 90 158 208 246
James Cook University 100 175 231 273
Queensland University of Technology 120 210 278 328
University of Queensland 100 175 231 273
University of Southern Queensland 10 18 23 27
University of the Sunshine Coast 0 0 0 0
Curtin University of Technology 90 158 208 246
Edith Cowan University 60 105 139 164
Murdoch University 0 0 0 0
University of Notre Dame Australia 50 88 116 137
University of Western Australia 70 123 162 191
Flinders University of South Australia 60 105 139 164
University of Adelaide 50 88 116 137
University of South Australia 55 96 127 150
Australian Maritime College 0 0 0 0
University of Tasmania 65 114 150 178
Batchelor Institute of Indigenous Tertiary Education 0 0 0 0
Northern Territory University 0 0 0 0
Australian National University 0 0 0 0
University of Canberra 0 0 0 0
Australian Catholic University 0 0 0 0
Total 2000 3500 4625 5469
The allocation came to its peak (in place numbers) in 2005 when the total number of places was estimated to be 5469.
Investing in research training
Research Training Scheme
The Research Training Scheme (RTS) provides block grants on a calendar year basis to eligible higher education
institutions to support research training for students undertaking doctorate and Masters degrees by research.
These students are exempt from paying student contribution amounts and tuition fees for units undertaken
as part of a higher degree by research course of study. The scheme aims to:
• enhance the quality of research training provision in Australia;
• improve the responsiveness of higher education providers to the needs of their research students;
• encourage higher education providers to develop their own research training profiles;
• ensure the relevance of research degree programmes to labour market requirements; and
• improve the efficiency and effectiveness of research training.
The scheme gives funding certainty to universities, rewards high performing universities and protects others
by ensuring that no university will lose more than 5% of RTS funding from one year to the next. RTS funding
rose from $552.2 million in the 2005 calendar year to $562.6 million in 2006.
More information about the RTS can be found at:
www.dest.gov.au/sectors/research_sector/programmes_funding/general_funding/rbgrants/
Chapter 2 - Initiatives for a dynamic national innovation system 87

Higher Education Loan Programme
The FEE-HELP loan scheme helps eligible students pay their tuition fees at an approved higher education
provider. The scheme is designed to help Australian citizens and holders of a permanent humanitarian visa to
take up a fee-paying place in an undergraduate or postgraduate course, and Australian citizens or permanent
residents to undertake bridging study for overseas-trained professionals.
FEE-HELP was introduced on 1 January 2005 as part of the Australian Government’s package of higher education
reforms, Our Universities: Backing Australia’s Future. It replaced the Postgraduate Education Loans Scheme, Open Learning
Deferred Payment Scheme and Bridging for Overseas-Trained Professionals Loan schemes, and significantly
expanded the availability of Australian Government loans to higher education students.
From 1 January 2007, eligible students can borrow up to $80,000 and $100,000 for medicine, dentistry and veterinary
science courses towards their tuition fees over their lifetime. These limits will be indexed annually and are substantially
higher than the limit that applied up to 2006.
Australian Postgraduate Awards
The Australian Postgraduate Awards (APA) programme aims to support postgraduate research training in the
higher education sector and provide financial support to postgraduate students of exceptional research promise
who undertake their higher degree by research at an eligible Australian higher education institution.
APA’s are available for a period of two years for a Masters by research degree or three years with a possible extension
of six months for a Doctorate by research degree. APA holders receive an annual stipend and may also be eligible
for other allowances.
Participating institutions are provided with funding for continuing awards and a notional number of new awards
each year. The allocation of awards to participating institutions reflects their overall research performance.
There are approximately 4500 students on APA scholarships at any given time. Many students receiving APA’s
are also funded through the Research Training Scheme.
In 2006, 1561 new awards were provided. In 2005, total funding for the scheme was $91.18 million. This increased
to $93.12 million in 2006.
From 2006, under the reform package Our Universities: Backing Australia’s Future, the number of new APA scholarships
awarded each year will be adjusted to accommodate population growth. This will ensure that postgraduate
research opportunities do not decrease on a per capita basis as the population grows.
More information about the APAs can be found at: www.dest.gov.au/sectors/research_sector/
programmes_funding/programme_categories/fellowships_awards_prizes/australian_
postgraduate_awards_scheme.htm
Endeavour International Postgraduate Research Scholarships
The Endeavour International Postgraduate Research Scholarships (Endeavour IPRS) programme was
established to maintain and develop international research linkages. It aims to attract top quality international
postgraduate students to areas of research strength in the Australian higher education sector and support
Australia’s research effort.
Endeavour IPRS are available to successful international applicants for a period of two years for a Masters by
research degree or three years for a Doctorate by research degree. The scholarship covers the student’s tuition
fees and health insurance premiums for the student and their dependants.
Each year, new scholarships are offered to a notional 330 eligible Australian higher education providers who
then implement their own selection of international student scholars in accordance with the Commonwealth
Scholarship Guidelines under the Higher Education Support Act (2003). The scholarships are allocated to higher
education institutions based on the provider’s performance in higher degree by research completions,
publications and research income.
In 2004, the most recent year for which data is available, there were 1165 Endeavour IPRS students studying in
Australia. The table below shows the regions from which the students came.
88 Backing Australia’s Ability

Table 11: Regional point of origin of Endeavour IPRS recipients, 2004
North-East Asia 230
South-East Asia 186
Americas 184
North-West Europe 182
South and Central Asia 175
Southern and Eastern Europe 87
Sub-Saharan Africa 59
North Africa and Middle-East 39
Oceania 12
No information on country 8
The table below indicates the fields of study in which the students were undertaking their higher degree
by research:
Table 12: Endeavour IPRS higher degree by research fields of study, 2004
Natural and physical sciences 329
Society and culture 250
Engineering and related technologies 229
Health 124
Agriculture, environment and related studies 69
Management and commerce 47
Information technology 34
Education 34
Architecture and building 26
Creative arts 23
In 2006, the total grant amount available for the Endeavour IPRS was $18.46 million. A total of $18.83 million
will be available for 2007. There are approximately 1100 students on Endeavour IPRS at any given time.
More information about the Endeavour IPRS can be found at: www.endeavour.dest.gov.au/
individual_awards/iprs.htm
Commercialisation Training Scheme
The Commercialisation Training Scheme (CTS) provides high quality research commercialisation training for
the next generation of Australian researchers to equip them with the skills necessary to bring ideas, inventions
and innovations to market. The CTS will provide increasing numbers of higher degree by research students
with an understanding of, and exposure to, the concepts and processes involved in the commercialisation of
research-based products and services.
The programme aims to:
• enable Australia’s next generation of researchers to better understand the commercial potential of research
and better plan research activities to achieve commercial benefit;
• enhance the career outcomes of higher degree by research students;
• provide a more highly skilled and valued research workforce for employers; and
• generate flow-on benefits to the broader Australian community through the enhanced delivery of innovative
research-based products and services.
Responsibility for implementing the CTS was transferred from the Australian Research Council to the
Department of Education, Science and Training in 2005, and development of the programme structure and
guidelines have been undertaken in consultation with the higher education sector. The CTS will provide
$5.3 million to higher education providers from 2007.
More information about the CTS can be found at: www.dest.gov.au/sectors/research_sector/policies_
issues_reviews/key_issues/commercialisation/Commercialisation.htm
Chapter 2 - Initiatives for a dynamic national innovation system 89

Fostering entrepreneurship and
awareness of science and innovation
National Innovation Awareness Strategy
– Science Connections Programme
The Science Connections Programme (SCOPE) is the
Australian Government’s science awareness component
of Backing Australia’s Ability – Building our Future through
Science and Innovation. Its objectives are to:
• increase awareness of the important roles that
science, technology and innovation play in ensur ing
the wellbeing of our society and the environmentally
sustainable growth of our economy;
• highlight the outstanding contributions to science
and science education made by our researchers
and science teachers;
• support nationally significant science outreach
programmes; and
• encourage young people to consider continuing
studies in science, mathematics and engineering
beyond the compulsory years of schooling, and to
consider entry into science-based careers.
Achievements in 2005-06 included:
• The award of the 2005 Prime Minister’s Prizes for
Science to five outstanding scientists and science
teachers. The major award, the Prime Minister’s
Prize for Science, was presented to Professor
David Boger for his contributions to the science of
fluid dynamics, including analyses of the flow
properties of a particular class of fluids now bearing
his name: Boger Fluids. Professor Boger’s science has
applications in the mining tail-ings industry, crop
spraying, and ink-jet printing.
• The presentation of the inaugural Len Basser
Award for Leadership in Science to a student of the
Professor Harry Messel International Science
School, held at the University of Sydney, in July
2005.
• National Science Week – a successful celebration
of science in August 2005.
• The participation of an increasing number of
schools in the University of Newcastle’s Science
and Engineering Challenge. The challenge reached
more than 300 schools in 2005, over 100 more than in
2004. More than 10 000 Year 10 students part icipated.
In the first detailed survey of the chal lenge’s impact,
nearly 200 students across 59 schools said that
participation had influenced their decision to
undertake physics or chemistry in Year 11.
The Questacon Smart Moves programme. Photo credits: Questacon
90 Backing Australia’s Ability

Highlights in 2006-07 have so far included National Science Week in August 2006, for which 45 National
Science Week projects were funded with $500 000 from the programme, planning for National Science Week’s
10 th birthday in August 2007, and preparations for the 2006 Prime Minister’s Prizes for Science (presented on
16 October).
Questacon – the National Science and Technology Centre: Smart Moves
Questacon Smart Moves is an awareness and education programme designed to raise the profile of science,
tech nology, innovation and related careers in regional and rural secondary schools. The main components of the
project are a far-reaching regional touring programme, a popular website and inspiring youth conferences.
Questacon Smart Moves has an extensive reach across regional Australia. By the end of June 2006, more than
297 000 students in all states and territories had participated in the regional and rural programme since its
inception in 2001.
An especially successful component is the yearly youth conference, known as the Questacon Smart Moves
Invention Convention. These events have been very successful at bringing together mentors and guest speakers
from all around Australia with talented young inventors from secondary schools. They give aspiring young
entrepreneurs the opportunity to learn new skills needed to further develop their inventions and to network
with established young entrepreneurs. Up to 30 students attend the convention each year.
Through a combination of face-to-face presentations in regional schools, online resources and a youth
conference, Questacon Smart Moves has an impressive record of knowledge diffusion and awareness. During
2005-06, the programme travelled extensively through regional and rural secondary schools in Queensland,
the Northern Territory, South Australia, Tasmania and New South Wales. During the year, a total of 371
schools were visited and 82 400 secondary students participated in the programme.
In addition to these students, there were 203 000 visitors to the Questacon Smart Moves website. In 2006-07,
under continuing funding from Backing Australia’s Ability – Building our Future through Science and Innovation, the
programme plans to reach schools in New South Wales, Western Australia, Queensland and South Australia.
Questacon Smart Moves has extensive linkages with a wide range of organisations and programmes in the
research, industry and higher education sectors. These include the CSIRO CREST Awards, the Sustainable Living
Challenge (University of NSW), Young Achievement Australia, the ABC (The New Inventors) and Engineers
Australia. Over 30 different organisations have supplied information on research, innovations and inspiring
examples of young entrepreneur’s success stories.
Student exit surveys and teacher opinions are gathered one month after participation. Results show 98% of
students and 94% of teachers are pleased with the programme and 99% of teachers state that it has had a
positive impact on their students.
More information about Questacon Smart Moves can be found at: www.smartmoves.questacon.edu.au
Gaining and retaining highly-skilled and qualified workers
Federation Fellowships
On 11 May 2006 the Minister for Education, Science and Training,
announced 25 new Federation Fellowships. Of the fellowships
awarded, five are to expatriate Australians who will leave international
organisations to return home, and two are to foreign nationals
who will bring their experience and talent to Australia. Four current
fellowship holders received their second fellowship. A listing of
Federation Fellowships awarded in 2006 is provided at Appendix 6.
First row l to r: Professor Mark Burry, Professor Guifre Vidal, Professor Andrew White, Minister Julie
Bishop, Dr Jamie Rossjohn, Professor Michael Parker. Second row l to r: Professor Graeme Turner,
Professor Terry Hughes, Professor Keith Nugent, Professor Hugh Possingham, Professor Timothy
Lindsey, Professor Christopher Goodnow, Professor Paul Haddad, Professor Geoffrey McFadden,
Professor Gordon Wallace. Photo credit: Photograph by Norman Plant.
Chapter 2 - Initiatives for a dynamic national innovation system 91

Skilled Immigration
Migration continues to provide highly qualified people for Australia’s labour force. In 2005-06, over 97 000
visas were granted under the Skill Stream, a 25% increase over 2004-05.
Migrants entering under the permanent skilled migration stream are given additional points and priority
processing where their occupation is on the Migration Occupations in Demand List (MODL) (occupations in
short supply). In 2005-06, there was a 500% increase over 2004-05 in the number of Skilled Independent and
Skilled Australian Sponsored migrants with occupations on the MODL.
In 2005-06, computing professionals made up 16% of principal applicants under the Skill Stream, and science,
building and engineering professionals and associate professionals made up a further 12%.
A May 2006 report by the Centre for Population and Urban Research at Monash University, Australia’s net gains from
international skilled movement, found that Australia’s net gain from international movement of skilled people has
nearly doubled since the end of the 20 th century (24 000 to 44 000). The gain is largely in professional occupations,
particularly building and engineering professionals (3500 gain), computing professionals (4200), medical
practitioners and nursing professionals (3000) and accountants (2800). The report is available at:
www.immi.gov.au/media/publications/pdf/aus_net_gais_int_kills_mnt_2004_05_.pdf
Professor Peter MacDonald and Jeremy Temple of the Australian National University have argued in their report
Complex problem solvers in the Australian economy that in jobs that require the most sophisticated technological
skills, older workers are not substitutes for young workers. This segment of the labour force is described as complex
problem solvers. The report shows that for Australia, ‘migration is a highly effective way of increasing the supply
of complex problem solver workers when the migration programme is selective of those with high skills’. The
report is available at:
www.immi.gov.au/media/publications/pdf/immigr_supplyof_%20complexproblems_
solversCPSDIMA.pdf
92 Backing Australia’s Ability

CHAPTER 3: National research priorities
The Prime Minister announced Australia’s National Research Priorities (NRPs) in December 2002 to focus
Australia’s research effort in areas that deliver significant social, economic or environmental benefits to Australia.
The priorities are broadly based, thematic and multi-disciplinary in scope and draw on many fields of research.
They are:
• An Environmentally Sustainable Australia;
• Promoting and Maintaining Good Health;
• Frontier Technologies for Building and Transforming Australian Industries; and
• Safeguarding Australia.
Australian Government research agencies and funding bodies implement the priorities by directing additional
resources to the priority areas to achieve greater scale and by exploring opportunities for collaboration.
An NRP Standing Committee has been established to assess the progress of Australian Government agencies
in implementing the NRP’s, to advise on progress or areas requiring improvement, and to report to the Australian
Government. Australia’s Chief Scientist, Dr Jim Peacock, chairs the committee. Other members include
Professor Henrique d’Assumpcao, Mr Terry Enright, Associate Professor Bob Beeton, Professor Suzanne
Cory, Professor Susan Rowley, Professor Brian Anderson and Professor Edwina Cornish.
The Committee over the next 12 months will further assess the progress of agencies in their implementation
of the priorities before reporting to the Australian Government.
The NRP’s have already had a positive impact in relation to the design and implementation of the Australian
Government’s National Collaborative Research Infrastructure Strategy (NCRIS). NCRIS will ensure that
Australia’s investment in research infrastructure is well targeted to enhance the science and innovation system’s
contributions to economic development, national security, social well-being and environmental sustainability.
Chapter 2, Part 1 provides more information on the NCRIS initiative.
This chapter examines some of the progress of Australian Government agencies in implementing the NRP’s in
2005-06. More information on the NRPs is available at: www.dest.gov.au/priorities.
PRIORITY 1 – An environmentally sustainable Australia
Water – a critical resource
Sewage and waste water treatment: The Australian Nuclear Science and Technology Organisation (ANSTO)
has developed innovative technology to make sewage and waste water clean enough to drink and to do it
inexpensively.
The newly patented technology could cut water use by 60% through a revolutionary membrane bioreactor that
eats waste matter and breathes air.
The self-perpetuating technology is cheap and can be used in a variety of sizes for houses, unit complexes or municipal
treatment plants. ANSTO made a working model the size of a fridge freezer that can be used in a house to recycle
waste. The secret of this technology is in the unique membrane.
Chapter 3 - National research priorities 93

ANSTO’s Dr Tony Taylor with the membrane bioreactor which cleans waste
water. The technology won best new invention on ABC TV’s The New
Inventors programme in October 2006.
Dr Taylor in his laboratory at ANSTO. The technology has applications for water
treatment, aquaculture and antibiotic production.
Photo credits: ANSTO
Interactive CD enhances understanding: The Australian Institute of Marine Science (AIMS) coral reef
scientists and oceanographers are helping regional communities to better understand how runoff, water quality
and reefs are connected.
The institute has contributed to the Douglas Shire Water Quality Improvement Project by producing a baseline
description of the coral reefs and the water quality in the shire’s coastal waters.
The project was established to assist the Douglas Shire and its residents maintain the health of regional marine
habitats through land use practices that minimise pollutants onto the Great Barrier Reef. Measurements such
as coral cover and levels of nutrients and pesticides in the water will be used to assess water quality and the
overall health of local reefs over time.
The report from this activity is now available to the local
community in an interactive web page-style CD that provides
a summary of the current state of coastal water quality and
the status of coral reefs in the region. The CD also presents
historical data to show the extent of natural variability in reef
coral cover and water quality, using information from past
reefs to understand current and future trends.
This interactive CD aims to educate regional communities on the
connectedness of terrestrial run-off, water quality and coral reefs.
Photo credits: AIMS
The CD will be distributed to regional libraries, schools,
extension offices and community-based natural resource
management groups. It emphasises the close links between
regional rainfall, freshwater runoff and water quality in
coastal waters bordering the shire.
With a mouse-click readers may select and view pictures and videos of the reefs as well as graphical data on changes
in reef coral cover and crown-of-thorns starfish outbreaks.
Reclaiming water: International Science Linkages (ISL) programme funding has enabled Australian researchers
with expertise in water recycling, hydrogeology and groundwater management to join with researchers and industry
from 12 countries in the European Union’s Reclaim Water project.
The Stormwater Aquifer Storage Transfer and Recovery (ASTR) for a Potable Urban Water Supply project received
funding in October 2005 through the programme.
94 Backing Australia’s Ability

Figure 1 - Aquifer Storage and Recovery Well (Parafield,
South Australia).
Photo credits: ISL
Figure 2 - Modelling output of injection and
recovery well location and concurrent injectant
movement (FEFLOW model) Reference: CSIRO
Land and Water Technical Report 27/04.
Figure 3 - Schematic diagram showing the
Aquifer Storage Transfer and Recovery process
whereby the injection and recovery wells are
separated to allow for treatment and residence
time of the injectant in the aquifer.
ASTR aims to recover water at a drinking water standard from stormwater and involves filtering the water
through an engineered wetland, then pumping it into an aquifer. The scheme involves using separate injection
and recovery wells to extend the residence time and enhance passive treatment within the aquifer, resulting in
improved water quality. The ASTR concept is a world first and ISL funding has allowed Australian researchers
to demonstrate the significance of this technology to their European partners.
Through the ASTR and Reclaim Water projects, advances are being made in the fields of water recycling, water
treatment technology, groundwater assessment, water quality analytical techniques, hydraulic and biochemical
modelling, hydrogeology and risk-based management. Such advances can benefit rural water suppliers and
recycling schemes both in Australia and internationally.
Transforming existing industries
Boosting Australia’s prawn and salmon productivity: Collaboration between the Commonwealth Scientific
and Industrial Research Organisation (CSIRO), researchers and industry is helping to boost Australia’s farmed
prawn and Atlantic salmon production from Queensland’s sunny Gold Coast to the cooler waters off Tasmania.
Research by the Food Futures Flagship into black tiger prawn domestication and Atlantic salmon selective breeding
research is allowing these industries to improve the growth, health and harvest-quality of their livestock by up to
10% a generation.
In May 2006, Gold Coast Marine Aquaculture harvested the world’s first commercial crop of black tiger
prawns grown from parent stocks that were bred and matured in captivity. The 50-tonne harvest is a significant
step towards achieving a long-standing goal – to reduce industry reliance on unpredictable wild brood stock.
This development has given the industry confidence to invest in further research
to genetically improve Australian prawn stocks. The Atlantic salmon selective breeding
programme is also a collaborative project. In a five-year research partnership
between the Flagship and Salmon Enterprises of Tasmania, the programme aims to
improve production efficiency and product quality to help meet changing market
and production needs.
Progeny from the breeding programme will be provided to Tasmanian salmon
growers as smolts for commercial production and to hatcheries as eggs and young
fish for growing into brood stock. Tasmania’s Atlantic salmon industry can expect
$20 million in benefits when the first progeny are harvested in 2009-10.
Radar units cut down time and boost safety: A remotely controlled device that
can see through dust and water vapour in huge underground voids will make mines
safer, while reducing environmental impact and running costs.
Scientists are working with industry
partners to improve the growth, health
and harvest quality of Australian-farmed
black tiger prawns and Atlantic salmon.
Photo credits: David McClenaghan
Chapter 3 - National research priorities 95

The millimetre wave radar stope monitor, developed by CRCMining, enables engineers to monitor the backfilling
of stopes — skyscraper-sized cavities up to 300 metres deep, with diameters of up to 45 metres.
The stope monitor fine-tunes the operation from a safe distance. In a typical mine that uses the long hole open stope
mining principle, up to 1.3 million tonnes of ore are extracted, and the resulting stope is backfilled before miners
move into neighbouring rock.
Before the stope monitor, engineers had to stop the backfilling process periodically and wait for the dust and
vapour to clear before they could use laser monitoring. Personnel also had to venture into the dangerous area
around the stope during the downtime.
The wave radar stope monitor comprises a hermetically sealed radar and a mirror scanner and uses the characteristics
of signals reflected from the floor and walls of the stope to generate a 3D snapshot of the void as it fills.
Engineers display the information on a remote computer, using the images to optimise the strength of the fill
by altering the proportions of the material in it and adjusting the packing. They can use more waste rock, cutting
costs and cleaning up the environment around the mine.
Mining industry partner, WMC Resources estimates that the prototype monitor trialled at the Olympic Dam mine
could save it millions of dollars a year.
Ecosystem-based monitoring of the Great Barrier Reef: The Great Barrier Reef Marine Park Authority
(GBRMPA) continues to take a multi-dimensional approach to monitoring different habitats throughout the
Great Barrier Reef Marine Park as well as socio-economic effects.
A component of this monitoring was workshopped by scientific and management agencies with interests in
the marine park, who discussed a broad range of ideas to monitor the effects of the network of no-take areas
resulting from the 2004 rezoning of the marine park. They proposed the focus should be on species targeted
by line fishing and also prey and benthic species.
Underwater visual census was chosen as the preferred method of monitoring and seven criteria were used to
choose candidate pairs of blue and new-green (no-take) offshore reefs in five regions. A further set of sites, on
inshore fringing blue and new-green reefs was chosen in addition to sites already monitored. The guiding premise
was that the project had to address management needs while being scientifically robust.
This project is vital to marine park management, as it is imperative for the GBRMPA to know how its management
strategies are performing. It also offers scientists an opportunity to investigate effects of no-take areas on a scale
never seen before.
Initial results indicate that the effects of zoning, at least for coral trout, are exceeding expectations in all regions
monitored. This is encouraging as it will ultimately have benefits for tourism and fishing industries that depend
on a healthy and resilient Great Barrier Reef Marine Park.
Cleaning-up Australian’s minerals industry: Australia’s minerals industry is expected to become cleaner and
more efficient as a result of a collaboration funded under the Australian Research Council’s (ARC) Linkage
Projects scheme.
Four high-performing research centres at the universities of South Australia, Melbourne, Newcastle and
Queensland will contribute to a $22.6 million research programme to be conducted by the Australian Mineral
Science Research Institute. The programme will address a number of problems of critical importance to Australia’s
major export industry.
Issues such as energy-efficient methods of extracting minerals from the earth, improved water use and waste
management practices and new methods of minerals processing will be explored.
96 Backing Australia’s Ability

Overcoming soil loss, salinity and acidity
Coral gives new insight into changing ocean acidity: The rising level of greenhouse gases in the atmosphere
is changing the acidity of oceanic waters.
Researchers from AIMS and the Australian National University have obtained the first historical insight into
changes in ocean acidity and coral growth.
The scientists analysed a core sample from a 300-year-old massive coral on Flinders Reef in the western Coral Sea.
By studying the growth rings in the coral, they were able to measure its past growth rates and compare these
with levels of boron isotopes, which provide a marker for ocean acidity.
Their results, published in the journal Science, showed that ocean acidity rose and fell approximately every 55 years
coinciding with periodic fluctuations in global climate.
The relatively large variations in seawater pH (a measure of acidity) experienced at Flinders Reef, suggest that coral
reefs may be resilient to the shorter-term effects of ocean acidification. However, in the coming decades many
reefs are likely to experience unnaturally low pH levels.
Improved understanding of the response of coral reefs to increased acidity and the long-term impacts of ocean
acidification will be important in predicting the effects of climate change on coral reefs and other marine communities.
International collaborations to overcome environmental challenges: The Australian Centre for International
Agricultural Research (ACIAR) has entered research partnerships with neighbouring countries that experience
similar environmental challenges as Australia.
Water and soil management techniques have continued to receive high levels of attention over the last year. Outputs
generated include improved understanding of institutional arrangements for water management and more
efficient allocation of scarce irrigation water to crops.
Research partnerships have contributed to joint understanding of soil acidity and salinity and approaches to revegetation
and reduction of degradation.
Current research in the area of a sustainable use of Australia’s biodiversity includes efforts to improve productivity
of peas and faba beans in the drier parts of China which involve a focus on common interests by breeders,
pathologists and genetic resource specialists. Their major goal is to develop cultivars with multiple resistances
to disease and abiotic stress such as drought.
Extensive collecting expeditions have been under way in Qinghai (spring sown) and Yunan (autumn sown) provinces
for landraces of pea and faba bean traditionally grown by the farmers. Germplasm exchanges continued and Australia
has sent elite breeding material to China. In return Australia received collections of landraces and a core collection
of peas.
Reducing and capturing emissions in transport and energy generation
Driving greener: In March 2006, the Bureau of Transport and Regional Economics (BTRE) released its paper
Greenhouse gas emissions from Australian transport: base case projections to 2020.
The report provides projections for carbon dioxide emissions out to 2020 and forecasts that emissions will continue
to increase by about 1.6% a year over this period. This work will assist the government to assess the greenhouse
impact of the Australian transport sector and the likely progress in meeting greenhouse gas abatement objectives.
The report shows a significant contributor to environmental pollution in Australia comes from land based
transport. Hence, growth in Australia’s population places pressure on national infrastructure and the need to
manage growth in both traffic numbers and greenhouse emissions.
During 2005-06, the Bureau commenced a number of research projects in the area of road traffic congestion, including
lessons from overseas, with congestion charging. The Bureau also assisted the Council of Australian Governments
(COAG) in its review of congestion management in Australia, for reporting to the first COAG meeting in 2007.
Chapter 3 - National research priorities 97

Sustainable use of Australia’s biodiversity
Managing ancient cultural land – the Canning Stock Route: Custodians of one of the largest cultural areas
and natural desert landscapes in Australia, the Canning Stock Route, have sought assistance to develop an integrated
management plan for the route in the face of a rapid and uncontrolled increase in tourism.
The Australian Institute of Aboriginal and Torres Straight Islander Studies (AIATSIS) is developing a major ARC
Linkage Project in collaboration with Ngaanyatjarra Land Council and seven other state and federal industry
partners.
The stock route runs for 1800 kilometres between Wiluna and Halls Creek. Increased four-wheel drive access to
culturally important sites potentially endangers the integrity of unique examples of Aboriginal art and challenges
the sustainability of the environments where they are found.
The custodians of the country have asked for assistance with a management plan. They also want to see the
implementation of a ranger scheme, training initiatives, a permit system and effective site protection. The project
aims to address the need for management and interpretation of Aboriginal sites (especially art sites and Dreaming places)
along the route, including recognition that the land is Aboriginal-held under a consent determination of native title.
Land use history recovered from coral cores: Scientists at AIMS and James Cook University have discovered
a new use for the oceanographic information that can be extracted from core samples of massive reef corals.
To date, coral cores have been used to investigate changes in climate and to understand how the health of coral
reefs has been altered by human activities over time. New research has detected geochemical evidence of early
European settlement in coral cores from near-shore reefs.
Unique trace metals found in soil and released by land clearing primarily for cattle were transported to reefs through
local waterways. The quantity of specific metals (including Barium and Yttrium) found in the coral cores fluctuates
closely with cattle numbers from the region’s grazing industry and provides some of the first chemical evidence
of agricultural impacts in North Queensland.
The coral geochemical record of the element manganese documents a more complicated history of rapid
ecosystem changes caused by the introduction of sheep into north-eastern Australia. The coral cores provide
evidence of the sheep rapidly reworking and removing the manganese-rich topsoil which had accumulated over
several thousand years of regular brush burning by Australia’s Indigenous population.
The collaborative study supports an earlier finding that sediment exports to the Great Barrier Reef from the
Burdekin River catchment increased four to five-fold soon after the arrival of Europeans and more specifically,
the presence of livestock.
This research presents a biological record of the effect of humans and livestock on the water quality of the Great
Barrier Reef and its catchment. Data from coral cores is helping scientists to understand the health of the reef
over time and to predict future impacts of human activities.
Foreign fishing depletes Australian shark stocks: Illegal fishing is one of the most severe problems currently
affecting world fisheries and has dramatically increased in Australia’s fishing zones particularly in northern
Australia. The main target of illegal fishing in this region is shark, driven by demand for shark fin, which is
increasing exponentially.
Hundreds of fishermen are arrested each year in northern Australian waters for illegal possession of shark fin.
The fishery is becoming increasingly sophisticated with nets replacing long lines and electronic navigation
systems becoming commonplace.
An AIMS research initiative, supported by the Departments of the Environment and Heritage, and Agriculture,
Fisheries and Forestry, has shown a striking difference in the abundance and species richness of sharks on fished
and unfished reefs in the productive oceanic shoals of northern Australia.
Sharks were found to be anywhere from 17 to four times less abundant at fished reefs. Of particular significance was the
fact that the sharks considered most valuable for the fin trade (Silvertip Whalers Carcharhinus albimarginatus and
Scalloped Hammerheads Sphyrna lewini) have been virtually eradicated from the northern reefs accessed by illegal
fishermen.
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The next step is to quantify the catch of illegal fishermen through
analysis of the product aboard boats seized by the Australian
Customs Service and the Royal Australian Navy. AIMS scientists
are using fin measurements and genetic analyses to identify the
sizes and types of sharks being targeted.
Research has also begun to analyse the catches of our own domestic
shark fishery using a mark-recapture approach, funded by the
ARC and Australian commercial shark fishermen. This work will
look at catch rates to ensure that the domestic fishery does not
exceed sustainable levels for shark populations.
Documenting our biodiversity: The Australian Biological Resources
Study (ABRS) funds taxonomic and biogeographic research and
training that leads to the scientific documentation of Australia’s
biodiversity. This work is necessary for the conservation and
sustainable use of Australia’s biodiversity.
Illegal fishing is devastating shark populations in Australian
waters. Photo credit: M. Cappo, AIMS
Taxonomic investigations during the year included research into such diverse biota as zooxanthellae
(microalgae), diatoms, dino flagellates, pompilidae (spider-hunting wasps) lace bugs, aphelenchida nematodes (an
issue in quarantine), hylid frogs, orchids and smut fungi (causing diseases particularly to cereals and native
grasses). Investigations have also gathered new information about bêche-de-mer, or sea cucumbers, the focus
of a commercial industry in northern Australia.
Research in these groups will contribute to future publications such as Fungi of Australia, Algae of Australia and Flora
of Australia and online sources of information including Flora of Australia online and the Australian faunal directory.
ABRS will also make much of this information available through its Australian Biodiversity Information Facility
data portal. This portal provides real-time access to a wide range of biodiversity data held and maintained by
individuals and institutions throughout Australia.
Developing deep earth resources
Centre of Excellence in Ore Deposits: Australia’s mining industry is facing a two-fold challenge — to find new
ore deposits and to mine them with maximum efficiency and minimal impact on the environment. These challenges
demand a new generation of ore deposit research tailored specifically for the Australian context.
The ARC’s Centre of Excellence in Ore Deposits is a collaboration between universities and key companies in the
mining industry. The centre is playing a leading role in mineral exploration-related research in new areas critical
to the growth of the industry.
Innovative fundamental and applied team-based research on where ore deposits occur, how they form and
their deep earth signatures is expected to give Australia’s minerals industry a new scientific framework in which to
search for ore. The centre is responding to this recognised need with a challenging programme of multidisciplinary
research, supported by the latest technologies in ore deposit location, formation, discovery and recovery.
Photo credits: ARC Centre of Excellence ore Deposits.
Listening in: Kevin Davey installing accelerometer modules
on a production-scale SAG mill. Photo credits: David Barker
A network of marine sensors will be deployed
around the Great Barrier Reef, allowing scientists
to obtain real-time measurements of oceanic
conditions. Photo credit: T. Simmonds, AIMS
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New techniques assist exploration companies: Techniques developed by CSIRO Petroleum are revealing
in detail the migration of oil into reservoirs, helping exploration companies to better manage risk when drilling
exploration wells for gas and oil.
The fluid history analysis techniques are finding global acceptance as seen by their widespread use already in
south-east Asia, licences sold to major international petroleum companies and the adoption of the analysis
techniques by the major petroleum companies in Australia.
The techniques reveal – in previously unseen detail – the geochemical development and movement history of
hydrocarbons in sedimentary basins, from the early generation of hydrocarbons in deeply buried organic
matter through to present day petroleum accumulations. The techniques were devised in response to discussions
and suggestions from geoscientists and executives in oil exploration companies.
The techniques analyse samples of oil preserved within mineral grains that are retained when the reservoir fluid
changes to gas or water. These microscopic samples are not visible at the well site and are investigated in the laboratory
using microscopy, spectroscopy and geochemistry.
CSIRO is also researching ways to increase the level of detail that can be revealed using fluid history analysis methods,
in particular to investigate features such as reservoir fluid properties and fluid compartments in reservoirs.
Responding to climate change and variability
Cutting edge technology for coral reef monitoring: Scientists around the world are keeping a close eye on
corals with climate change predicted to heavily impact coral reefs. In March 2006, the AIMS hosted a workshop
for the Coral Reef Environmental Observatory Network to facilitate the development and deployment of an
environmental monitoring network for the Great Barrier Reef.
The network is a global collaboration of scientists and engineers designing and building sensor networks for
observing biophysical conditions in the tropical marine environment.
One hundred sensors were primed and tested by AIMS before being deployed on the reef. In the first stage of
the project, sensors will be installed across an area of 400 square kilometres off Townsville and will link into
a global monitoring system. The sensors will transmit digital data from the reef back to AIMS.
The network is also collaborating with international scientists to develop sensors in French Polynesia, Taiwan
and the Florida Keys.
Analysing Perth’s water options: Perth’s demand for water is growing at the
same time that the climate appears to be getting hotter and drier, resulting in an
urgent need to develop new water sources, increase recycling and better manage
consumption.
It is a significant scientific challenge – and one that has been taken up by the
CSIRO through its Water for a Healthy Country Flagship. In collaboration with
the Western Australian Government, the flagship has undertaken a wholeof-system
review of existing and potential water resources for the region and
also detailed future demand for drinking water and non-potable water.
The research found that the diversity of water sources provides the region
with a resilience that will help it to adapt to climate change. In addition, the
study has found that the groundwater reserves in the Perth Basin represent
a substantial water resource, which could help meet future water needs.
Water for a Healthy Country team member,
Simon Higginson, collects a sample of recycled
water from the trial site before analysing in the
laboratory. Photo credits: David McClenaghan
The flagship has also trialled a system known as Managed Aquifer Recharge in
which treated wastewater is returned to the underground aquifer where it is
biologically cleaned by natural processes (essentially the absence of oxygen in
an aquifer environment) and can subsequently be reused for irrigating parks
and gardens and for horticulture. The research has shown that up to 100
gigalitres of water could be returned to Perth’s water supply in this way.
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Many of these Keppel Island corals which bleached in 2005 are now on the road to recovery thanks to a unique ability to adapt to changing temperatures. Photo
credits: R. Berkelmans, AIMS
What makes Keppel Corals more resilient: The warmest year in the Australian instrumental record was 2005,
with high temperatures throughout the year leading to initial summer water temperatures two degrees Celsius
above average. Extensive cloud cover and heavy rain in January 2006 suppressed temperatures long enough
to prevent coral bleaching on most of the Great Barrier Reef, except around the Keppel Islands where 63 to
100% of corals bleached.
AIMS scientists investigated the Keppel bleaching event which occurred up to a month earlier than events
seen in 1998 and 2002. During these earlier two bleaching events, almost every coral in the Keppels bleached.
Most recovered three to six months later, revealing a remarkable resilience not seen at other locations on the
Great Barrier Reef.
Research in the Keppel Islands is showing that corals in this area have an ability to quickly change their algal
symbionts (called zooxanthellae). The coral’s ability to adapt by altering their zooxanthellae allows them to endure
greater temperature fluctuations as different types of algae are better suited to varying thermal conditions.
Corals in the Keppels also grow faster than their northern counterparts and have an ability to store more fats.
This may be at least part of the reason why the Keppel corals were able to bounce back from a heat wave in
2002 that had adverse consequences for other regions.
Climate research on the Amery Ice Shelf: Antarctic ice shelves are important components of the climate
system. Basal melting and freezing processes can substantially modify large water masses circulating in the ocean
cavities beneath them. Significant collapse of ice shelves may lead to accelerated discharge of continental ice
with direct impact on global sea level variations.
The Australian Government Antarctic Division is undertaking the Amery Ice Shelf Ocean Research Project,
which aims to investigate interaction between the 60 000 square kilometre floating Amery Ice Shelf and its inland
Lambert Glacier drainage basin, with an area of 1 550 000 square kilometres. The Lambert is the largest
glacier-ice shelf system in East Antarctica.
Chapter 3 - National research priorities 101

Pushing the heater bank used to run the hot
water drill onto the loading ramp of the aircraft.
Glaciologists examining a fresh ice core from the borehole.
Glaciologists preparing the hose winding cradle.
Photo credits: Mike Craven, Australian Government
Antarctic Division
During 2005-06, research continued with the completion of two further bore holes through the Amery Ice Shelf.
Both holes (722 and 603 metres deep respectively) were instrumented with thermistors and oceanographic sensors,
which revealed details of the ice shelf-ocean interaction and the crystal structure of reforming marine ice.
Samples from the sea floor underneath the ice were extracted for examination of past glacial events in
partnership with Geoscience Australia. Initial photographic analysis of the cavity beneath the ice revealed the
presence of Antarctic krill and other invertebrates. This was an unexpected observation given the holes were more
than 150 kilometres back from the front edge of the ice shelf and open water.
PRIORITY 2 – Promoting and maintaining good health
A healthy start to life
Keeping kids on track – developing the resilience of Aboriginal students: Indicators of both education
and health demonstrate that Indigenous children in Australia fare much worse than non-Indigenous children.
Keeping kids on track is a five-year Curtin University of Technology research project funded by the National
Health and Medical Research Council (NHMRC).
The project aims to build Aboriginal and Torres Strait Islander children’s capacity to cope with life’s challenges
and promote resilience through social and emotional skill development, cognitive development, community
engagement and appropriate health provision.
The research project focuses on students in Years 6 and 7, and continues to monitor them until the end of
compulsory schooling (Year 10). During the transition period from primary to high school, many Indigenous
students lose the will to strive and drop out of school. High rates of substance abuse can become a serious
concern, and self-harming behaviours have become more common among Indigenous adolescents. Pregnancy
also often interrupts potential academic and work careers of Indigenous teenagers.
Keeping kids on track focuses on developing and promoting
resilience and well-being during childhood and adolescence by
addressing life change issues related to this period of transition.
The students participate in activities designed to enhance
cognitive development and social and emotional well-being,
and they have regular medical examinations to ensure sound
physical and mental health.
Researchers with Keeping Kids on Track project – L to R: Professor
Neil Thomson, Ms Sandra Rogers, Dr Ann Galloway and Professor
Gary Partington. Photo credits: NHMRC
Through quantitative and qualitative measures, the project
documents the educational, social and health outcomes
achieved by the children, and the principles and methodology
followed. This results in a robust evidence-based model
that can be implemented in other settings.
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Ageing well, ageing productively
Modifying workplace practices for older workers:
The proportion of the Australian population aged 65
years and over has risen steadily over the past two
decades and is projected to rise further over the next
50 years. A popular response to increased longevity is
to suggest that older workers should work longer.
Working longer involves changes to established
policies, practices, and institutions which are currently
built around retiring earlier.
Working longer: policy reforms and practice innovations is a
five-year University of New South Wales research project
jointly funded by the NHMRC and ARC. The project
will fore cast demographic and health transition in
Australia and develop the capacity to analyse the likely
economic and workplace adjustments that population
ageing will generate.
The research project will examine the extent to which
working longer is an appropriate response to this transition
and analyse how the labour market for older
workers might evolve. It will take into account individual
circumstances such as health, financial status, dependant
care and institutional practices including age discrimination,
employment conditions, work organisation
as well as regulatory and policy impacts.
Encouraging a more vibrant labour market for older workers by
adapting workplace practices. Photo credits: NHMRC
The overall objective of the project is to develop a
multi-disciplinary knowledge base to inform integrated
policy and institutional (or practice) improvement in
the labour market for the elderly. It will contribute to
improved institutional and policy frameworks within
which households and firms modify work practices
and overcome policy and institutional constraints,
thereby encouraging a more vibrant labour market for
older workers.
Easing the hard swallow: A serious and potentially
fatal swallowing condition is being eased by the development
of a technology that combines a clever application
of physics and modern telecommunications.
CSIRO’s catheter is barely three millimetres in diameter and contains a series
of optical-fibre pressure sensors which measure the waves of pressure when
the patient swallows. Photo credits: David McCleanaghan
Using fibre optics and micro-jointing, CSIRO researchers are working with doctors at the Adelaide Women’s
and Children’s Hospital to help better understand and treat the condition known as dysphagia.
Dysphagia affects 5% of the population and although it is most common among small children and recovering
stroke victims, it can affect anyone with impaired muscular function. It can lead to malnutrition, lung inflammation
from inhaling foreign material, choking or death.
Researchers have developed a diagnostic tool that can detect differences in pressure along a patient’s oesophagus
when swallowing. This information is used to construct a profile of the swallowing action, allowing doctors to
more accurately identify what is causing the problem.
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The diagnostic tool uses a unique application of optical fibre to produce a catheter barely three millimetres in
diameter. The catheter contains a series of optical-fibre pressure sensors, which use some smart physics and modern
telecommunications technology to measure the waves of pressure when the patient swallows. This creates a
detailed representation of the pressure wave travelling down the oesophagus.
Although the technology is no stranger to the telecommunications world – it forms the basis for nearly every
modern telecommunications system in use today – its use in the medical world is novel. The low manufacturing
costs of the fibre optic catheter will allow it to be a disposable item, which reduces the risk of cross-contamination
and makes the diagnostic process more widely available.
Preventative health care
Building better health for Indigenous prisoners: The Winnunga Nimmityjah Aboriginal Health Service
and AIATSIS health team sees the opportunity of a new jail in the Australian Capital Territory (ACT) as a chance
to develop a best practice holistic model of health care delivery to Aboriginal and Torres Strait Islander inmates.
Aboriginal and Torres Strait Islander people in custody and their families are exposed to health risks additional
to those endured by other Aboriginal and Torres Strait Islander peoples.
The ACT does not currently have its own prison and people convicted in the territory are sent to prisons elsewhere.
But a decision by the territory’s government to build a prison has prompted Winnunga to begin this research
project in collaboration with AIATSIS.
Winnunga currently provides a health service to Aboriginal and Torres Strait Islander inmates of the Goulburn
and Cooma jails, which are both in New South Wales, as well as the Belconnen Remand Centre and Quamby
Youth Detention Centre, which are in the ACT.
This research project’s holistic model of health care will incorporate the health and well-being of inmates,
their families, and the workers providing the health care.
SunSmart UV alerts: Australia has the highest incidence of skin cancer in the world. The SunSmart UV alert
service, which contributes to the priority goal of Preventive Healthcare, encourages awareness of the health risks
from exposure to ultraviolet radiation, and gives people a measure to decide if protective action is warranted.
The alert, based on the Global Solar UV Index from the World Health Organization, was developed by the
Bureau of Meteorology Research Centre (BMRC), in partnership with the Cancer Council of Australia and
the Australian Radiation Protection and Nuclear Safety Agency.
Sunsmart UV alert.Photo credits: BoM
A SunSmart UV alert is issued by the bureau when the UV Index reaches 3,
together with the times that the index stays at that level or above throughout
the day. At this level, UV radiation can damage skin and lead to skin cancer. The
alerts, available for many Australian cities and towns, are reported in newspapers,
some television and radio forecasts and are available in the forecasts issued
on the bureau website.
Molecular structure of foods: Understanding the structure of ingredients that go into food and aspects of
food safety will provide Australian scientists with the ability to design new foods with improved taste, texture
and health-improving qualities.
A new research collaboration between ANSTO and CSIRO is seeking to determine the molecular structure
and function of foods we eat.
ANSTO will use advanced neutron scattering techniques to examine complex food structures, and determine
how these are altered by food processing, and how such modifications affect nutrition and long-term health.
Understanding the physical and biochemical properties will enable food researchers and manufacturers to
model, predict and control the behaviour of raw materials and ingredients. This knowledge will assist in
developing foods with specific health benefits.
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Strengthening Australia’s social and
economic fabric
Assisting regions to manage their future: The
regional research team at the BTRE has continued
its research into regional Australia and published
a fourth topic on social capital in the Focus on regions
series of information papers in December 2005.
The papers are designed to assist regional Australians
manage their futures and include:
• Industry structures – examines industry
structures and trends at a regional level
and explores the link between industry
struc ture and regional economic growth.
Looking to the future of food - front: ANSTO’s Dr Elliot Gilbert and CSIRO’s Dr Peter
Lillford. Back: CSIRO Group Executive for Agribusiness, Dr Alastair Robertson, and
ANSTO Executive Director, Dr Ian Smith.Photo credits: ANSTO
• Education skills and qualifications – analyses a range of statistics about skills and qualification trends
in Australia’s regions.
• Taxable income – makes a strong case for adopting taxable income as the best available indicator of
economic activity in Australia’s regions.
• Social capital – government initiatives to enhance social capital are already in place in selected communities
and there is a growing awareness of the potential relevance of social capital to a wide range of social
objectives.
These information papers are accompanied by databases, which underpin the research and provide policy
practitioners with valuable information to achieve better health and well-being outcomes in regional Australia.
Further research is being undertaken on welfare dependency in Australia’s regions.
Growing Up in Australia: Wave 2 of Growing Up in Australia: the Longitudinal Study of Australian Children (LSAC) is
underway. Across the country, interviewers from the Australian Bureau of Statistics have started contacting the
10 000 families who took part in the study for the first time two years ago. With wave 2 successfully in the field,
bureau staff are working with the design team members to develop proposals for wave 3 content.
LSAC represents a unique dataset that will benefit Australian children, families and communities in this and
subsequent generations. The January 2006 edition of Family matters included a set of the first articles based on
wave 1 data, and it has proved a rich source of descriptive and comparative data for Australian Institute of Family
Studies staff and external users.
The data are available to researchers and there is widespread demand for use of this unique set of information. The
extent of interest from university and other researchers in the first wave of data from LSAC is evidence of their
value, timeliness and relevance.
PRIORITY 3 – Frontier technologies for building and transforming Australian industries
Breakthrough science
Thinking systems: New kinds of communication between humans and machines could be possible through
cross-disciplinary research that brings together neuroscience, artificial intelligence and computer science.
The ARC, in collaboration with the NHMRC, is funding three projects awarded to researchers at the University
of New South Wales, the University of Queensland and the University of Western Sydney.
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The researchers anticipate that the projects will lead to the development of a new generation of intelligent
machines, robots and information systems, and keep Australia at the forefront of an internationally competitively
area of increasing importance.
The potential applications of the research are wide-ranging and ultimately likely to have a positive impact on
the health and quality of life of many Australians.
The benefits of the research are expected to include:
• applications for use in treating human disease associated with learning dysfunction;
• new kinds of communication between humans and machines;
• aids and prostheses for the disabled, the hearing-impaired, the elderly and children with learning difficulties;
• new kinds of animation in new media, film and games; and
• novel prosthetic limb design and rehabilitation strategies for stroke patients.
Discovery of the first known double pulsar: Star gazing with huge radio telescopes has been a specialty of
CSIRO for decades so it came as no surprise when the Parkes Radio Telescope in New South Wales played a
pivotal role in a one-of-a-kind discovery.
Astronomers from the UK, Italy and the US joined their Australian counterparts to identify the only double pulsar
system from more than 1400 pulsars found in the last 35 years.
A pulsar is the collapsed core of a massive star that has ended its life in a supernova explosion. Weighing more
than our sun, yet only 20 kilometres across, these incredibly dense objects produce beams of radio waves that
sweep around round the sky like lighthouse beams, often at hundreds of times a second.
Radio telescopes receive a regular train of pulses as the beam repeatedly sweeps across the Earth.
The twin pulsars lie almost 2000 light years away in our galaxy and are 800 000 kilometres apart, or about twice the
distance between the Earth and moon. They orbit each other every 2.4 hours, which makes them some of the
fastest moving stars known.
The discovery was made using the powerful new multibeam receiver at Parkes, New South Wales.
Frontier technologies
Nanotechnology: Over the next decade nanotechnology is expected to be integrated into products worth
US$2.6 trillion worldwide, making nanotechnology as influential in the 21st century as information technology
was in the 20th century.
Following a report to PMSEIC on nanotechnology in March 2005, a small taskforce within the Department of
Industry, Tourism and Resources was established from July 2005 to examine options for a national
nanotechnology strategy across the Federal and State Governments by 30 June 2006.
The taskforce Options Report recommends an integrated package of nine elements: (1) establish a dedicated
federal office responsible for developing and coordinating the implementation of a national nanotechnology
strategy (modelled on Biotechnology Australia); (2) health, safety and environmental (HSE) issues; (3) community
awareness and public engagement; (4) metrology and standards (involving the National Measurement Institute);
(5) coordination of whole of government activities; (6) international cooperation; (7) industry infrastructure; (8)
industry development; and the (9) commercialisation and application of nanotechnology research.
As at December 2006, the Government’s response to the taskforce Options Report was under consideration.
The report can be viewed at: www.industry.gov.au/nano
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New national solar energy centre: The first stage in developing
a new energy source for Australian industry is being trialled in
Newcastle at the National Solar Energy Centre.
The $5.3 million centre opened in March 2006 and showcases
solar thermal technologies such as the innovative SolarGas system.
The centre also plays a key role in the ongoing research into
efficient, low-emission energy generation by the CSIRO.
SolarGas is a new energy source that contains about 26% more
energy than the coal-seam methane or natural gas used to feed
the process that creates it. It also produces 26% less carbon dioxide
during production.
The project is a major collaboration between the Department of
Education, Science and Training and New South Wales Department
of Energy Utilities and Sustainability with contributions from Solar
Heat and Power, DLR Germany and the Australian National University.
Some of the 200 mirrors that comprise the National
Solar Energy Centre’s high concentration array, Newcastle.
Photo credits: Stefan Moore
The centre is the only multi-collector facility of its type in Australia and is home to the largest high-concentration
solar array in the Southern Hemisphere. This comprises three main elements including a high-concentration
tower solar array, a linear concentrator solar array and a control room.
The high-concentration tower solar array uses 200 mirrors to concentrate more than 500 kilowatts of energy. This
can create peak temperatures of more than 1000 degrees Celsius. The linear concentrator solar array generates
hot fluid at temperatures of around 250 degrees Celsius, which is enough to power a small turbine generator.
Centre of Excellence in Plant Energy Biology: The first ARC Centre of Excellence headquartered in
Western Australia is focusing its research efforts on the genes, proteins and small molecules that define the
health, growth and productivity of plants.
The ARC Centre of Excellence in Plant Energy Biology aims to help increase our knowledge of how plants
regulate energy generation in the capture of sunlight to produce food.
Plants are sources of food and fuels. These products result from energy metabolism in sub-cellular compartments
(organelles) called mitochondria, chloroplasts and peroxisomes. The centre aims to use functional genomic analysis
to discover and characterise molecular components and control mechanisms that underpin plant energy metabolism.
Knowing the factors that control biogenesis of these organelles will better enable the breeding of plants with
specified metabolic traits. Benefits include enhanced control of biomass and yield, water and nutrient efficiency,
synthesis of nutrients important for human and animal health, and plants better able to tolerate the environmental
stresses of Australia.
Minister Bishop at the ARC Centre of Excellence in Plant
Energy Biology.
Photo credits: ARC
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Advanced materials
Quick dry merino: CSIRO researchers are hopeful a
new quick-drying wool fabric will lift wool use by allowing
wool to compete with synthetics and cotton in the
lucrative sportswear markets.
Quick Dry Merino, developed and commercialised by
CSIRO Textiles and Fibre Technology, repels water
and dries at the same rate or faster than polyester and
acrylic knitwear. Compared to untreated wool garments,
quick-dry garments hold only one quarter of the amount
of water after washing and drip-dry in one quarter of
the time.
Quick dry merino treated wool fabrics repel rather than absorb water.
Photo credits: David McClenaghan
After spinning in a washing machine, treated garments
air-dry in two hours instead of the usual three – a
perfor mance similar to that of polyester. They also cost
less to maintain when tumble-dried because tumbledrying
costs are directly related to the mass of water
retained after spin-drying.
The fabric is aimed at the machine-washable knitwear
market and has undergone commercial trials in
Australia and overseas on 19-micron wool. CSIRO has
also conducted trials on superfine 16-micron wool at
its Geelong laboratories.
HySSIL is a revolutionary aerated cement-based product that is as strong
as normal concrete but is only half as heavy. It provides up to five times
the thermal insulation of concrete and is also impact and fire resistant.
Photo credits: Mark Fergus
Stretching the limits of material science: The
natural substance that gives many insects their flying
and leaping abilities is the source of a new material
that researchers believe will lead to a whole new class
of advanced rubber-like materials.
The expected commercial applications of resilin span
numerous industries including medicine, sport, leisure
goods and defence. This anticipated rubber makeover arises
from the work of molecular biologists from CSIRO.
When the genetic instructions for making resilin, a
protein, were identified in the fruit fly genome in
2001, the CSIRO grasped its importance to materials
science. Research collaborators discovered and then
patented a way to artificially mesh resilin molecules so the material set into an easily moulded and rubbery solid.
Resilin has two particularly useful properties – long fatigue life and resilience to wear. It can be stressed for
hundreds of millions of cycles and continue to give perfect performance.
The researchers own the worldwide patents for resilin’s advanced performance traits, giving them the task of
articulating and developing resilin’s commercial possibilities. Products made from resilin could include implants
for the human body, sensors, engineering applications, and consumer products like high performance athletic shoes.
New material for lighter buildings: A team of researchers at CSIRO has developed a new lightweight
concrete panel technology with superior engineering and environmental performance.
At half the weight of concrete panels of the same strength, HySSIL technology can greatly reduce building weight
and foundation sizes. It has a unique cellular structure that provides up to five times the thermal insulation of
conventional concrete.
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Construction time and cost can also be significantly cut because of easier transporting and lifting of the prefabricated
HySSIL panels. The panels are impact and fire resistant, and can be nailed and painted directly without
rendering.
The HySSIL technology has helped CSIRO partners enter the global construction industry and target the wall
market, whose total value is estimated at US$125 billion a year.
HySSIL wall panels are made using an energy-efficient process that does not require expensive and energyintensive
curing equipment. Coupled with the added benefits of recyclability and improved thermal efficiencies,
this technology can potentially reduce greenhouse impacts.
Smart information use
Harnessing technological aids: The Defence Science and Technology
Organisation (DSTO) is exploring different aspects of the
way in which information is used in the command and decision
processes through the Livespaces project.
The aim of this work is to harness technological aids for decisionmaking
that are intuitive to use and reduce the cognitive effort
required for human-machine and human-to-human interaction,
thus enabling decision-makers to direct their efforts to the tasks
at hand.
The Livespaces project is bringing together a range of future command
and control applications, ubiquitous computing technologies,
telepresence systems, and new and innovative human interaction
approaches in support of advanced teamwork activities. While
the focus of the work is exploring the military application of these
concepts, the work is also applicable to enabling increased collaborative
interaction in the civilian context.
Livespaces technology in use. Photo credits: DSTO
Livespaces is one part of a cognitive and social informatics research programme. Cognitive informatics explores
the application of information science and technology to enhance intelligence and computation processes in
humans. Social informatics studies the design, uses and consequences of information technologies, taking into
account their interaction with institutional and cultural contexts.
The informatics research is drawing on and extending these discipline areas to enhance the abilities of both individuals
and teams involved in sense and decision-making.
Improving the quality of health and welfare statistics: Enhancing the quality of national statistics
collections through innovative use of electronic data standard technologies has been a key priority for the
Australian Institute of Health and Welfare during 2005-06.
Data standards are crucial to data quality because they enable all those collecting, using and exchanging data
to have the same understanding of it and its meaning.
Historically data standards have been viewed in document form with relevant details manually entered into
data systems, an inefficient and potentially erroneous process. In the interest of improving this process, the
institute has enhanced its online registry of Australia’s health and welfare data standards (known as METeOR)
to enable the electronic transmission of machine-readable data standards.
This innovative development means that data systems across Australia can refer to the latest national data
standard when collecting, validating, exchanging and presenting health and welfare statistics. Over time this
will transform the way in which statistical collections are undertaken and boost data consistency and quality.
Chapter 3 - National research priorities 109

Promoting an innovation culture and economy
Rice – reaping the rewards of innovation: The Rural Industries Research and Development Corporation’s
Rice Research and Development Programme has delivered consistently high benefits for the industry and the
broader community.
A recent evaluation of 157 rice projects showed that a total investment of $11 million had returned an
estimated triple bottom-line net benefit of $292 million. Of this return, 59% was estimated to be a direct
return to rice growers with the remaining 41% representing the estimated share of benefits flowing as
environmental and social benefits of rice production.
Examples of innovation for the rice industry brought about
through development corporation research include:
• greater water efficiency through improved varieties
and other technologies, giving 83% improvement in
yield per megalitre while reducing water use by 45%;
• adoption of electro-magnetic soil-mapping technology
to identify leaking soils to significantly reduce water
use;
Using the RiceCheck ‘ring of confidence’ to measure mid-season
nitrogen uptake. RiceCheck is a holistic crop management system
providing objective recommendations to improve yields, grain quality
and profitability. Photo credits: Rural Industries Research and
Development Corporation
• development of varieties suited to Australian
conditions for specific markets such as Japan and the
Middle East; and
• promotion of responsible environmental management
through research support of the Environmental
Champions Programme.
The Australian rice industry has an exceptional ability to prioritise its specific research requirements. Examples
include new varieties to meet consumer needs, cold-tolerant rice to boost yield and water-saving mechanisms
to meet environmental requirements.
Through the Rice Growers’ Association and other networks, rice growers are rapidly converting new research
outcomes into standard industry practice. Rice productivity has improved dramatically in the past 20 years.
Genetic tool proves valuable for producers: The world’s largest sheep genetics database, Sheep Genetics
Australia, is helping the Australian sheep industry get optimum returns from genetic information.
The database, which was launched in October 2005, is a national genetic information and evaluation service
for the meat and wool sectors. The frontier technology was developed jointly by Australian Wool Innovation
and Meat and Livestock Australia together with industry.
The project aims to provide a single national genetic evaluation for a comprehensive range of traits for each
of the three main sheep groups – terminal sires, dual-purpose breeds and Merinos. The project will continue
through a five-year implementation plan but the first major objective was to launch the new service including
the Australian sheep breeding values, which are nationally agreed standards.
The breeding values are designed to be used by ram breeders and commercial producers to compare the
genetic potential of sheep for a range of traits, across flocks, independent of the environment and location.
The number of animals being analysed now exceeds 2.5 million. Their breeders and producers receive updated
breeding values and other genetic information fortnightly.
As new information products are developed they are made available to the 800 breeder clients of Sheep
Genetics Australia. Data can be viewed by the industry online and searches can be carried out to help producers
select sheep with commercially relevant traits.
In 2006, Sheep Genetics Australia will test 250 000 sheep from the 2005 drop. Since the launch of Sheep Genetics
Australia, nine forums have been held across Australia as part of the awareness raising strategy, attracting more
than 650 producers.
110 Backing Australia’s Ability

Genetic evaluation to improve the Australian
flock. Photo credits: DAFF
Ultrasonic void detector. Photo credit: Forest and Wood Products Research and Development Corporation
Pioneering timber research adapts aerospace technology: Adapting aerospace technology for use in
timber quality control has been the focus of a research project between the Forest and Wood Products Research
and Development Corporation and Ensis, Australasia’s leading supplier of research and development services
to the forestry sector.
The pioneer study on the development of non-destructive evaluation techniques technologies for use in the
hardwood sawmilling industry assessed the technologies as a tool for improving hardwood processing.
It also looked to identify the most suitable commercial equipment for detecting internal faults, known as checks,
in dried hardwood boards – a common and costly problem.
In a groundbreaking move that has the potential to revolutionise hardwood timber processing, Neville Smith
Timber – Integrated Tree Cropping Limited’s processing division and Australia’s largest hardwood timber
processor – has adapted ultrasonic void detection for use at its Heyfield sawmill.
Ultrasonic void detection enables processors to see inside solid timber that passes through the mill and to
separate timber affected by internal checks from higher quality material instead of cabinetmakers or joiners
finding them in further processing stages – something that has inhibited confidence in hardwood species. This
ensures higher quality control standards and in future will allow the effects of different treatments to be
measured to reduce internal checking.
Researchers also found that pre-sorting logs on the basis of acoustic wave velocity improved the ability to identify
material prone to internal checking, advising that acoustic wave velocity measurements with existing technology
could be applied immediately.
The project is consistent with industry and government priorities to introduce and encourage the adoption of
frontier technologies, to improve processing, to develop competitiveness through a whole-of-industry approach,
and to maintain and boost confidence in the integrity of Australian forest products. Its success represents a
significant return on investment in Australian timber research and development.
Chapter 3 - National research priorities 111

Dairy for Tomorrow launch in Tasmania. Photo credits: Dairy Australia
Dairying for Tomorrow: In March 2002, the Australian dairy industry launched a national strategy called
Dairying for Tomorrow to sustain its natural resources.
That programme is now being evaluated to ensure it is meeting the needs of the farmers, regions, industry and the
Australian Government, and is being expanded to cement links with other land managers.
Dairy farmers throughout Australia have participated in the project and demonstrated their ongoing
commitment to the environment by:
• making the best use of their natural resources;
• protecting their farm environment;
• working with practical on-farm environmental tools; and
• achieving recognition for environmental care.
The Dairy Australia programme received an environmental honour as a finalist in the 2004 Banksia awards.
The award was presented for achievement and leadership in communication by raising public awareness and
understanding of environmental issues and innovations.
The Australian Government recently approved and funded proposals between Dairy Australia and the Australian
Dairy Farmers to significantly improve the linkage between the dairy industry and other natural resource stakeholders
and to further develop resource management programmes to help farmers make changes on the ground.
The National Landcare Programme, Sustainable Industries Initiative, is providing $345 000 a year for the next three
years to support a network involving each of the major dairying regions.
The Natural Heritage Trust, Industry Pathways to Environmental Management Systems, is providing another
$715 000 in the next three years for the development and delivery of better practice programmes. The network will
help the dairy industry align its programmes with those of natural resource and catchment managers and will
complement the better practice programmes to help dairy farmers continue to improve their environmental
management.
112 Backing Australia’s Ability

PRIORITY 4 – Safeguarding Australia
Critical infrastructure
Photo credits: BMRC
Tsunami Warning: BMRC has focused its efforts on research
into tsunami modelling, data assimilation into tsunami models,
and development of a model-based tsunami warning system. The
Australian Tsunami Warning System is a four-year project, jointly
managed by the bureau, Geoscience Australia (GA) and Emergency
Management Australia, and is committed to implementation of
a fully operational warning system by 2009. The system aims to
provide Australians with at least 90 minutes warning of an
impending tsunami, to support international efforts to establish
an Indian Ocean tsunami warning system and to contribute to
facilitation of tsunami warnings in the southwest Pacific.
Identifying vulnerabilities of critical infrastructure systems: The Australian Government takes an all-hazards
approach to developing critical infrastructure protection and counter terrorism including modelling and analysis.
Working with the Attorney General’s Department, GA’s Critical Infrastructure Project is developing an advanced
spatial intelligence capability for the nation, using spatial information, visualisation techniques and risk analysis
relevant to critical infrastructure protection.
As part of this, GA is developing a secure computational facility with the capability to model and analyse
critical infrastructure vulnerability. This work, which is undertaken in collaboration with CSIRO, is focusing on
identifying vulnerabilities of critical infrastructure systems, and mapping the system intra- and inter-dependencies.
In so doing, the impact of a system failure, attack or natural disaster can be modelled and analysed to determine
the downstream effects for input to mitigation efforts. This analysis can also be used as input to obtain a more
complete picture of the total physical, social and economic impact of a disaster.
The initial focus of the project’s collaborative work over the next two years is the development of an interdependency
model for three infrastructure sectors, energy, banking and finance, and communications.
Natural hazard disaster mitigation projects: GA’s role in natural hazards disaster mitigation encompasses
natural hazard and risk research for a wide range of risk management applications including disaster mitigation,
emergency response and long-term recovery.
The application of spatial information and risk-assessment methodologies is especially relevant to the agency’s
disaster-mitigation studies, which are undertaken in partnership with state and territory governments. The
Disaster Mitigation Australia Package, administered by the Department of Transport and Regional Services,
includes a national approach to risk assessment and national disaster-mitigation strategies.
The agency’s Risk Research Group fulfils the risk assessment and data development needs of the disaster package
with emphasis on severe storms, tropical cyclone, and earthquake hazards. The group also integrates risk
information on flood and bushfire hazards to help enable a national perspective.
The group has formulated a national risk assessment framework and a nationally consistent approach to
natural hazard data collection, research and analysis — a research contribution recognised through a 2005
Australian Safer Communities Award presented by the Attorney-General.
The group is also developing a comprehensive earthquake database, which includes information on seismicity
and waveform. Building on preliminary work initiated in 2004, the project is conducting a comprehensive
study of tsunami hazard in the Australian region.
Chapter 3 - National research priorities 113

David Griffin (left) and Andreas Schiller, team members of BLUElink – Ocean Forecasting Australia, a key Wealth from Oceans National Research Flagship project,
linking with the Bureau of Meteorology and the Royal Australian Navy. Photo credits: Bruce Miller
Understanding our region and the world
Predicting ocean weather: A powerful new suite of ocean models that can predict the influence of ocean
currents on marine activity, from sonar operations to weather forecasting, has been developed in a milestone
collaboration between the Royal Australian Navy, the Bureau of Meteorology and CSIRO through the Wealth
from Oceans Flagship.
The $15 million BLUElink – Ocean Forecasting Australia project builds on three years of intensive research
and development. It puts Australia at the forefront of ocean forecasting and adds important new capabilities
for naval and other marine operations as well as for weather and climate research.
The BLUElink model can predict ocean weather including the temperature, salinity and currents in a threedimensional
presentation up to seven days in advance. The sophisticated modelling uses data gathered from satellites
and a global network of Argo floats that provide detailed information about what is happening deep within
the ocean.
The project brings benefits to all marine operations, such as fishing, tourism, offshore engineering and mining,
coastal management and research into issues such as climate change.
BLUElink has also been used in a Fisheries Research and Development Corporation-funded project on the
ocean dispersal of Southern Rock Lobster larva. It is also being used by the Australian Fisheries Management
Authority to help conserve Southern Bluefish Tuna stocks off Australia’s east coast.
Tropical Warm Pool International Cloud Experiment: The Tropical Warm Pool International Cloud
Experiment, held around Darwin in January and February 2006 to study tropical cloud systems, was the largest
meteorological field programme held in Australia. Key planning and organisation was carried out by BMRC
scientists and their partners.
114 Backing Australia’s Ability

The experiment design included observations for both
testing and running a variety of models. The measurement
platforms included two high-tech weather radar
systems, four cloud radars, three laser radars, lightning
detection and many other surface-based observations
as well as aircraft measurements of aerosols, water
content and ice crystals inside the clouds. The team
launched over 1000 weather balloons during the intensive
observing period. It involved a range of low, mid and
high altitude research aircraft from Europe, Australia
and the US. Australia’s National Facility for Marine
Research, Research Vessel Southern Surveyor, operated
as a floating laboratory in the Timor Sea. Participants
came from a range of research agencies, universities,
and meteorological services across the globe. The team
included students from Australia and around the
world and retired weather observers led the balloon
teams at remote sites.
The campaign resulted in one of the most complete
sets of data ever collected describing tropical convection
and cloud properties, which will enhance weather and
climate prediction models and be a core research
resource for many years.
NASA’s Proteus high-altitude aircraft was one of the research aircraft which
flew missions during the Tropical Warm Pool International Cloud
Experiment campaign. (Photo credit: NASA).
Protecting Australia from invasive
diseases and pests
Agricultural pests and diseases: Agricultural pests
and diseases are an increasingly significant challenge
for Australia and the region. ACIAR has secured mutual
gains with regional countries to enhance the protection
of Australia and neighbouring countries from invasive
pests and diseases.
Recent research outputs have delivered improved
diagnostic techniques across a range of crops and animal
species, disease resistant crop breeding and improved
control mechanisms. Such achievements are directly
beneficial to Australia’s quarantine protection processes
while also assisting developing countries to
compete in the biosecurity arena with both trade and
human health benefits.
Student volunteers prepare to release a weather balloon at Mt Bundy
station on the Adelaide River, Northern Territory as part of the regular 3-
hourly release program during the Tropical Warm Pool International
Cloud Experiment campaign.
An external review of the Animal Health programme
was completed in 2006 and an action plan with emphasis
on trans-boundary diseases, zoonotic diseases and
endemic production impediments has been agreed.
Current projects that serve to protect Australia from
invasive diseases and pests include a study on the
biology, damage levels and control of red-banded mango
caterpillar in Papua New Guinea and Australia, and a
project on improved farming systems for managing
soil borne pathogens of ginger in Fiji and Australia.
Research Vessel Southern Surveyor
Photo credits: BMRC
Chapter 3 - National research priorities 115

Scientists are searching for an effective method to
eradicate or at least control and monitor the red-banded
mango caterpillar in commercial mango-producing
areas. The project will use this knowledge to test and
develop recommendations for appropriate management
strategies to control diseases in both countries.
Stopping the spread of avian influenza: Diagnostic
technology to identify H5N1 avian influenza is leading
the global efforts to track and contain the dangerous
bird flu virus. Breaches in that worldwide defence occur
wherever nations lack the capability to undertake the
necessary tests.
CSIRO Livestock Industries’ Australian Animal Health
Laboratory in Geelong has been at the forefront of
addressing this emergency situation since the beginning
of the outbreak.
In keeping with its responsibilities as a World
Organisation for Animal Health and United Nations
Food and Agriculture Organisation reference laboratory
for avian influenza, it has provided emergency training
and reagents to countries throughout the region.
This year the Food and Agriculture Organisation commissioned
CSIRO scientists to conduct coordinated training
workshops across Asia. The purpose was to co ordinate
testing methods and develop quality assur ance systems
so there can be confidence in laboratory findings.
Paul Selleck is
inoculating eggs
with H5N1 virus.
Photo credit: David
McClenaghan
An important result of the programme
has been the development of
a strong network of veterinary laboratories
throughout Asia.
For some of the countries involved,
the workshops provided the first
experience of testing for avian influenza.
Training covered collecting and
processing speci mens, diagnosing
highly pathogenic avian influenza,
main taining safety while handling H5N1 and how to
ensure quality control of diagnostic tests.
Protecting Australia from terrorism
and crime
Radiological crime scene investigation: With
forensics increasingly integrated with counterterrorism
training, the ANSTO has a unique role to play
as an educator in radiological crime scene investigation
due to experience in the use of radio active material.
Farming in papua New Guinea
Photo credits: ACIAR
116 Backing Australia’s Ability

Forensic counter-terrorism practitioners and
crime scene investigators from around Australia train at ANSTO in specially developed radiological crime scene investigations workshops to develop practical
skills and knowledge in dealing with radiological hazards. Photo credits: ANSTO
In 2005-06, ANSTO hosted two radiological crime scene investigation workshops in preparation for the 2006
Melbourne Commonwealth Games. Participants from across Australia included forensic counter-terrorism, bomb
squad, fire/Hazardous Materials and defence force personnel.
The aim of the workshop was to equip participants with the skills and knowledge to competently assess the extent
of a radiological hazard following a terrorist attack and, if safe to do so, enter the scene to collect evidence.
Participants were presented with both academic and practical challenges. On the practical side, they responded
to two realistic mock scenarios requiring all agencies to work together and safely examine the crime scenes.
Academically, participants received formal instruction on all aspects of crime scene operations, radiation
protection and measurement, decontamination and radiological sampling.
Overall, the exercises demonstrated the importance of a national approach to such specialist training programmes.
The outcomes from the workshops assisted ANSTO staff in drafting guidelines for assessing suspicious
packages and substances for the national chemical, biological, radiological and nuclear working group.
Communicating research and statistics on crime and justice: The Australian Institute of Criminology
(AIC) is committed to wide dissemination of crime and justice research and data to meet the needs of different
target groups including policy makers, practitioners, researchers and the public.
Each year the institute produces Australian crime: facts and fi gures, which provides a short, easy to read summary of
recorded crime, and statistics on victimisation, offenders and the criminal justice system in Australia. It also produces
publications of major research projects, and papers that summarise key findings and issues.
As well as print publications, which are also available on its website, the AIC produces several web-only products
ranging from short digests of recent research and statistics in a series of fact sheets (AICrime reduction matters,
Crime facts info, BushFire arson bulletin, High tech crime brief) to in-depth discussion of research methodology and
findings (technical and background papers). These are all notified to subscribers to the institute’s email alert list,
and to different groups in Australia and around the world.
The AIC’s website was recently voted one of the top five sources of web-based information worldwide by the
US National Institute of Justice. The website, which turned 10 in 2006, is not only a source of information about
the institute, but also provides a gateway to reliable and valued information about over 40 topics in crime and
criminal justice.
Catering to a broad audience of policy makers, researchers, practitioners and the general public, the website
links to the institute’s own publications and conferences and to sources from around the world on subjects from
arson to young offenders and from crime statistics to crime prevention.
Chapter 3 - National research priorities 117

Clearinghouse-type websites are currently in development to enable
knowledge sharing between those involved in on-the-ground projects and
programmes around Australia about what works to improve justice outcomes
and reduce crime. The websites will encourage open discussion and debate
and the contribution of information about success stories and lessons learned.
Mock courtroom. Photo credits: AIC
Sexual assault mock trials: In January 2005, the AIC was commissioned by
the New South Wales Attorney General’s Department to conduct research
investigating whether adult sexual assault complainant testimony delivered via
pre-recorded videotape or closed circuit television impacts on jury deliberations
and perceptions differently from when such evidence is presented face-toface
in the courtroom.
This research was highly innovative in that it was experimental (allowing a range of factors to be controlled) and
involved 210 members of the public who volunteered to participate as jurors. Professional actors were employed
to enact the roles of the victim, the defence lawyer, the prosecutor, the judge and the accused. Two weeks of
full-time rehearsals were conducted before running the trials.
Jurors sat in a mock courtroom (replicating the layout of a real courtroom) in a jury box and watched a mock trial
take place in which the victim gave testimony and was cross-examined about an alleged sexual assault. A total of
18 trials were conducted, each lasting about one and a quarter hours.
The resulting research found that the mode in which testimony was given had a negligible impact on juror perceptions
of guilt. This indicates that the presentation of evidence via closed circuit television or video will not adversely affect
the trial but remove the need for the victim to go through their testimony again in the presence of the accused.
An important finding was juror confusion as to the exact meaning of consent in sexual assault cases, and the preexisting
attitudes, beliefs and myths about sexual assault that they brought with them into the court room. The
study concluded by suggesting research of a similar scale into these attitudes and their impact on sexual assault
verdicts with a view to identifying means to change incorrect stereotypes through targeted education and
awareness campaigns.
Evaluating face recognition systems: The Defence Science and Technology
Organisation (DSTO) is assisting a number of government agencies to develop biometric
systems that can strengthen their screening and security processes. Trials and evaluation
of such systems for the Australian Customs Service and Department of Immigration and
Multicultural Affairs have been undertaken to improve identity management during
border crossings and to prevent illegal arrivals.
Computer Model
for Face Recognition.
Photo credits: DSTO
DSTO tested the face recognition matching performance of two types of systems in an
operational environment. Following further laboratory trials DSTO devised improvements
that have led to a face recognition system achieving operationally acceptable performance
for verification purposes.
DSTO leads the world in methodologies for evaluating new biometric systems in an operational, real-world setting.
Transformational defence technologies
Smart Patches in aircraft: DSTO has been conducting research over a number of years into bonded composite
patches to reinforce defective aircraft structures.
This is recognised as a very cost-effective repair procedure for many types of structural problems and has
been used by the Australian Defence Force for successful life extension of particular aircraft components.
However an ongoing concern has been the application of this technique to critical components and the
associated certification issues.
118 Backing Australia’s Ability

A novel approach developed by DSTO to address this concern has been
the development of Smart Patches, which are patches embedded with
sensors that enable the health and well-being of the patch system to be
monitored. The patch systems developed by DSTO are self powered and
contain wireless data links allowing the sensors to be interrogated remotely.
DSTO successfully demonstrated a world first in-situ self powered structural
health monitoring system in a composite bonded repair on the aileron hinge
of an F/A-18 operational aircraft.
Smart Patch System. Photo credits: DSTO
These types of structural health monitoring systems have the potential to
have a significant impact upon the operational life extension of defence
aircraft. This work offers a solid foundation for the development of future
autonomous in-situ structural health monitoring systems.
Automation of the Battlespace: The rate of technology evolution, particularly with miniaturisation, connectivity
and processing power, is outstripping the capacity for defence forces to absorb new opportunities or even
conceptualise the emergent concepts of operation.
Maintaining a capability edge in such a dynamic, fast moving technology environment is a challenge for the
Australian Defence Force. The force that can achieve the required tempo and, more importantly, demonstrate the
capacity to integrate and field disparate technologies, will retain a persistent capability advantage over its
adversaries.
Automation of the Battlespace is a DSTO initiative bringing together disparate technologies such as miniaturised
sensors, state-of-the-art communications technologies, internet protocols, unmanned aerial, underwater and ground
vehicles, robotics, artificial intelligence and intelligent agents.
DSTO is using networking, integration and automation to develop and explore the use of new, intelligent
systems to carry out hazardous tasks traditionally reserved for war fighters, thereby reducing their exposure
to enemy attack. These systems also have the potential to increase the coherency of effort and operational tempo
of the Australian Defence Force, and offer potentially higher operational effectiveness per war fighter with
lower casualty levels.
Automation of the Battlespace. Photo credits: DSTO
Chapter 3 - National research priorities 119

120 Backing Australia’s Ability

CHAPTER 4: Australian Innovation Scorecard
The Australian Innovation Scorecard 2006 is the third in a biennial series designed to provide a snapshot of Australia’s
innovation performance relative to other OECD economies. The previous scorecard appeared in Backing Australia’s
Ability 2004-05 – Real Results Real Jobs while the first scorecard appeared in Backing Australia’s Ability 2002-03
– Real Results Real Jobs.
In the recent Australian Bureau of Statistics (ABS) survey of innovation in Australia, the results of which are
published in Innovation in Australian Business 2001-03 (cat no. 8158.0), the term innovation was defined as the process
of developing, introducing and implementing a new or significantly improved good, service or process. Innovation
can be considered as the process whereby ideas are transformed through economic activity into sustainable,
value-creating outcomes, the emphasis being on the process of converting ideas into economic outcomes.
The indicators
The innovation indicators used in this scorecard have been chosen to reflect the wide range of innovation activities
that are undertaken in Australia and overseas and to allow benchmarking of Australia’s performance against
other OECD countries. The indicators stay as close as possible to those used in previous scorecards but some
changes have been made to accommodate new data and to deal with areas where data are no longer available. The
changes mean the 2006 scorecard uses 18 indicators, three more than were used in previous scorecards.
Three additional indicators, which have become available as a result of the ABS innovation survey mentioned above,
are being used for the first time in this scorecard. Two of these new indicators – the percentage of turnover
accounted for by innovations in new goods and services, and the proportion of businesses that are innovating
– measure market outcomes from innovation. The third indicator shows the percentage of businesses which,
having introduced new or significantly improved goods, services or processes, have also engaged in collaboration
activity. This indicator points to the link between collaboration and innovation. Because of data limitations,
comparisons for these three indicators can only be made with the European Union (EU) members of the OECD.
Two other new indicators included in this scorecard are the number of broadband subscribers per one
thousand of the population (data for which are presented for 2006, 2004 and 2003), and the percentage of
businesses using the internet to sell goods and services. Two indicators used in previous scorecards – the share
of foreign affiliates in manufacturing R&D, and expenditure on innovation as a share of total sales in
manufacturing – have been omitted because recent Australian data are not available. The methodology for the
science graduates indicator returns to its original 2002 scorecard form, having been changed in the 2004
scorecard because the relevant data were not then available.
As was the case with previous scorecards, the indicators are grouped into six categories:
• knowledge creation – the ability to generate new ideas and technologies;
• human resources – the capacity of the labour force to transform these ideas and technologies into
tangible economic outcomes;
• finance – the pool of funds available to commercialise ideas and technologies;
• knowledge diffusion – the capacity to transfer new ideas and technologies throughout the economy;
• international collaboration – the international linkages of Australia’s innovation system; and
• market outcomes – economic returns on the investment in innovation.
Chapter 4 - Australian innovation scorecard 121

The scorecard provides an overview of Australia’s achievements in the areas covered by the indicators and
compares these achievements with the situation in other OECD countries. There are some constraints on the
availability of recent internationally comparable data, but in every case data used in this scorecard are at least
one year advanced on that used in the 2004 scorecard and three years or more advanced on the 2002 scorecard.
Much of the data used in the earlier scorecards have been revised since those scorecards were published and
the revised data have been incorporated in the comparisons made below. With three sets of data now available
for most of the indicators, it is possible to make tentative observations about trends in some areas.
The scorecard is not designed to be prescriptive in the sense that Australia should be attempting to be the leader
in every indicator. Each indicator provides only a partial picture of innovative performance, so an increase in
any one indicator does not necessarily mean a better outcome for the whole economy. This is true especially for
indicators based on inputs or expenditure, such as those in the knowledge creation and human resources categories,
as it is difficult to establish a quantitative relationship between changes in expenditure and subsequent changes
in innovation output. Nor is it the case that having a higher ranking on any or all of the indicators relative to other
OECD countries is a goal in itself. Innovation policy and outcomes need to have regard to particular country
circumstances, including comparative advantages, economic and institutional performance and other policy goals
and objectives.
Main points of the 2006 Innovation Scorecard
The 2006 scorecard is shown in Table 13. It is examined in detail below but the main points are:
• In the 2006 scorecard Australia ranked in the top 10 OECD countries in 12 out of the 18 indicators,
performing above the average in 14 indicators and below in four. Australia performed well above the
average in five areas:
o in the Knowledge Creation category – science and technical articles per million of the population;
o in the Human Resources category – science graduates in employment;
o in the Finance category– investment in venture capital as a percentage of GDP;
o in the Collaboration category – innovators with collaboration activity; and
o in the Market Outcomes category – businesses selling over the internet.
• Australia was below the OECD average in four areas, most notably in the number of US patents per
million of the population, another indicator of Knowledge Creation.
• Australia improved its ranking between the 2004 and 2006 scorecards in five of the 14 common
indicators. This occurred even though, as is shown in more detail below, its performance compared
with previous years improved in nine out of the 14 indicators. Improvements in rankings were in:
o Knowledge Creation – US patents and business R&D expenditures;
o Finance – investment in venture capital as a percentage of GDP; and
o Knowledge Diffusion – internet usage and broadband subscribers.
• Australia’s ranking fell in five areas, with the greatest fall being three places in the average annual
multifactor productivity (MFP) measure for 1999–2003. Also of note, the percentage of the labour
force with a tertiary education indicator fell two places. Nevertheless, Australia remained well above
the OECD average and, as is shown below, the percentage of the labour force with a tertiary education
in Australia has grown substantially since the 2004 scorecard.
122 Backing Australia’s Ability

Table 13. Australian Innovation Scorecard 2006
Category
Knowledge
Creation
Human
Resources
Finance
Knowledge
Diffusion
Collaboration
Market
Outcomes
Indicator
2006 2004
rank 1 rank
2002
rank
Australia
score
Leader
Leader
score
OECD
average
Australia
relative to
OECD
Year of
available
data
R&D expenditure in
6 6 6 0.78% Iceland 1.35% 0.63% 2 Above 2004 3
education sectors as % GDP 3
government & higher
Scientific and technical
articles per million population
Number of US patents
per million population
Business sector R&D
expenditure (BERD)
as % of GDP
10 9 8 1279
articles
17 18 18 51 patents United
States
2 231
articles
278
patents
765 Above 2005
articles 4
126 Below 2005
patents 4
17 18 20 0.94% Sweden 2.93% 1.15% 2 Below 2004
Percentage of workforce 8 6 5 21.9% United
with tertiary education 7 States
Switzerland
Number of science
graduates in employment
per 100 000 employed
25-34 year olds 8 3 3 6 2020
graduates
Researchers per
10 000 labour force
8 8 7 80
researchers
Investment in venture 2 4 7 0.25% Republic
capital as % of GDP 9 of Korea
Investment in ICT as %
of business sector gross
fixed capital formation
Internet users per
1000 population
4 3 3 22.9% United
States
Finland 2298
graduates
Finland 157
researchers
29.7% 17.7% 2 Above 2004
1229 Above 2002
ates 2
gradu-
67 Above 2004
researchers 5
0.25% 0.09% 2 Above 2003
29.1% 17.9% 2 Above 2003
4 6 10 704 users Iceland 732 users 531
users 2 Above 2005
Broadband subscribers 17 21 20 174 Denmark 292 155 2 Above 2006
per 1000 population 10
Investment in new machinery
and equipment as a % of GDP
Percentage of innovators
with collaboration activity
12 12 17 7.8% Slovak
Republic
Breadth of international 13 12 8 114
collaboration 12
science and engineering
countries
15.1% 7.7% 2 Above 2004
6 N/A N/A 31% 11 Finland 52% 20% 6 Above 2003
United
Kingdom
172
countries
104 Above 2003
countries 2
Average annual growth 10 7 3 1.11% Ireland 3.3% 1.14 2 Below 1999-03
between 1999 and 2003 13
in multifactor productivity
Percentage of turnover
from new goods and
services innovations
Percentage of innovating
businesses in the economy
14 N/A N/A 19.5% 11 United
Kingdom
41% 28.8% 6 Below 2001-03
10 N/A N/A 41% 11 Germany 54% 40% 6 Above 2001-03
Percentage of businesses 4 N/A N/A 19% United
goods and services 14
using the internet to sell
Kingdom
27% 12% 2 Above 2004
Sources: ABS Catalogue numbers 8158.0, 1350.0, 8109.0, 8111.0 and 8112.0, 5204.0, 5206, Eurostats Third Community Innovation Survey (CIS3) 1998-2001, US
Patent and Trademark Office 2005, World Competitiveness Yearbook 2006, OECD STI Scoreboard 2005, 2006, OECD Main Science & Technology Indicators,
Number 1 2006, OECD Science, Technology and Industry Outlook 2004, OECD Education at a Glance 2005, 2006, OECD Education Database 2006, OECD
Venture Capital Database 2006, NSF Science and Engineering Indicators 2006, Thompson ISI 2006.
Chapter 4 - Australian innovation scorecard 123

Notes:
1. Australia’s ranking is in a field of 27 to 30 OECD countries with the exception of: Investment in ICT as a percentage of business sector gross fixed capital
formation (21), Growth in multi-factor productivity between 1999 and 2003 (19), Total percentage of innovating businesses in the economy (18), Percentage
of turnover from new goods and services (17) and Percentage of innovators with collaboration activity (16).
2. The average is a country average rather than a weighted average.
3. Higher Education Sector R&D expenditure is valued on a 2004 calendar year basis and is normalised on that calendar year GDP to be consistent. Australian
Government Sector R&D expenditure is valued on a 2004-05 financial year basis and is normalised by that financial year GDP to be consistent. GDP figures used
are the most recently revised ABS figures at time of printing. This differs slightly from the methodology used in the 2004 and 2002 scorecard. In the 2004 and
2002 scorecards Government Sector and Higher Education sector R&D were both normalised by financial year GDP.
4. Department of Industry, Tourism and Resources calculation of weighted OECD average is based on each countries relative share of total OECD population.
5. Department of Industry, Tourism and Resources calculation of weighted OECD average is based on each countries relative share of total OECD labour force
population.
6. Department of Industry, Tourism and Resources calculation of weighted OECD average is based on each countries relative share of the total number of
innovating businesses in the OECD.
7. Tertiary Education refers to traditional university degree of a length of three years or greater.
8. The methodology used here is consistent with the methodology used in the 2002 scorecard. It refers to the number of science graduates aged 25-34 in employment per
100 000 employed 25-34 year olds. This omits international or domestic students who graduated in the country of interest but are employed elsewhere and also
omits those aged over 34. In the 2004 scorecard this indicator was changed to the number of science graduates per 10 000 persons in the entire labour force. This
change was necessitated by data unavailability at the time of the 2004 scorecard (see 2004 scorecard notes). Since then data in line with the original methodology have
become available for both this 2006 scorecard and the previous 2004 scorecard.
9. The source for Australian venture capital data has changed. Data shown here for this and previous scorecards reflect this change. The previous source for Australian
data was the Australian Venture Capital Journal (AVCJ) but this journal is no longer published. Australian data is now sourced from the ABS “Venture Capital”
publication (catalogue 5678.0). Caution should be exercised when making comparisons between countries as this is a new topic of statistical measurement where
international standards are still in development, so there may be considerable collection and methodology differences between nations.
10. This indicator was not included in previous Scorecards. The 2004 and 2002 ranks given here use 2004 and 2003 data respectively.
11. Australian values for these indicators were derived from the ABS 8158.0 Innovation in Australian Business Survey. To make these indicators consistent with the
methodology used in the Third Community Innovation Survey (CIS3) from which the data for other countries were drawn, appropriate changes were made. Industries
falling under ANZIC classifications A,E,G, M,N,O,P,Q and subdivision 77 were excluded from analysis as they did not correspond to the industries included in the
CIS3. Also, Australian firms were excluded from being an “innovator” if they had indicated they had engaged in Organisational innovation only, i.e. they did not
indicate any new or significantly improved product or process innovation. The averages of these indicators are for the European Union members of the OECD only.
12. This indicator was not included in the 2002 Scorecard. The 2002 rank given here is using 1999 data.
13. Averages for multi-factor productivity growth should be interpreted cautiously as productivity change may be driven by different factors across economies.
14. The definition of Internet selling and purchasing varies between countries, with some explicitly including orders placed by conventional email (for instance,
Australia and Canada) and others explicitly excluding such orders (e.g. Ireland, the UK and some other European countries). Most countries explicitly use the
OECD concept of Internet commerce, that is, goods or services are ordered over the Internet but payment and/or delivery may be off-line. All industries includes,
for most countries: Manufacturing, Construction, Wholesale and retail, (part) Hotels and restaurants, Transport, storage & communication, Real estate, renting
and business activities and (part) Other community, social and personal service activities
124 Backing Australia’s Ability

Australia’s innovation performance relative to the 2004 and 2002 Scorecards
Table 14 provides a comparison of Australia’s performance for the 14 indicators where comparisons are
possible. Values reported for the 2004 and 2002 scorecards incorporate any revisions of the data that have
occurred since those scorecards were published.
Table 14. Comparison of Australia’s performance in the 2006, 2004 and 2002 Scorecards
Indicator
2006 Scorecard
(year of data)
2004 Scorecard
(year of data)
2002 Scorecard
(year of data)
Knowledge Creation
R&D expenditure in government and higher education sectors
as a percentage of GDP
0.78% (2004) 0.77% (2002) 0.76% (2000)
Scientific and technical articles per million of the population 1279 articles (2005) 1154 articles (2003) 1090 articles (1999)
Number of US patents per million of the population 51 patents (2005) 52 patents (2003) 54 patents (2001)
Business sector R&D expenditure as a percentage of GDP 0.94% (2004-05) 0.89% (2002-03) 0.72% (2000-1)
Human Resources
Percentage of workforce with tertiary education 22% (2004) 20 % (2002) 18 % (1999)
Number of science graduates in employment per 100 000
employed 25-34 year olds
2020 graduates
(2004)
1942 graduates
(2003)
1303 graduates
(1999)
Researchers per 10 000 of the labour force
80 researchers
(2004)
74 researchers
(2002)
68 researchers
(1999)
Finance
Investment in venture capital as a percentage of GDP 0.25% (2003) 0.28% (2001) 0.23% (2000)
Knowledge Diffusion
Investment in ICT as a percentage of business sector gross fixed capital
formation
22.9% (2003) 24.7% (2001) 26.0% (2000)
Internet users per 1000 population 704 users (2005) 601 users (2003) 465 users (2001)
Broadband subscribers per 1000 population 174 (2006) 77 (2004)* 35 (2003)*
Investment in machinery and equipment as a percentage of GDP 7.79% (2004) 7.98% (2002) 8.05% (1998)
Collaboration
Percentage of innovators with collaboration activity 31% (2003) N/A N/A
Breadth of international science and engineering collaboration 114 (2003) 106 (2001) 113 (1999)
Market Outcomes
Average annual growth in MFP 1.1% (1999–2003) 1.4% (1997–2001) 2.4% (1995–1999)
Percentage turnover from new goods and services innovations for
product innovators
19.5% (2001-2003) N/A N/A
Percentage of innovating businesses in the economy 41% (2001-2003) N/A N/A
Percentage of businesses using the internet to sell goods and services 19% (2004) N/A N/A
Sources: See Table 13. * The Broadband figures reported here were not published in the 2004 and 2002 scorecards.
Another way of looking at the changes shown in Table 14 is in Figure 1, which shows the percentage change in
Australia’s performance between the 2004 and 2006 scorecard compared to the percentage change in Australia’s
performance between the 2002 and 2004 scorecards.
Chapter 4 - Australian innovation scorecard 125

FIGURE 1: Percentage change in the Australian 2004 and 2006 scorecard values compared to the percentage charge
between the 2002 and 2004 scorecard values.
Public R&D
Scientific & technical articles per capita
US patents per capita
Business R&D
Tertiary education
Science graduates in employment aged 25-34
Researchers in labour force
Venture capital
Investment in ICT
Internet usage
Broadband subscribers
Investment in new equipment
International S&E collaboration
MFP growth 1999-2003
-50 -25 0 25 50 75 100 125 150
Percentage change between scorecards
Sources: See Table 13.
2004-2006 Scorecard Comparison 2002-2004 Scorecard Comparison
Figure 1 shows that nine indicators out of 14 comparable indicators had nominal value increases between the 2004
and 2006 scorecards. Eight of the 14 indicators improved in each scorecard since 2002. The significant
improvements were in:
• public sector R&D expenditure (from 0.76% of GDP to 0.77% and now to 0.78% of GDP);
• scientific and technical articles (from 1090 articles per million population in the 2002 scorecard to 1154 and
now to 1279 articles per million population in the 2006 scorecard);
• business sector R&D expenditure (from 0.72% of GDP to 0.89 % and now to 0.94% of GDP);
• percentage of workforce with tertiary education (from 18% to 20% and now to 22 %);
• science graduates (from 1303 employed per 100 000 in the workforce aged 25-34 to 1942 and now to
2020 employed per 100 000 in the workforce aged 25-34);
• researchers (from 68 researchers per ten thousand labour force to 74 and now to 80 researchers per ten
thousand labour force);
• internet usage (from 465 users per thousand population to 601 and now to 704 users per thousand population);
and
• broadband subscribers (from 35 per one thousand population to 77 and now to 174 per one thousand
population in the 2006 scorecard). This indicator displays the highest growth of all indicators.
126 Backing Australia’s Ability

Australia’s performance declined in only four indicators between all three scorecards:
• US patents per capita (from 54 patents per capita to 52 and now to 51 patents per capita)
• investment in ICT as a percentage of gross capital formation (from 26% to 24.7% and then to 22.9%
in the 2006 scorecard). Despite this fall, Australia’s ICT investment ranking dropped only one place to
be a highly credible 4 th in the OECD and remains nearly 30% above the OECD average.
• investment in machinery and equipment (from 8.05% of GDP to 7.98% in the 2004 scorecard and now
down to 7.79% of GDP in the 2006 scorecard); and
• average annual MFP growth (from 2.4 to 1.4% and now to 1.1%).
For only two indicators did the change fluctuate between the periods:
• investment in venture capital (from 0.23% of GDP and then up to 0.28% and now to 0.25% of GDP in
the 2006 scorecard); and
• international science and engineering collaboration (from 113 countries collaborated with down to 106
and then up to 114 countries collaborated with in the 2006 scorecard).
Of the five indicators that decreased in nominal terms, two of these indicators, investment in ICT and multifactor
productivity, fell at a slower rate between the 2004 and 2006 scorecards than between the 2002 and 2004 scorecards.
While investment in venture capital as a percentage of GDP declined, this occurred in a time when venture
capital was declining for the entire OECD. In fact, Australian investment in venture capital fell at a substantially
slower rate than the OECD average. This is true also for the number of US patents per capita. Even though
Australia registered fewer US patents than in previous scorecards, Australia actually improved its OECD ranking
by one place. Investment in new equipment also decreased, although the decrease was marginal.
Three indicators exhibited higher positive growth, in percentage point terms, between the 2004 and 2006 scorecards
than between the 2002 and 2004 scorecards. By magnitude of the increases these were in:
• international science and engineering collaboration (13.7 percentage points);
• scientific and technical articles (5.1 percentage points); and
• broadband subscribers (3 percentage points).
Summary of Australia’s innovation performance relative to OECD countries
Figure 2 illustrates Australia’s overall innovation performance by comparing Australia’s performance across the
18 indicators with the OECD averages. Australia performed higher than the average in 14 out of the 18 indicators.
It also out-performed the OECD average by 50% or more in five indicators. These indicators are science
graduates in the labour force, scientific and technical articles per capita, venture capital investments, innovators
with collaboration activity and businesses utilising the internet for sales. These findings suggest that Australia
is successfully improving the level of scientific human capital, is generating new knowledge and is investing
in emerging technologies and start up companies. It also demonstrates a willingness to take advantage of the
expanding virtual marketplace and other dynamic networks.
Chapter 4 - Australian innovation scorecard 127

FIGURE 2: Australia’s innovation performance in the 2006 scorecard compared to the OECD average
Public R&D
Scientific & technical articles per capita
US patents per capita
Business R&D
Tertiary education
Science graduates in employment aged 25-34
Researchers in labour force
Venture capital
Investment in ICT
Internet usage
Broadband subscribers
Investment in new equipment
Novel innovators with collaboration activity*
International S&E collaboration
MFP growth 1999-2003
Innovation turnover as a percentage of total sales*
Proportion of innovating businesses*
Businesses selling over the internet
-100 -50 0 50 100 150 200
Sources: See Table 13.
Percentage difference from OECD (*EU) average
Other areas where Australia performed strongly are ICT investment, internet usage, the percentage of the labour
force that has a tertiary education, researchers in the labour force and public investment in R&D.
Australia’s level of patenting in the US, however, is substantially below the OECD average. Innovation turnover
as a percentage of total sales is also considerably below the average as is business expenditure on R&D. On
this last point, while business R&D is 18% below the OECD average it is less than 10% below the median as
a few high spending nations skew the average considerably.
Figure 3 shows Australia’s performance compared to the OECD average for the 2002, 2004 and 2006 scorecards
in the 14 indicators that are common to all scorecards. This graph places Australia’s recent comparative
performance into a wider historical perspective.
128 Backing Australia’s Ability

FIGURE 3: Australian innovation performance compared to the OECD average 2002, 2004 & 2006 scorecards
Public R&D
Scientific & technical articles per capita
US patents per capita
Business R&D
Tertiary education
Science graduates in employment aged 25-34
Researchers in labour force
Venture capital
184%
Investment in ICT
Internet usage
Broadband subscribers
Investment in new equipment
International S&E collaboration
MFP growth 1999-2003
-100 -50 0 50 100 150 200
Percentage difference from OECD average
Sources: See Table 13.
2006 Scorecard 2004 Scorecard 2002 Scorecard
Australia performed above the average for 11 out of the 14 comparable indicators in the 2006 scorecard (one
more than in the 2004 scorecard and two more than the 2002 scorecard). Australia’s performance against the average
increased in nine indicators between the 2004 and 2006 scorecards and in eight indicators between the 2002 and
2006 scorecards. A considerable turnaround in performance has been achieved in the broadband subscribers
indicator, which was over 50% below the OECD average only three years ago in 2003 but is now 12% above
the OECD average.
In terms of ranking within the OECD, Australia has improved its relative position in five indicators, remained
in the same position in four and decreased in five. It is important to note when comparing international rankings
that they can be volatile due to differences in measurement across countries and that four of Australia’s rankings
from the 2004 scorecard rankings have been revised upwards due to changes in the data.
Chapter 4 - Australian innovation scorecard 129

Compared to the 2004 scorecard Australia increased its position within the OECD in:
• broadband subscribers (4 places);
• investment in venture capital (2 places);
• internet users (2 places);
• number of US patents (1 place); and
• business sector expenditure on R&D (1 place).
Australia has decreased its position within the OECD in:
• scientific and technical articles (1 place);
• tertiary education (2 places);
• investment in ICT (1 place);
• international science and engineering collaboration (1 place); and
• average annual multifactor growth (3 places).
Figure 4 compares Australia with the OECD leader’s performance for each indicator. This shows that Australia
is well placed compared to the leader with respect to internet usage, venture capital, investment in ICT, science
graduates in the labour force, and the proportion of innovating businesses but is significantly behind the
OECD leader with respect to patenting in the US, business expenditure on R&D, multifactor productivity,
and broadband subscribers.
FIGURE 4: Australia’s innovation performance compared to the OECD leader, 2006 scorecard
Public R&D
Scientific & technical articles per capita
US patents per capita
Business R&D
Tertiary education
Science graduates in employment aged 25-34
Researchers in labour force
Venture capital
Investment in ICT
Internet usage
Broadband subscribers
Investment in new equipment
Novel innovators with collaboration activity
International S&E collaboration
MFP growth 1999-2003
Innovation turnover as a percentage of total sales
Proportion of innovating businesses
Businesses selling over the internet
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Ratio to OECD Average
Sources: See Table 13.
Australia
OECD leader
130 Backing Australia’s Ability

Summary of Australia’s innovation performance against each category
Knowledge Creation
Public Sector R&D
Figure 5 shows that Australia ranked 6 th and was significantly (23%) above the OECD average for public
expenditure on R&D. This high ranking reflects the continued growth of expenditure in Australia on R&D
in the higher education and government sectors. Expenditure was 0.78% of GDP in the 2006 scorecard,
compared to 0.77% in the 2004 scorecard and 0.76% in the 2002 scorecard.
FIGURE 5: Public expenditure on R&D as a percentage of DGP compared to the OECD average
Percentage difference from the OECD average
120
100
80
60
40
20
0
-20
-40
-60
-80
Iceland
Finland
Source: OECD, ABS. Data from 2004 or latest available year.
Scientific and Technical Articles
Sweden
Canada
Denmark
Australia
France
Netherlands
Germany
Norway
Japan
Switzerland
Austria
United States
New Zealand
Korea
United Kingdom
Belgium
Italy
Spain
Hungary
Turkey
Czech Republic
Greece
Portugal
Ireland
Poland
Mexico
Slovak Republic
Luxembourg
The number of scientific and technical articles published per million of the population is a measure of a nation’s
ability to generate new knowledge, and provides an indication of the potential for the development of
innovative products, services and technologies. In the 2006 scorecard Australia registered 1279 scientific and
technical articles per million of the population (an increase on the 1154 articles in the 2004 scorecard).
Figure 6 shows that Australia ranked 10 th in the OECD and was substantially (67%) above the OECD average.
Chapter 4 - Australian innovation scorecard 131

FIGURE 6: Number of scientific and technical articles per million population compared to the OECD average
200
Percentage difference from the OECD average
150
100
50
0
-50
-100
Switzerland
Sweden
Denmark
Finland
Netherlands
Iceland
Norway
Canada
New Zealand
Australia
United Kingdom
Italy
Belgium
Austria
United States
Ireland
Germany
France
Spain
Greece
Japan
Czech Republic
Portugal
Korea
Hungary
Slovak Republic
Luxembourg
Poland
Turkey
Mexico
Source: Thompson ISI. Data from 2005.
US Patents
The number of US patents registered in the United States per million of the population provides an indication
of the intention of researchers and firms to develop their knowledge into new products. The measure is used
extensively internationally, mainly because the US is the largest market in the world and registering a patent
there indicates that the invention is capable of competing with the world’s best. Nevertheless, not all of these
patents will be commercialised so the measure has limited scope as an indicator of the commercial potential of
an innovation. Also, the US and Japan exhibit a higher propensity to patent in the US than other countries,
thereby distorting the average and resulting in 25 of the 30 member countries being below the OECD average.
Australia registered 51 patents per million of population in the 2006 scorecard, a slight decrease from the 2004
scorecard level of 52 patents per million of population but this occurred in a time when US patent registration
were declining for the entire OECD. In fact, Australia improved its OECD ranking by one place. Figure 7
shows that Australia is significantly (60%) below the average but its ranking of 17 th in the OECD for US patent
registration puts it in the middle group of countries.
FIGURE 7: Number of US patents per million population as a percentage difference from the OECD average
150
Percentage difference from the OECD average
100
50
0
-50
-100
-150
United States
Japan
Switzerland
Finland
Sweden
Germany
Luxembourg
Canada
Korea
Denmark
Iceland
Netherlands
Austria
United Kingdom
Belgium
Norway
Australia
France
Ireland
New Zealand
Italy
Spain
Hungary
Czech Republic
Greece
Portugal
Mexico
Poland
Turkey
Slovak Republic
Source: US Patent and Trademark Office. Data from 2005.
132 Backing Australia’s Ability

Business R&D
Business expenditure on R&D (BERD) is a measure of the private sector’s contribution to developing new
knowledge and refining existing technologies for commercial outcomes. Australia had an expenditure of 0.94%
of GDP in the 2006 scorecard, a significant increase from the 2004 scorecard, where the expenditure recorded
was 0.89% of GDP. Figure 8 shows that Australia’s performance in this area is slightly below the OECD
average, ranking 17 th in the OECD. Australia’s position relative to the OECD average has improved slightly
since the 2004 scorecard, from 23% below the average to 18% below.
FIGURE 8: Business expenditure on R&D as a percentage of GDP as a percentage difference from the OECD average
200
Percentage difference from the OECD average
150
100
50
0
-50
-100
Sweden
Finland
Japan
Korea
Switzerland
United States
Germany
Denmark
Luxembourg
Iceland
Austria
France
Belgium
United Kingdom
Canada
Netherlands
Australia
Norway
Czech Republic
Ireland
Spain
Italy
New Zealand
Hungary
Portugal
Slovak Republic
Greece
Turkey
Poland
Mexico
Source: OECD. Data from 2004 or latest available year. Australian data is for 2004-05 financial year.
Human Resources
Tertiary Education
The proportion of the workforce with a tertiary education is an indicator of the comparative skill level of a
nation’s labour force and provides an indication of the ability of the labour force to utilise and critically
appraise new ideas and technologies. In the 2006 scorecard, 22% of the Australian labour force had a tertiary
education, compared with 20% in the 2004 scorecard and 18% in the 2002 scorecard.
The percentage increase between the 2006 and 2004 scorecard equates to 327 000 extra people in the labour
force who hold tertiary qualifications. Figure 9 shows that Australia performs strongly in this area, ranking 8 th
in the OECD, significantly above the average.
Chapter 4 - Australian innovation scorecard 133

FIGURE 9: Percentage of the workforce with tertiary education compared to the OECD average
80
Percentage difference from the OECD average
60
40
20
0
-20
-40
-60
United States
Norway
Netherlands
Denmark
Iceland
Canada
Korea
Australia
Japan
Sweden
Spain
Switzerland
United Kingdom
Ireland
New Zealand
Finland
Hungary
Poland
Germany
Greece
Mexico
France
Belgium
Luxembourg
Portugal
Czech Republic
Slovak Republic
Italy
Austria
Turkey
Source: OECD. Data from 2004.
Number of Researchers
The number of researchers in the labour force is an indicator of the ability of the economy to generate and
apply new knowledge. In the 2006 scorecard, Australia registered 80 researchers for every 10 000 people in
the labour force. This is a significant increase from 74 researchers in the 2004 scorecard and the 67 researchers
in the 2002 scorecard. Figure 10 shows that Australia ranks 8 th in the OECD and is above the average.
FIGURE 10: Number of researchers per 10 000 labour force compared to the OECD average
Percentage difference from the OECD average
150
100
50
0
-50
-100
Finland
Iceland
Sweden
Japan
United States
Denmark
Norway
Australia
New Zealand
France
Source: OECD. Data from 2004 or earliest available year.
Belgium
Luxembourg
Germany
Canada
Korea
Austria
Switzerland
Ireland
United Kingdom
Spain
Netherlands
Slovak Republic
Portugal
Hungary
Poland
Greece
Czech Republic
Italy
Turkey
Mexico
Science Graduates 6
Figure 11 shows Australia performs well on the number of young science and engineering graduates in the
workforce, ranking 3 rd and being substantially (64%) above the OECD average. In the 2006 scorecard, Australia
has 2020 young science graduates employed for every 100 000 people in the workforce aged 25-34. This is an
increase from the revised figure of 1942 graduates in the 2004 scorecard and is substantially higher than 2002
scorecard figure of 1303 graduates.
6
The methodology for the 2006 scorecard science graduates indicator returns to its original 2002 scorecard form, having been changed in the
2004 scorecard because the relevant data were not then available. The 2006 scorecard utilises the newly available data for science graduates
employed aged 25-34 per 100 000 employed 25-34 year olds.
134 Backing Australia’s Ability

FIGURE 11: Number of science graduates in employment per 100 000 employed 25–34 year olds compared to the OECD average
Percentage difference from the OECD average
100
80
60
40
20
0
-20
-40
-60
-80
Finland
Korea
Australia
France
United Kingdom
New Zealand
Ireland
Sweden
Poland
Slovak Republic
Iceland
Italy
Denmark
Japan
United States
Portugal
Canada
Norway
Spain
Germany
Czech Republic
Switzerland
Netherlands
Greece
Belgium
Mexico
Austria
Hungary
Turkey
Source: OECD. Data for 2004 or earliest available year.
Finance
Venture Capital
The size of the venture capital market provides an indicator of the availability of investment capital for new
businesses with prospects of above average returns for investors. This indicator covers investment in early
stage and expansion venture capital as a percentage of GDP (but does not include management buyouts). In
the 2006 scorecard, Australia’s venture capital investment as a percentage of GDP for Australia was 0.25%.
Figure 12 shows that Australia ranked 2 nd in the OECD for venture capital as a percentage of GDP. 7
FIGURE 12: Investment in venture capital as a percentage of GDP compared to OECD average
Percentage difference from the OECD average
200
150
100
50
0
-50
-100
Korea
Australia
United Kingdom
Finland
Iceland
Spain
United States
Norway
Canada
Denmark
Netherlands
France
Portugal
Sweden
New Zealand
Switzerland
Ireland
Turkey
Italy
Austria
Belgium
Germany
Japan
Source: OECD, ABS. Data from 2003 or latest available data..
7
Caution should be exercised when making direct country comparisons for this indicator. International standards are still in development so
there may be considerable collection and methodology differences between nations. For this reason, it is beneficial to look at trend movements
of Australia and the wider OECD as a whole and not at individual country comparisons. The small decrease in Australian investment in
venture capital between the 2004 and 2006 scorecards contrasts with much larger falls in other OECD countries, with the result that
Australia’s ranking has increased considerably.
Chapter 4 - Australian innovation scorecard 135

Knowledge Diffusion
Investment in ICT 8
The use of information and communication technologies (ICT) is recognised as a significant driver of
economic growth and productivity improvements. In the 2006 scorecard, Australia’s level of investment in ICT
as a percentage of gross fixed capital formation is 22.9%, a decrease from the 2004 scorecard level of 24.7%.
Figure 13 shows, however, that Australia is ranked 4 th , and well above the OECD average.
FIGURE 13: Investment in ICT as a percentage of business sector gross fixed capital formation as a percentage difference
from the OECD average
80
Percentage difference from the OECD average
60
40
20
0
-20
-40
-60
United States
Sweden
Finland
Australia
United Kingdom
Belgium
New Zealand
Denmark
Canada
Netherlands
France
Korea
Italy
Japan
Germany
Portugal
Austria
Norway
Spain
Greece
Ireland
Source: OECD. Data from 2003 or latest available year.
Internet Users
Another measure of the capacity for knowledge diffusion within a country is the number of internet users in
the population. In the 2006 scorecard, Australia has 704 internet users per one thousand of the population,
an increase over the 2004 and 2002 scorecards where Australia had 600 and 465 internet users per one
thousand of the population respectively. Figure 14 shows that Australia performs strongly in this area, ranking
4 th and significantly (33%) above the OECD average.
FIGURE 14: Internet users per 1 000 people compared to the OECD average
Percentage difference from the OECD average
40
20
0
-20
-40
-60
-80
Iceland
Sweden
Denmark
Australia
Norway
Korea
Japan
Finland
United States
Canada
New Zealand
Source: World Competitiveness Yearbook. Data from 2005.
Portugal
Swizterland
Netherlands
Austria
United Kingdom
Luzembourg
Germany
Belgium
Ireland
Italy
France
Czech Republic
Spain
Slovak Republic
Hungary
Poland
Greece
Turkey
Mexico
8
Statistical revisions since the publication of the earlier scorecards have made this indicator more robust. For the 2002 scorecard, data for only nine
countries were available while data for 18 countries were available for the 2004 scorecard. The 2006 scorecard incorporates data for 21 countries
for comparison and due to revisions the data for 21 countries are now available for the years corresponding to the 2002 and 2004 scorecards.
Interestingly, with the new data Australia held its 3rd ranking in the 2002 scorecard and actually improved its ranking from 6th to 3rd in the 2004
scorecard. This places the decrease of one position in its ranking that Australia experienced between the 2004 and 2006 scorecards into perspective.
136 Backing Australia’s Ability

Broadband Subscribers
A new indicator introduced in the 2006 scorecard is the number of broadband subscribers per one thousand
of the population. As ever increasing amounts of sophisticated economic and social activity occurs on the
worldwide web, the speed at which businesses and consumers can connect and do business is becoming more
important. Figure 15 shows that, using 2006 data, Australia is above (12%) the OECD average for broadband
subscribers, ranking 17 th in the OECD.
The number of broadband subscribers has displayed the highest growth of all the indicators in this scorecard.
In 2006 Australia had 174 broadband subscribers per one thousand population, which is substantially up from
77 in 2004 and 35 subscribers per one thousand population in year 2003. This trend suggests that Australia is
rapidly improving its position to take advantage of new commercial opportunities online.
FIGURE 15: Broadband subscribers per 1000 population compared to the OECD average
100
Percentage difference from the OECD average
80
60
40
20
0
-20
-40
-60
-80
-100
Denmark
Netherlands
Iceland
Korea
Swizterland
Finland
Norway
Sweden
Canada
United Kingdom
Belgium
United States
Japan
Luzembourg
Austria
France
Australia
Germany
Spain
Italy
Portugal
New Zealand
Czech Republic
Ireland
Hungary
Poland
Turkey
Slovak Republic
Mexico
Greece
Source: OECD. Data from 2006
Investment in Machinery and Equipment
The extent of investment in new machinery and equipment provides an indication of the ability of the economy
to take advantage of innovations embodied in that machinery and equipment. In the 2006 scorecard, Australia’s
level of investment in new equipment was 7.8% of GDP. This was above the OECD average and ranks
Australia 12 th .
Chapter 4 - Australian innovation scorecard 137

FIGURE 16: Investment in new equipment as a percentage of GDP compared to the OECD average
100
Percentage difference from the OECD average
80
60
40
20
0
-20
-40
-60
Slovak Republic
Czech Republic
Greece
Switzerland
Hungary
Korea
Japan
New Zealand
Italy
Mexico
Austria
Australia
Denmark
Portugal
Poland
Germany
Sweden
Spain
Canada
Iceland
United States
United Kingdom
Netherlands
Luxembourg
Norway
France
Finland
Ireland
Source: OECD. Data from 2004.
Collaboration
Collaboration Activity of Innovators
Collaboration has become an important strategy for innovation success in some instances because it allows
firms to pool their economic and knowledge resources. The ABS innovation survey, mentioned earlier, has
allowed a new collaboration measure to be included in the 2006 scoreboard. Figure 17 shows the percentage
of innovating businesses (those which have introduced new or significantly improved goods, services or
processes) that also have engaged in collaboration activity. Australia ranked 6 th out of the 16 European
countries where comparable data were available and significantly (55%) above the average.
FIGURE 17: Percentage of innovating businesses with collaboration activity as a percentage difference from the EU average
200
Percentage difference from the EU average
150
100
50
0
-50
-100
Finland
Norway
Denmark
Luxembourg
Sweden
Australia
France
Iceland
Netherlands
Greece
Belgium
Austria
Germany
Portugal
Spain
Italy
Source: ABS and EuroStat. Australian Data is from 2003, European countries Data from 1998-2000.
138 Backing Australia’s Ability

Science and Engineering Collaboration
International science and engineering collaboration is an important element in the innovation process, helping
to diffuse technology and make R&D more efficient. In the 2006 scorecard, Australian researchers collaborated
with researchers from 114 other countries on science and engineering articles, an increase of eight countries
from the 2004 scorecard. Figure 18 shows that those countries that have the most international science and
engineering collaboration partners are on the whole located in North America and Western Europe. Australia
ranked 13 th in the OECD.
FIGURE 18: Breadth of international science and engineering collaboration compared to the OECD average
Percentage difference from the OECD average
80
60
40
20
0
-20
-40
-60
-80
United Kingdom
United States
France
Germany
Netherlands
Canada
Switzerland
Japan
Italy
Belgium
Sweden
Spain
Australia
Denmark
Austria
Mexico
Finland
Portugal
Turkey
Norway
Korea
Poland
Czech Republic
New Zealand
Greece
Hungary
Ireland
Slovak Republic
Iceland
Luxembourg
Source: OECD. Data from 2003.
Market Outcomes
Multifactor Productivity
Multi-factor productivity (MFP) growth reflects the contributions of innovations and technological change to
economic growth. Figure 19 shows that Australia’s average annual growth in MFP between 1999 and 2003 is
in line with the OECD average, with the result that Australia ranks 10 th out of 19 OECD countries. Australia’s average
annual MFP growth rate was 1.1% for the 1999-2003 period, slightly down from 1.4% value for the 1997-2001
period reported in the 2004 scorecard.
FIGURE 19: Average annual growth in multi-factor productivity 1999-2003 as a percentage difference from the OECD average
Percentage difference from the OECD average
250
200
150
100
50
0
-50
-100
-150
Ireland
Greece
Finland
Sweden
United Kingdom
United States
New Zealand
France
Japan
Australia
Germany
Canada
Belgium
Austria
Portugal
Netherlands
Denmark
Spain
Italy
Source: OECD Productivity Database 2006.
Chapter 4 - Australian innovation scorecard 139

Percentage of Turnover Attributed to New Innovations
The percentage of turnover attributed to new innovations is another indicator available from the ABS innovation
survey. This indicator measures the percentage of total turnover that arises from new products (that is, not including
products that were unchanged or products that had been changed in minor ways). This can be interpreted as a
measure of the intensity of innovation in each country and of the extent of technological renewal and
upgrading, in value terms. Figure 20 shows that Australia scored considerably below the average for European
members of the OECD for this indicator, ranking 14 th out of 17 European Union countries.
FIGURE 20: Percentage turnover from new goods and services for product innovators as a percentage difference from
the EU average
60
Percentage difference from the EU average
40
20
0
-20
-40
-60
-80
United Kingdom
Denmark
Iceland
Spain
Italy
Finland
Germany
Greece
United States
Portugal
Austria
Belgium
Netherlands
Australia
France
Luxembourg
Norway
Source: OECD. Data from 2001-2003.
Proportion of Innovating Businesses
Another indicator drawn from the ABS Innovation Survey measures the proportion of innovating businesses
in the economy. The Australian data are compared with similar data available for European countries that show
the extent to which firms introduced new or significantly improved goods, services or processes. 9
The industries included in the comparison are mining, manufacturing, utilities, wholesale trade, transport and
storage, communication services, property services and finance and insurance. In these industries 41% of
Australian firms have introduced new or significantly improved goods, services, or processes, slightly above
the average for the European member countries from the OECD. Australia ranked 10 th out of 18 countries
as is shown in Figure 21.
9
Consistent with all indicators derived from the ABS innovation survey, methodology concerns were taken into account to ensure consistency
with the European values. In doing this some industries have been excluded from the analysis, including agriculture, forestry & fishing,
construction, retail trade, accommodation, cafes and restaurants, property services and health and education.
140 Backing Australia’s Ability

FIGURE 21: Percentage of innovating businesses in the economy as a percentage difference from the EU average
40
Percentage difference from the EU average
30
20
10
0
-10
-20
-30
-40
Germany
Iceland
Belgium
Ireland
Luxembourg
Portugal
Austria
Denmark
Netherlands
Australia
Finland
Sweden
France
Italy
Norway
Spain
United Kingdom
Czech Republic
Source: OECD. Data from 2001-2003.
Internet Selling
The final indicator is another new addition to the 2006 scorecard. As shown earlier, Australians are heavy users
of the internet and Figure 22 provides an indication that many Australian firms are also good at utilising the
commercial opportunities that the internet provides. In 2004, 19% of Australian businesses used the internet or
web to sell goods and services. As shown in Figure 22 this ranks us 4 th out of 26 OECD countries and substantially
(55%) above the average.
FIGURE 22: Percentage of businesses using the internet to sell goods and services compared to the OECD average
150
Percentage difference from the OECD average
100
50
0
-50
-100
United Kingdom
Denmark
Sweden
Australia
Ireland
Japan
Germany
Belgium
Netherlands
Switzerland
Luxembourg
Norway
Iceland
Austria
Canada
New Zealand
Czech Republic
Korea
Hungary
Slovak Republic
Portugal
Greece
Poland
Italy
Spain
Mexico
Source: OECD. Data from 2004.
Chapter 4 - Australian innovation scorecard 141

Conclusions
The Australian Innovation Scorecard 2006 provides a snapshot of Australia’s innovation performance relative to other
OECD economies. Being third in the series, it is also possible in some instances to look at Australia’s performance
over time.
Australia improved its performance between the 2004 and 2006 scorecards in nine of the 14 common indicators
and decreased in five. Increases were spread over most of the categories of innovation covered by the scorecard
with the greatest increases being in broadband subscribers and internet usage, two knowledge diffusion
indicators, and in science graduates per 100 000 in the workforce aged 25-34, a human resources indicator.
Substantial increases also occurred in the number of scientific and technical articles per million of the population
and in both business and public R&D expenditures, all of which are knowledge creation indicators. There
were also increases in the percentage of the labour force with tertiary education, number of researchers, both human
resources indicators, and the breadth of international science and engineering collaboration, which is a collaboration
indicator. Australia’s performance decreased in investment in new equipment and investment in ICT, two knowledge
diffusion indicators, average annual multifactor productivity growth, an indicator of market outcomes and in
investment in venture capital, a finance indicator.
Over half of the 14 indicators improved in each of the scorecards since 2002. The most notable was broadband
subscribers per one thousand of the population, which showed a substantial increase in both the 2004-2006
and the earlier 2002-2004 period.
Compared to the OECD average in the 2006 scorecard, Australia ranked among the top 10 OECD countries
in 12 out of the 18 indicators, performing above the average in 14 indicators and below in four. Australia
performed well above the average in a number of areas, including investment in venture capital as a percentage
of GDP, science and technical articles per million of the population, science graduates, broadband subscribers,
innovating businesses with collaboration activity and businesses selling over the internet. Australia was below
the average in four areas, most notably in the number of US patents per million of the population and
innovation turnover as a percentage of sales. However, in some areas where Australia’s performance is below
the OECD average, our performance relative to the OECD average and OECD ranking has improved in the
2006 scorecard compared to the 2004 scorecard.
Overall, the Australian Innovation Scorecard 2006 shows that Australia’s innovation performance has been steadily
improving in many areas and compares favourably with the OECD averages. This bodes well for Australia’s
ability to capitalise on innovative people, processes and technologies.
142 Backing Australia’s Ability

CHAPTER 5: Moving forward with confidence
Key institutions
Prime Minister’s Science, Engineering and Innovation Council
The Prime Minister’s Science, Engineering and Innovation Council (PMSEIC) is the Australian Government’s
principal source of independent advice on issues related to science, engineering and innovation. The Prime
Minister chairs the council.
Non-ministerial members include the Chief Scientist and leaders of many scientific, educational and business
organisations. The Council’s terms of reference are to:
• advise on important issues in science, technology, engineering and relevant aspects of education and
training. This includes their relationship to economic growth, employment creation, the development
of new industries and the sustainable development of new resources;
• examine the contribution of science, technology and engineering to the innovative capacity and economic
and social development of Australia;
• enhance awareness in the community of the importance of science, technology and engineering for
Australia's economic and social development;
• examine Australia's science and engineering resources and the effectiveness of their organisation and use; and
• examine Australia's science and engineering infrastructure and its effectiveness in applying science and
technology to the economic and social development of Australia.
During 2005-06, PMSEIC meetings were held in December and in June. At the December meeting, the
Council considered reports on Biodiscovery, Tsunamis, and The Role of Creativity in the Innovation Economy.
At the June meeting, a report on Asia’s Scientifi c and Economic Growth – Opportunities for Australia was considered, and
presentations were heard from three early career researchers: Dr Sebely Pal (Curtin University of Technology),
Dr Spencer Williams (University of Melbourne) and Ms Jasmin Craufurd-Hill (Australian Nuclear Science and
Technology Organisation) on the opportunities and challenges encountered when establishing a career in research.
More information about PMSEIC can be found at: www.dest.gov.au/pmseic
The Prime Minister, the Hon. John Howard MP, with three
early career researchers, Dr Sebely Pal (Curtin University of
Technology), Dr Spencer Williams (University of Melbourne)
and Ms Jasmin Craufurd-Hill (Australian Nuclear Science
and Technology Organisation). Photo Credit: DEST
The Hon. Julie Bishop MP, Minister for Education, Science and Training, with members of the Prime
Minister’s Science, Engineering and Innovation Council working group on Asia’s Scientific and
Economic Growth- Opportunities for Australia. Photo Credit: DEST
Chapter 5 - Moving forward with confidence 143

Commonwealth State and Territory Advisory Council on Innovation
The Commonwealth State and Territory Advisory Council on Innovation was established by Commonwealth,
State and Territory Industry Ministers in February 2000. With a targeted and strategic approach to innovation issues,
the Council improves the effectiveness, integration and coordination of the national innovation system.
The Council comprises senior representatives of each Commonwealth, state and territory industry department,
state chief scientists and members of state and territory innovation councils or their equivalent. The Australian
Chief Scientist is also a member. Meetings are held twice a year.
Two meetings were held in 2005-06, hosted by Tasmania and Queensland. Issues considered included:
• industry, small to medium-sized enterprises, research linkages and nanotechnology;
• innovation measurement and statistics;
• the Productivity Commission’s Review of public sector support for science and innovation;
• innovation research and policy capabilities in Australia and New Zealand; and
• intellectual property and its commercialisation.
New Zealand joined the council as a full member in June 2006.
Chief Scientist
Dr Jim Peacock AC was appointed Australia’s Chief Scientist in March 2006.
Dr Peacock is Executive Officer of PMSEIC and Chair of the Council’s non-ministerial standing
committee. Dr Peacock was also Chair of the Research Quality Framework Development
Advisory Group and the National Research Priorities Standing Committee.
Dr Peacock’s ex-officio role involves participation in the:
• National Collaborative Research Infrastructure Strategy Committee;
• Cooperative Research Centres Committee;
• Coordination Committee on Science and Technology;
• Science Prizes Committee;
• Publicly Funded Research Agencies Committee; and
• Commonwealth State and Territory Advisory Council on Innovation.
Since his appointment in March 2006, Dr Peacock has met with the Prime Minister and Ministers and departmental
secretaries with portfolio responsibilities relating to science and innovation. He has also held meetings with
ambassadors, industry groups, scientific bodies, research agencies, peak bodies, universities, schools and individuals
providing a focus on building research excellence, collaboration and networking.
The position of Chief Scientist continues to be of great importance. The Australian Government looks to the
Chief Scientist for advice that is current and covers the full spectrum of science, technology and innovation
including goals and priorities for national investment.
More information about the Chief Scientist can be found at: www.dest.gov.au/chiefscientist
144 Backing Australia’s Ability

Australian Research Council
The Australian Research Council’s (ARC) mission is to advance Australia’s research excellence to be globally
competitive and deliver benefits to the community. It is one of the principal avenues for direct support of pure
and strategic basic research in Australian universities. It also fosters collaboration between Australian researchers
and industry, government and community organisations, as well as the international research community.
The ARC is established under the Australian Research Council Act 2001. Its functions are to administer the National
Competitive Grants Programme (NGGP), which comprises a range of funding schemes for research and provide
advice to the Australian Government on Australia’s investment in science and innovation. For more information
on the ARC’s NGGP refer to Chapter 2, Part 1.
On 30 June 2006, the ARC Amendment Act 2006 received Royal Assent giving effect to a number of changes to
the ARC’s governance arrangements, including the retirement of the ARC Board.
More information about the ARC can be found at: www.arc.gov.au
National Health and Medical Research Council
The National Health and Medical Research Council (NHMRC) is Australia’s leading expert agency fostering
health and medical research. It aims to:
• raise the standard of individual and public health throughout Australia;
• foster the development of consistent health standards between the states and territories;
• foster medical training and public health research and training throughout Australia, including urgent
and emerging areas in need of development; and
• consider ethical issues relating to health.
NHMRC is also responsible for overseeing the national regulatory system established under the Research
Involving Human Embryos Act 2002 and Prohibition of Human Cloning Act 2002. It became an independent statutory
agency within the Health and Ageing portfolio on 1 July 2006.
The Industry Research and Development Board
The Industry Research and Development (IR&D) Board is an independent statutory body supported by a
number of committees that helps administer Australian Government programmes designed to encourage and
support innovation in industry.
The Board aims to increase the level of R&D and innovation in Australian industry and improve the
commercial success of these activities. Its functions include:
• providing technical assessments, merit rankings and monitoring applications under Commercial Ready, the
Pharmaceuticals Partnerships Programme, the Industry Cooperative Innovation Programme, the Renewable
Energy Development Initiative and the Motor Vehicle Producer Research and Development Scheme;
• administering the R&D Start programme, the Biotechnology Innovation Fund, the Commercialising Emerging
Technologies programme, the Innovation Investment Fund, the Renewable Energy Equity Fund, and
the Pre-Seed Fund;
• administering aspects of the R&D Tax Concession;
• providing technical advice on the progress of applications and the eligibility of applicants;
• monitoring the administration, delivery and performance of programmes for which it has responsibility
and advising the Minister of outcomes;
• providing advice to the Minister on industry innovation assistance measures;
• studying issues, opportunities, trends and performance relating to industry research, development and
innovation;
Chapter 5 - Moving forward with confidence 145

• promoting and marketing industry innovation activities, programmes and benefits by acting as an
ambassador for industry innovation;
• maintaining the effectiveness and integrity of programmes for which it has responsibility; and
• collecting and analysing data on programme performance and assessing whether programmes are
meeting their objectives.
More information about the Industry Research and Development Board can be found at:
www.ausindustry.gov.au
Australian Biotechnology Advisory Council
The Australian Biotechnology Advisory Council was announced in March 2002 and currently comprises 10 members
drawn from the research, business, industry, health, agriculture and environment sectors.
The Council’s role is to:
• provide high-level independent advice on the role of government, industry and research in biotechnology
development in Australia to the Commonwealth Biotechnology Ministerial Council including advice on
further development and implementation of the National Biotechnology Strategy;
• advise on important biotechnology issues including in relation to economic growth, employment creation,
the development of new industries and the sustainable development of new resources; and
• provide advice on government policies and programmes in support of biotechnology development in
Australia.
Key activities to date include:
• participating in the mid-term and final evaluations of the National Biotechnology Strategy in 2003 and
2004;
• advising the Australian Government Ministerial Council on Biotechnology on the importance of
continued government assistance for early stage biotechnology development;
• providing input to the development of the National Research Priorities;
• preparing a submission to the Lockhart Review of the Prohibition of Human Cloning Act 2002 and the
Research Involving Human Embryos Act 2002; and
• providing input for the identification of biotechnology capabilities for the National Capability Statement
(Australia’s Biotechnology Capabilities), launched in November 2005.
Proposed activities for 2006-07 include:
• providing advice to government on current reviews relevant to the sector including issues surrounding
the intended evaluation of the National Biotechnology Strategy in 2007; and
• continuing to provide direction on the development of a national 10-year strategic plan for biotechnology
and other initiatives aimed at strengthening national efforts on biotechnology development through
the National Biotechnology Strategy.
More information about the Australian Biotechnology Advisory Council can be found at:
www.biotechnology.gov.au
146 Backing Australia’s Ability

Business, Industry and Higher Education Collaboration Council
The Business, Industry and Higher Education Collaboration Council (BIHECC) advises the Minister for
Education, Science and Training on ways to increase collaboration between the higher education sector and other
public and private business, industry, community and educational organisations.
Members have been drawn from across the business and academic sectors and bring with them enormous
experience in their respective fields.
The Council has developed a work programme for 2006-2008, which includes:
• engaging the higher education and business sectors in the development of an instrument specifically
tailored to assess the generic and employability skills of graduates;
• mapping the gaps in available knowledge about long-term graduate destinations and defining a
hypothesis to scope future work;
• setting priorities for projects for funding from the Collaboration and Structural Reform Fund and
providing advice on recommendations for future rounds;
• developing advice to the Minister on knowledge transfer;
• developing an overview of the current state of science and engineering infrastructure in universities
and exploring the extent to which alternative funding structures are being used or considered by
Australian universities; and
• proposing ways in which business and the higher education sector can contribute to the issues identified
in the science, engineering and technology skills audit.
BIHECC is subject to review in October 2009.
Innovative knowledge exchange
The Business, Industry and Higher Education Collaboration Council is working to identify best practice
in knowledge transfer and ensure Australia’s innovation system remains internationally competitive.
The council’s current work programme includes developing advice to the Minister for Education, Science
and Training on knowledge transfer, drawing on the high-level business, industry and higher education
expertise of its members. Knowledge exchange networks act as vital intermediaries in the innovation
cycle, putting researchers in contact with research users and vice versa.
In 2005, the council commissioned a report into knowledge exchange networks in Australia’s innovation
system. The report outlines the networks and organisations that exist in Australia for the exchange and
diffusion of knowledge from universities and research institutions to the wider community. It provides
case studies on effective best practice and outlines how knowledge exchange networks can provide links
to relevant resources, websites and potential business partners, and access to information about current
research and development news, activities and events.
The report identifies a number of good examples of effective knowledge exchange networks between
universities and research and development corporations supported by industry and government including
those operating in the rural animal and plant development sector and the mining industry. It concludes
that some of the most effective knowledge exchange networks, in terms of the transfer of knowledge
from the creators of knowledge to industry users, are those that are sponsored and supported by industry
through industry associations, for example, the InnovationXchange supported by the Australian Industry
Group and the Department of Industry, Tourism and Resources.
Chapter 5 - Moving forward with confidence 147

Australian Bureau of Statistics
The Australian Bureau of Statistics (ABS) is the Australian Government’s national statistical agency. Through
the ABS, Australia has one of the world’s best systems for collecting highly reliable statistics on innovation,
information and communications technology, R&D and related topics. These are prepared to conform to
OECD standards, which enable broad international comparisons. The ABS works closely with a wide range of
stakeholders representing Australian and state government departments and agencies, universities, research
institutions, not-for-profit organisations and private industry.
During 2005-06, the ABS released nine major publications on innovation related topics including five on information
and communication technology, two on research and experimental development and two on innovation.
ABS researchers have analysed the 2003 Innovation Survey data to show the strong links between the extent of
the use of information technology by businesses and their ability to innovate in products and services and operational
and managerial processes. Initial results were presented in the Innovation Analysis Forum conference organised
by the Department of Industry, Tourism and Resources in April 2006.
The ABS has been working with Biotechnology Australia on the production of an information development
plan for biotechnology statistics. The plan will include a framework to identify statistical measures to quantify the
size and growth of the biotechnology sector and its contributions to the Australian economy.
An ABS senior manager served on the OECD’s National Experts in Science, Technology and Innovation Committee
during the year and the bureau also contributed to the revision of OECD’s Fields of Science classification published
as part of Frascati Manual, which is widely used by OECD member countries for framework development
and international comparison of R&D data.
Three collaborative projects were instigated during the period with other organisations to examine the effects
of innovation on business performance. The projects determine the effects of innovation through the analysis
of micro data collected by the ABS Innovation Survey 2003. The collaborations have been with the Department
of Industry, Tourism and Resources, the University of South Australia and the Productivity Commission.
More information about the ABS can be found at: www.abs.gov.au
Monitoring and evaluation
Commonwealth government science and technology priorities are open to public scrutiny in a variety of
ways. This scrutiny includes an evaluation of the content in the annual reports of departments, information
from research agencies and funding bodies, portfolio budget statements and the work of parliamentary
committees. Formal evaluation programmes are also in place. Each year at Budget time, the government
releases detailed information on the funding of programmes and incentives for science and innovation.
Through the Australian Bureau of Statistics, Australia has one of the world’s best systems for collecting
highly reliable statistics on innovation, R&D and related topics. These are prepared to conform to OECD
standards, enabling broad international comparisons to be made across available statistical outputs.
The Australian Bureau of Statistics conducted an industry-wide Innovation Survey for the 2003 reference
period with survey results released on 17 February 2005. The results were published in Innovation in
Australian Business, 2003 (cat. no. 8158.0). The survey scope covers most Australian market sectors and
includes businesses identified as having five or more employees. The main topics covered included
innovation activities and outputs, cooperation and linkages, sources of information, technology transfer,
innovation barriers and innovation expenditure. A key focus of this survey was to provide reliable data that could
enable the impacts of innovation on the productivity and performance of businesses to be assessed.
The Australian Bureau of Statistics has also undertaken a number of joint collaborations with other
organisations aimed at assessing the impacts of innovation on businesses and links to productivity. Results
from the collaboration with the Department of Industry, Tourism and Resources that have been
148 Backing Australia’s Ability

Monitoring and evaluation
published in 2006 are Patterns of Innovation in Australian Businesses, 2003 (cat. no. 8163.0) and
Collaboration and other Factors Influencing Innovation Novelty in Australian Businesses – An Econometric
Analysis (Department of Industry, Tourism and Resources, Industry Policy Division, April 2006). A third
publication outlining the results of further econometric analyses completed by the Department of
Industry, Tourism and Resources is expected to be released in late 2006.
The Australian Bureau of Statistics has also conducted an innovation survey for the 2005 reference
period, which achieved a response rate of 93%. The first release of summary information from the survey
is due in December 2006 and will include international comparisons. Further data from the survey will be
released via the Bureau’s website as they become available. The 2003 data will be adjusted to reflect
changes in reference periods between the 2003 and 2005 innovation surveys.
The Australian Bureau of Statistics is also conducting an integrated business characteristics survey, which aims
to provide analysts with a rich dataset containing data on business demographics, innovation and business
use of IT and other topics. Core questions on innovation are included in the survey each year. More detailed
questions on innovation and business use of IT will be asked on a biennial basis. The survey will be an
important statistical resource for further research into the linkages between the economic performance
of firms and adoption of innovative practices, use of IT and other changes that effect a firm’s productivity,
growth and other characteristics.
For many years, the Australian Bureau of Statistics has conducted R&D surveys of businesses, higher
education institutions, government and not-for-profit organisations. Major topics covered include resources
devoted to R&D (financial and human) and expenditure by a range of variables such as industry, location,
business size and source of funds. The Bureau released the results from the R&D survey programme in
2006 which can be found in:
• Research and Experimental Development, Higher Education Organisations, Australia, 2004
(cat. no. 8111.0) on 27 July;
• Research and Experimental Development, Businesses, Australia, 2004-05 (cat. no. 8104.0) on
28 August;
• Research and Experimental Development, Government and Private Non-profit Organisations,
Australia, 2004-05 (cat. no. 8109.0) on 6 October; and
• Research and Experimental Development, All Sector Summary, Australia, 2004-05 (cat. no. 8112.0)
on 11 October.
The Australian Bureau of Statistics compiled an information and communication technology (ICT) satellite
account for 2002-03 following strong external interest in the sources of supply of ICT goods and services
and the use of such products. Australian National Accounts: Information and Communication
Technology Satellite Account, 2002-03 (cat. no. 5259.0) provides more information. This publication
represents the first official satellite account on ICT and its direct contribution to the Australian economy.
In particular, it contains data on the contribution of ICT to key macro-economic variables such as gross
domestic product, investment, imports and exports. As this satellite account constitutes an integrated set
of statistics on ICT products and services within the internationally recognised Australian System of
National Accounts, it represents a valuable policy and research tool with a wide range of applications.
Chapter 5 - Moving forward with confidence 149

Informing the future
House of Representatives Standing Committee Inquiry into Pathways to Technological Innovation
On Monday 19 June 2006, the Standing Committee on Science and Innovation tabled its report on the inquiry
into pathways to technological innovation entitled Pathways to Innovation. Improving linkages and collaborations
between the public and private sectors, fostering a more entrepreneurial culture in Australia, and better
publicising the range of innovation assistance available are some of the issues addressed in the report.
The report’s recommendations highlight a number of concerns for consideration, such as:
• promotion of the government assistance that is available to businesses;
• better fostering a culture of entrepreneurship in Australia;
• providing a scheme of matched government - university funding to support projects at the proof of
concept stage; and
• Investigating mechanisms to direct more government procurement to technological innovation from
Small & Medium Enterprises.
The inquiry received more than 100 submissions and public hearings were held around Australia, as well as a
number of site visits to businesses and research institutes.
More information about the inquiry can be found at: www.aph.gov.au/house/committee/scin/
pathways/report.htm
Productivity Commission’s Review of Public Support for Science and Innovation
The Australian Government has identified science and innovation as one of its strategic priorities, recognising
its contribution to Australia’s economic and social prosperity. The government has provided significant support
for science and innovation, which it has augmented since 2001 through Backing Australia’s Ability, and funding
now exceeds $5 billion a year. In light of this investment, the Australian Government considers that a study
of public support for science and innovation is warranted. This study will complement the ongoing and planned
reviews of Backing Australia’s Ability programmes.
The Productivity Commission has been asked to report on the economic impact of public support for science
and innovation in Australia and, in particular, its impact on Australia’s recent productivity performance. It has
also been asked to report on whether there are adequate arrangements to benchmark outcomes from publicly
supported science and innovation and to report on those outcomes as measured by the benchmarks.
The Productivity Commission has also been asked to:
• Identify impediments to the effective functioning of Australia's innovation system including knowledge
transfer, technology acquisition and transfer, skills development, commercialisation, collaboration
between research organisations and industry, and the creation and use of intellectual property, and
identify any scope for improvements.
• Evaluate the decision-making principles and programme design elements that influence the effectiveness
and efficiency of Australia's innovation system, guide the allocation of funding between and within the
different components of Australia's innovation system and identify any scope for improvements and, to
the extent possible, comment on any implications from changing the level and balance of current support.
• Report on the broader social and environmental impacts of public support for science and innovation
in Australia.
The Commission produced a final report in March 2007.
More information can be found at: www.pc.gov.au/study/science/index.html
150 Backing Australia’s Ability

Backing Australia’s Ability Evaluation Plan
An evaluation of Backing Australia’s Ability is to be undertaken to examine the evidence that the overarching
goals have been achieved. It is envisaged that evidence will come from two separate but complementary
aspects. The first is the analysis of the total package and the second is the contributions that the individual
programmes have made. Combining these will capture not only the net contribution of individual programmes
but also the synergies, interconnectivity and spill-overs that make the package greater than the sum of its parts.
It is envisaged that this work will be undertaken within the next few years.
Chapter 5 - Moving forward with confidence 151

152 Backing Australia’s Ability

APPENDICES
Appendix 1 Major flows of funding for R&D in Australia, 2004-05
Appendix 2
Overview of Australia’s gross domestic expenditure on R&D - by sector of performance,
1978-79 to 2004-05
Appendix 3 Overview of Australia’ gross domestic expenditure on R&D - by source of funds, 1978-79
to 2004-05
Appendix 4
Backing Australia’s Ability 10 year funding table
Appendix 5 Overview of R&D in regions - by state and territory, 2004-05
Appendix 6
Appendix 7
Appendix 8
2006 Federation Fellows
National Research Priorities and associated goals
Cooperative Research Centres
Appendix 9 ARC-funded Centres 2006
Appendix 10
Rural Research and Development Corporations
Appendices 153

Appendix 1: Major flows of funding for R&D in Australia, 2004-05
SOURCES OF FUNDING
Australian Government
$5,640m
Business
$8,146m
State/Territory
and local governments
$842m
Other Australian
$576m
Overseas
$569 million
$1,334m
$3,669m
$148m
$571m
$243m
$7,718m
$316m
$331m
$159m
$192m
Australian Government
$1,573m
Higher education
$4,283m
State/Territory
governments $977m
Private non-profit
$493m
Business
$8,446m
SECTORS OF PERFORMANCE
Source: Science and Innovation Analysis Section, DEST, based on ABS R&D data.
154 Backing Australia’s Ability

Appendix 2: Overview of Australia’s gross domestic expenditure on R&D (GERD) – by sector of performance, 1978-79 to 2004-05
Sector of performance 1978-79 1981-82 1984-85 1986-87 1988-89 1990-91 1992-93 1994-95 1996-97 1998-99 2000-01 2002-03 2004-05
Current Prices ($million)
Business 245.8 396.6 721.3 1,280.1 1,798.3 2,099.8 2,861.9 3,508.3 4,234.7 4,094.7 4,982.6 6,940.3 8,446.2
Government 469.9 714.7 955.3 1,154.9 1,352.3 1,704.0 1,823.9 1,976.1 2,064.3 2,043.0 2,355.8 2,482.2 2,550.7
Australian Gov. 321.2 514.8 669.4 786.5 869.6 1,034.0 1,155.4 1,193.3 1,266.6 1,179.4 1,404.8 1,531.3 1,573.4
State Gov. 148.7 199.9 285.9 368.4 482.7 670.0 668.5 782.8 797.7 863.6 951.0 950.9 977.3
Higher Education 325.5 452.5 685.7 881.7 1,072.9 1,332.8 1,695.2 1,829.6 2,307.6 2,555.1 2,789.8 3,429.6 4,282.8
Private non-profit 12.6 20.9 43.5 49.1 53.3 85.4 101.9 152.7 185.8 225.3 289.0 359.5 493.2
Total 1,053.8 1,584.7 2,405.8 3,365.8 4,276.8 5,222.0 6,482.9 7,466.7 8,792.4 8,918.1 10,417.1 13,211.6 15,772.9
Chain Volume Measures ($million at 2004-05 prices)
Business – – – 2,383.8 2,992.2 3,078.0 3,992.0 4,726.9 5,432.6 5,041.3 5,604.5 7,363.8 8,446.2
Government – – – 2,034.3 2,148.9 2,467.4 2,495.4 2,614.6 2,607.6 2,393.9 2,674.3 2,666.5 2,550.7
Australian Gov. – – – 1,385.4 1,381.9 1,497.2 1,580.8 1,578.9 1,599.4 1,378.9 1,592.9 1,644.7 1,573.4
State Gov. – – – 648.9 767.0 970.2 914.6 1,035.7 1,008.4 1,015.4 1,081.6 1,021.9 977.3
Higher Education – – – 1,617.5 1,795.3 2,003.9 2,381.9 2,480.1 2,962.0 3,121.0 3,179.0 3,631.0 4,282.8
Private non-profit – – – 95.7 91.2 128.6 144.7 210.7 240.3 276.9 327.5 385.4 493.2
Total – – – 6,131.4 7,027.6 7,677.9 9,014.1 10,032.3 11,242.5 10,833.1 11,785.3 14,046.7 15,772.9
Appendices 155

Appendix 3: Overview of Australia’s gross domestic expenditure on R&D - by source of funds, 1978-79 to 2004-05
Source of funds 1978-79 1981-82 1984-85 1986-87 1988-89 1990-91 1992-93 1994-95 1996-97 1998-99 2000-01 2002-03 2004-05
Current Prices ($million)
Business 217.5 319.5 674.3 1,251.8 1,781.5 2,148.2 2,851.9 3,451.0 4,203.9 4,091.6 4,821.1 6,696.0 8,145.8
Government 806.1 1,154.3 1,648.6 1,983.2 2,305.8 2,868.2 3,257.2 3,542.2 4,023.3 4,177.8 4,741.0 5,440.2 6,481.8
Australian Gov. 666.0 975.6 1,386.2 1,662.2 1,883.3 2,282.4 2,679.8 2,865.8 3,356.5 3,439.3 3,929.9 4,614.0 5,639.8
State Gov. 140.1 178.7 262.4 321.0 422.5 585.8 577.4 676.4 666.8 738.5 811.1 826.1 842.0
Other Australian 13.5 32.4 58.6 83.9 91.2 141.4 255.7 328.3 384.5 422.6 493.4 603.0 576.0
Overseas 16.8 16.1 26.0 29.0 57.0 64.2 118.1 145.2 180.6 226.1 361.7 472.4 569.3
Total 1,053.8 1,522.2 2,407.5 3,347.9 4,235.5 5,222.0 6,482.9 7,466.7 8,792.4 8,918.1 10,417.1 13,211.6 15,772.9
Chain Volume Measures ($million at 2004-05 prices)
Business – – – 2,331.1 2,964.2 3,148.9 3,978.1 4,649.7 5,393.1 5,037.7 5,423.1 7,104.5 8,145.8
Government – – – 3,493.4 3,664.1 4,153.2 4,456.4 4,686.7 5,081.8 4,894.9 5,381.4 5,844.6 6,481.8
Australian Gov. – – – 2,928.0 2,992.7 3,305.0 3,666.4 3,791.7 4,239.6 4,029.6 4,460.7 4,957.0 5,639.8
State Gov. – – – 565.4 671.4 848.2 790.0 894.9 842.2 865.3 920.7 887.5 842.0
Other Australian – – – 278.0 316.8 294.1 429.2 516.3 535.3 621.4 573.0 596.3 576.0
Overseas – – – 54.2 95.1 94.4 165.3 196.3 232.3 279.1 407.9 501.2 569.3
Total – – – 6,156.7 7,040.2 7,690.6 9,029.0 10,048.9 11,242.5 10,833.1 11,785.3 14,046.7 15,772.9
156 Backing Australia’s Ability

Appendix 4: Backing Australia’s Ability 10 year funding table
2001-02
($m)
2002-03
($m)
2003-04
($m)
2004-05
($m)
2005-06
($m)
2006-07
($m)
2007-08
($m)
2008-09
($m)
2009-10
($m)
2010-11
($m)
Initial
5 year total
($m)
Additional
7 year total
($m)
10 Year
Total ($m)
COMMERCIALISATION
R&D Start – 41.9 117.6 174.7 200.7 534.9
R&D Start reprioritisation -16.2 -3.1 -19.3
Innovation Access Programme - Industry – 9.1 10.7 14.2 15.9 49.8
Innovation Access Programme reprioritisation -2.0 -6.0 -8.0
Biotechnology Innovation Fund 5.0 5.0 10.0 – – 20.0
Commercial Ready Programme 5.5 16.7 185.1 200.0 214.0 221.0 221.0 1063.3 1640.7
COMET
10.0 10.0 10.0 10.0 – 40.0
3.8 13.3 17.4 17.8 18.2 17.9 11.6 100.0 140.0
Biotechnology World Class Centre 1.5 3.8 5.0 6.2 7.5 24.0
National Stem Cell Centre (a) 0.0 0.0 7.0 6.5 6.2 5.5 5.2 30.4 54.4
Cooperative Research Centres (CRC) Programme (b) – – 55.0 57.0 64.0 44.9 64.3 31.3 43.0 -5.0 227.0 127.5 354.5
Pre-Seed Fund (c)
3.7 12.6 12.6 12.6 9.6 50.9
– – 7.6 6.6 5.6 4.6 3.6 27.8 78.7
Information Technology Online (ITOL) 1.0 3.0 3.0 3.0 3.0 13.0 13.0
Building on IT Strengths (BITS) Incubator 13.0 11.0 8.0 4.0 – – – 36.0 36.0
New Industries Development Programme (NIDP) Mark II 5.1 5.2 5.2 5.2 1.0 21.7
New Industries Development Programme III – – 3.1 3.0 3.1 3.2 1.6 14.0 35.7
RESEARCH AND DEVELOPMENT
ARC National Competitive Grants Programme (a)
19.2 92.5 142.8 205.4 276.5 736.4
-0.4 -1.4 273.5 286.8 296.0 301.9 307.9 1464.2 2200.6
Research Infrastructure Block Grants
26.8 47.7 68.7 89.3 104.5 337.0
– – 106.6 108.7 110.9 113.1 115.3 554.5 891.5
Systemic Infrastructure Initiative 26.3 53.2 54.4 55.5 56.6 246.0
Major National Research Facilities Programme (e) 5.0 20.0 30.0 50.0 50.0 155.0
National Collaborative Research Infrastructure Strategy 1.9 15.1 100.3 102.7 104.9 107.3 109.7 542.0 943.0
Appendices 157

Appendix 4: Backing Australia’s Ability 10 year funding table (continued)
2001-02
($m)
2002-03
($m)
2003-04
($m)
2004-05
($m)
2005-06
($m)
2006-07
($m)
2007-08
($m)
2008-09
($m)
2009-10
($m)
2010-11
($m)
Initial
5 year total
($m)
Additional
7 year total
($m)
10 Year
Total ($m)
Innovation Access Programme - International Science and Technology – 7.5 8.5 10.2 11.1 37.2
International Science Linkages – – 10.5 10.8 11.0 11.4 11.7 55.5 92.7
Developing Quality and Accessibility Frameworks for Publicly Funded
Research
1.1 1.7 – – – – – 2.8 2.8
Regional Protection Funding (d) 3.0 3.1 3.1 3.2 – – – 12.4 12.4
CSIRO National Flagship Initiative (d) 30.0 35.0 40.0 50.0 50.0 50.0 50.0 305.0 305.0
Health and Medical Research - overhead infrastructure support 26.0 27.0 28.0 29.0 30.0 30.0 30.0 200.0 200.0
Building on IT Strengths (BITS) Advanced Network (d) 8.3 7.3 5.4 – – – – 21.0 21.0
ICT Centre of Excellence (a)
4.5 8.8 12.0 17.7 24.0 67.0
– – 24.2 24.8 25.3 25.7 26.2 126.3 193.3
R&D Tax Concession (f) 6.0 4.0 -3.6 20.6 32.0 59.0
R&D Tax Concession – – 80.0 70.0 70.0 80.0 90.0 390.0 449.0
Research Support for
Counter Terrorism (a)
1.0 2.0 2.1 2.1 – – – 7.2 7.2
SKILLS DEVELOPMENT
Questacon - Smart Moves 0.7 1.2 1.2 0.6 – 3.7
Questacon - Raising
Science Awareness
1.0 1.7 1.7 1.8 1.8 1.8 1.8 11.4 15.1
National Innovation
Awareness Strategy
4.3 5.8 5.8 6.4 9.0 31.3
Science Connections Programme 0.3 0.6 4.7 4.9 5.0 5.1 5.2 25.8 57.1
Science, Maths and Technology in Government Schools 33.1 34.9 36.8 38.7 40.8 184.3
Fostering Scientific, Mathematical, Technological Skills and
Innovation in Government Schools (g)
– – – – – – – 0.0 184.3
2000 Additional Targeted University Places (h)
13.9 24.7 33.0 39.5 39.9 151.0
39.9 39.9 39.9 39.9 39.9 199.5 350.5
Boosting Innovation, Science, Mathematics and Technology Teaching 6.3 10.8 5.6 5.8 4.5 3.3 2.5 38.8 38.8
158 Backing Australia’s Ability

Appendix 4: Backing Australia’s Ability 10 year funding table (continued)
Online Curriculum Content 4.5 7.2 7.4 7.5 7.5 34.1 34.1
PELS (i) 0.7 -2.0 -7.7 -11.7 -15.9 -36.6 -36.6
Attracting ICT Workers -0.5 -0.5 -0.6 -0.6 -0.7 -2.9 -2.9
National Biotechnology Strategy and Biotechnology Australia (d) 5.0 5.0 5.0 5.0 – – – 20.0 20.0
Total 170.8 395.5 617.7 899.4 1076.6 1003.7 1047.6 1027.6 1064.5 1028.3 2983.8 5348.0 8331.8
Total Funding for the ARC and CRC
2001-02
($m)
2002-03
($m)
2003-04
($m)
2004-05
($m)
2005-06
($m)
2006-07
($m)
2007-08
($m)
2008-09
($m)
2009-10
($m)
2010-11
($m)
2001-
2006 ($m)
2006-
2011 ($m)
10 year
total ($m)
ARC National Competitive Grants Programme 265.2 298.3 413.9 481.4 556.5 566.3 577.7 591.9 603.7 615.8 2015.3 2955.4 4970.7
Cooperative Research Centres (CRC) Programme 145.3 148.6 202 193 206.4 187.3 210.2 180.7 196.1 151.6 895.3 925.9 1821.2
This table shows the total funding for the Australian Research Council’s National Competitive Grants Programme and the Cooperative Research Centres (CRC) Programme over this period. It includes base funding and additional funding provided through BAA.
Totals may not sum due to rounding. 2001-02 to 2005-06 numbers (yellow) are as announced for BAA in the 2001-02 Budget. There have been some movements between years since then but it remains approximately a $3 billion package. 2004-05 to 2010-11 numbers (blue)
include continuing BAA initiatives and decisions in the 2003-04 Budget ($275 million for ARC, $62.5 million for the CRC Programme and $41 million for the R&D Start Programme in 2006-07) and in the 2004-05 Budget. Programmes that have been merged or
refocused in the 2004-05 budget are grouped together.
(a) The National Competitive Grants Programme will allocate funding to the National Stem Cell Centre ($27.5 million) and the ICT Centre of Excellence ($124.7 million) in addition to the funding provided to the centres directly, over the period 2006-07 to 2010-11.
Funding of $7.2 million over four years will also be provided from this programme to the Department of Prime Minister and Cabinet to fund targeted counter-terrorism research. Total funding for the ARC (including base funding) is $556.5 million in 2005-06
and $566.3 million in 2006-07.
(b) For the CRC Programme, because BAA funds have been moved to later years to better align the funding profile with expenditure under the programme, the 5 year and 7 year totals are not the sum of the respective years. The 5 year total includes the amount
committed in the 2001-02 Budget and the 7 year total is the additional funds committed in the 2003-04 Budget ($62.5 million) and 2004-05 Budget ($65 million).
(c) The Pre-Seed fund was originally provided with $78.7 million over five years when BAA was announced as follows: $6.4m in 2001-02, $16.9m in 2002-03, $21.8m in 2003-04, $21.8m in 2004-05 and $11.8m in 2005-06. This programme was rephrased in August
2001 over 10 years to reflect the change from a grant programme to a loan programme.
(d) Continues an existing programme that was not previously included in BAA.
(e) Funding for MNRF has been re phased since the government’s announcement of BAA in 2001-02 to allow for earlier expenditure of funds. With re phased MNRF funding of $40.7 million in 2005-06, total funding for MNRF and Systemic Infrastructure in 2005-06 is
$97.3 million. This compares with funding of $100.3 million provided in 2006-07 under the National Collaborative Research Infrastructure Strategy.
(f) R&D tax concession figures include the premium tax concession, the tax offset and streamlining the 125% tax concession. These figures were the best estimates available at the announcement of BAA in the 2001-02 Budget and have been refined since this date.
The refined estimate is $77 million in 2005-06. This compares with $80 million for 2006-07.
(g) Resourcing for this programme does not have a budget impact beyond 2005-06 as provision for this funding is already in the Forward Estimates (with a total of $93.2 million a year being provided from 2004-05 to 2010-11). An estimated $373 million will be
provided for this programme to those states/territories that trigger an Enrolment Benchmark Liability over the next four years.
(h) Funding in 2006-07 to 2010-11 is an estimate of the nominal cost of these places that are now funded within the general allocations for universities.
(i) PELS has not been integrated into a new loan facility, FEE-HELP as part of the Our Universities - Backing Australia’s Future initiative announced in the 2003-04 Budget. Funding for PELS continues, however estimates have not been included beyond 2005-06
in this table as the objectives of this programme are now being funded through a separate initiative.
Appendices 159

Appendix 5: Overview of R&D in regions – by state and territory, 2004-05
Business Australian Government State/Territory Government Higher Education
Private
Non-Profit
Gross Domestic R&D
Expenditure
Current Prices $million
Per capita $
% of GSP (%)
Current Prices $million
Per capita $
% of GSP (%)
Current Prices $million
Per capita $
% of GSP (%)
Current Prices $million
Per capita $
% of GSP (%)
Current Prices $million
Per capita $
% of GSP (%)
Current Prices $million
Per capita $
% of GDP (%)
Location
NSW 3,157.0 466.4 1.03 261.6 38.7 0.09 299.0 44.2 0.10 1,192.8 176.2 0.39 137.1 20.3 0.04 5,047.5 745.7 1.65
Vic 2,405.0 478.8 1.08 406.2 80.9 0.18 201.9 40.2 0.09 1,052.6 209.6 0.47 272.0 54.1 0.12 4,337.7 863.5 1.95
Qld 1,037.2 260.8 0.65 159.4 40.1 0.10 234.9 59.1 0.15 715.6 179.9 0.45 13.1 3.3 0.01 2,160.2 543.2 1.36
SA 530.3 343.9 0.89 242.3 157.1 0.40 104.6 67.8 0.17 325.4 211.0 0.54 7.0 4.6 0.01 1,209.6 784.4 2.02
WA 1,051.2 522.7 1.04 105.6 52.5 0.10 101.0 50.2 0.10 442.3 219.9 0.44 37.9 18.8 0.04 1,737.9 864.2 1.72
Tas 73.6 151.5 0.46 109.5 225.4 0.68 3.6 7.3 0.02 83.7 172.3 0.52 0.2 0.4 0.00 270.5 556.9 1.68
NT 30.9 151.7 0.30 28.2 138.7 0.27 24.7 121.3 0.24 33.0 162.3 0.32 n.p. n.a. n.a. n.p. n.a. n.a.
ACT & Ext Terr 76.0 231.3 0.37 257.9 785.1 1.26 2.9 8.7 0.01 437.4 1,331.7 2.14 3.2 9.7 0.02 777.3 2,366.5 3.79
Overseas 85.1 n.a. n.a. 2.8 n.a. n.a. 4.9 n.a. n.a. – n.a. n.a. n.p. n.a. n.a. n.p. n.a. n.a.
Total 8,446.2 419.2 0.95 1,573.4 78.1 0.18 977.3 48.5 0.11 4,282.8 212.6 0.48 493.2 24.5 0.06 15,772.9 782.8 1.76
160 Backing Australia’s Ability

Appendix 6: 2006 Federation Fellowships
Professor John Braithwaite, Restorative justice and responsive governance: fresh challenges, new theory, global networks
(Host institution: Australian National University) (second Federation Fellowship).
Dr Paul Burn, Dendritic organic semiconductors (Host institution: University of Queensland).
Professor Mark Burry, Complex architecture and convergent design (Host institution: RMIT University).
Professor David Fairlie, Chemical mimics of bioactive protein surfaces (Host institution: University of Queensland).
Professor Christopher Goodnow, Discovering genes and mechanisms regulating immune responses
(Host institution: Australian National University).
Professor Martin Green, Nanostructured silicon-based tandem solar cells
(Host institution: University of New South Wales) (second Federation Fellowship).
Professor Paul Haddad, Separation science based on nanoparticle-coated monolithic scaffold stationary phases
(Host institution: University of Tasmania).
Professor Peter Hall, Nonparametric statistical methods—new directions, theory and applications
(Host institution: University of Melbourne).
Professor Terence Hughes, Science for resilience of coral reef systems
(Host institution: James Cook University) (second Federation Fellowship).
Professor David Karoly, Improving understanding of climate change and its impacts in Australia
(Host institution: University of Melbourne).
Professor Benedict Kiernan, Cambodia—place, people and politics: environmental, economic, cultural, political and regional
history since earliest times
(Host institution: University of Sydney).
Professor Timothy Lindsey, Islam and modernity: Syari’ah, terrorism and governance in South-East Asia
(Host institution: University of Melbourne).
Associate Professor Ivan Marusic, Wall turbulence drag: physical mechanisms and practicable control strategies
(Host institution: The University of Melbourne).
Professor Geoffrey McFadden, Drug targets in malaria parasites (Host institution: University of Melbourne).
Professor Keith Nugent, Coherent X-ray science and biophysics
(Host institution: University of Melbourne) (second Federation Fellowship).
Professor Michael Parker, Structural neurobiology—developing a new capability in Australia to treat mental illness
(Host institution: St Vincent’s Institute of Medical Research).
Professor Hugh Possingham, Theory for global biodiversity conservation (Host institution: University of Queensland).
Dr Jamie Rossjohn, An investigation into infection, immunity and rational drug design (Host institution: Monash University).
Dr Toni Shippenberg: Cellular and neurochemical basis of drug addiction (Host institution: University of Sydney).
Associate Professor David Studdert, Using law to improve population health and the quality of health care services
(Host institution: University of Melbourne).
Professor Graeme Turner, Television in the post-broadcast era: the role of old and new media in the formation of national communities
(Host institution: University of Queensland).
Professor Pascal van Hentenryck, Adaptive and integrated resource allocation (Host institution: Monash University).
Professor Guifre Vidal, Quantum information and entanglement: a new framework for science and technology with quantum
many-body systems (Host institution: University of Queensland).
Professor Gordon Wallace, Nanobionics (Host institution: University of Wollongong).
Professor Andrew White, Integrated quantum photonics (Host institution: University of Queensland).
Appendices 161

Appendix 7: National Research Priorities and associated goals
Priority – An Environmentally Sustainable Australia
• Goal: Water – a critical resource
• Goal: Transforming existing industries
• Goal: Overcoming soil loss, salinity and acidity
• Goal: Reducing and capturing emissions in transport and energy generation
• Goal: Sustainable use of Australia’s biodiversity
• Goal: Developing deep earth resources
• Goal: Responding to climate change and variability
Priority – Promoting and maintaining good health
• Goal: A healthy start to life
• Goal: Ageing well, ageing productively
• Goal: Preventive health care
• Goal: Strengthening Australia’s social and economic fabric
Priority – Frontier technologies for building and transforming Australian industries
• Goal: Breakthrough science
• Goal: Frontier technologies
• Goal: Advanced materials
• Goal: Smart information use
• Goal: Promoting an innovation culture and economy
Priority: Safeguarding Australia
• Goal: Critical infrastructure
• Goal: Understanding our region and the world
• Goal: Protecting Australia from invasive diseases and pests
• Goal: Protecting Australia from terrorism and crime
• Goal: Transformational defence technologies
162 Backing Australia’s Ability

Appendix 8: Cooperative Research Centres
Manufacturing technology
CAST Cooperative Research Centre
http://www.cast.crc.org.au/
CRC for Advanced Composite Structures
http://www.crc-acs.com.au/
CRC for Construction Innovation
http://www.construction-innovation.info/
CRC for Functional Communication Surfaces
http://www.crc-fcs.com/crcsmartprint/display.aspentityid=1576
CRC for Intelligent Manufacturing Systems and Technologies
http://www.crcimst.com.au/ (closed June 30 2006)
CRC for MicroTechnology
http://www.microtechnologycrc.com/CRC/crcmicro.nsf (closed June 30 2006)
CRC for Bioproducts
http://www.bioproducts.org.au/ (closed June 30 2006)
CRC for Polymers
http://www.crcp.com.au/
CRC for Railway Engineering and Technologies
http://www.railcrc.cqu.edu.au/crc_webpage_view.aspWPID=13
CRC for Welded Structures
http://www.crcws.com.au/ (closed June 30 2006)
CRC Wood Innovations
http://www.crcwood.unimelb.edu.au/
CRC for Advanced Automotive Technology
http://www.autocrc.com
Information and communication technology
Australasian CRC for Interaction Design
http://www.interactiondesign.com.au/
Australian Photonics CRC
http://www.photonics.com.au/ (closed June 30 2006)
Australian Telecommunications CRC
http://www.telecommunications.crc.org.au/ (closed June 30 2006)
CRC for Enterprise Distributed Systems Technology
http://www.dstc.edu.au/ (closed June 30 2006)
CRC for Integrated Engineering Asset Management
http://www.cieam.com/
CRC for Sensor Signal and Information Processing
http://www.cssip.edu.au/ (closed June 30 2006)
CRC for Smart Internet Technology
http://www.smartinternet.com.au/SITWEB/index.jsp
Appendices 163

CRC for Spatial Information
http://spatialinfocrc.org/
CRC for Technology Enabled Capital Markets (Capital Markets CRC)
http://www.cmcrc.com/
Mining and energy
CRC for Clean Power from Lignite (closed June 30 2006)
http://www.cleanpower.com.au/
CRC for Coal in Sustainable Development
http://www.ccsd.biz/
CRC for Greenhouse Gas Technologies
http://www.co2crc.com.au/
CRC for Landscape Environments and Mineral Exploration
http://crcleme.org.au/
CRC for Predictive Mineral Discovery
http://www.pmdcrc.com.au/
CRC for Sustainable Resource Processing
http://www.csrp.com.au/
CRC Mining
http://www.crcmining.com.au/
Parker CRC for Integrated Hydrometallurgy
http://www.parkercentre.crc.org.au/
Agriculture and rural based manufacturing
Australian Biosecurity CRC for Emerging Infectious Disease (ABC: EID)
http://www1.abcrc.org.au/
Australian Sheep Industry CRC
http://www.sheep.crc.org.au/
Cotton Catchment Communities CRC
http://www.cotton.pi.csiro.au/
CRC for an Internationally Competitive Pork Industry
http://www.porkcrc.com.au
CRC for Beef Genetic Technologies
http://www.beef.crc.org.au/flashver=7
CRC for Innovative Dairy Products
http://www.dairycrc.com/
CRC for Innovative Grain Food Products
http://www.grainfoodscrc.com.au/default.aspx
CRC for Sugar Industry Innovation through Biotechnology
http://www.crcsugar.com/
CRC for Sustainable Aquaculture of Finfish
http://www.aquafincrc.com.au/
164 Backing Australia’s Ability

CRC for the Australian Poultry Industries
http://www1.poultrycrc.com.au/
CRC for Tropical Plant Protection
http://www.tpp.uq.edu.au/ (closed June 30 2006)
CRC for Value Added Wheat
http://www.wheat-research.com.au/
CRC for Viticulture
http://www.crcv.com.au/
Environment
Bushfire CRC
http://www.bushfirecrc.com/
CRC for Antarctic Climate & Ecosystems
http://www.acecrc.org.au/
CRC for Australian Weed Management
http://www.weeds.crc.org.au/index_flash.html
CRC for Coastal Zone, Estuary and Waterway Management
http://www.coastal.crc.org.au/
CRC for Contamination Assessment and Remediation of the Environment
http://www.crccare.com
CRC for Greenhouse Accounting
http://www.greenhouse.crc.org.au/ (closed June 30 2006)
CRC for Irrigation Futures
http://www.irrigationfutures.org.au/
CRC for National Plant Biosecurity
http://www.crcplantbiosecurity.com.au
CRC for Plant-based Management of Dryland Salinity
http://www1.crcsalinity.com/
CRC for Forestry
http://www.forestry.crc.org.au/
CRC for Sustainable Tourism
http://www.crctourism.com.au/
Invasive Animals CRC
www.invasiveanimals.crc.org.au
CRC for the Great Barrier Reef World Heritage Area
http://www.reef.crc.org.au/ (closed June 30 2006)
CRC for Tropical Rainforest Ecology and Management
http://www.rainforest-crc.jcu.edu.au/ (closed June 30 2006)
CRC for Tropical Savannas Management
http://savanna.ntu.edu.au/
CRC for Water Quality and Treatment
http://www.waterquality.crc.org.au/
Appendices 165

Desert Knowledge CRC
http://www.desertknowledge.com.au/
Environmental Biotechnology CRC
http://www.ebcrc.com.au/
eWater CRC
http://www.ewatercrc.com.au/
Molecular Plant Breeding CRC
http://www.molecularplantbreeding.com/
Medical science and technology
CRC for Aboriginal Health
http://www.crcah.org.au/
CRC for Asthma and Airways
http://www.asthma.crc.org.au/
CRC for Chronic Inflammatory Diseases
http://www.crccid.com.au/
CRC for Cochlear Implant and Hearing Aid Innovation
http://www.bionicear.org/crc/index2.html
CRC for Diagnostics
http://diagnosticscrc.org/
CRC for Oral Health Science
http://www.dent.unimelb.edu.au/dsweb/research/crc_vcohs.html
CRC for Vaccine Technology (closed June 30 2006)
http://www.crc-vt.qimr.edu.au/
The Vision Cooperative Research Centre
http://www.visioncrc.org/
CRC for Biomedical Imaging Development
http://www.bid.com.au
166 Backing Australia’s Ability

Appendix 9: ARC-funded Centres 2006
Co-funded Centres of Excellence
Australian Centre for Plant Functional Genomics
www.acpfg.com.au
Australian Stem Cell Centre
www.stemcellcentre.edu.au
National ICT Australia
www.nicta.com.au
ARC Centres of Excellence
ARC Centre of Excellence for Advanced Silicon Photovoltaics and Photonics
www.pv.unsw.edu.au/research/advancedsilicon.asp
ARC Centre of Excellence for Autonomous Systems
www.cas.edu.au/home.html
ARC Centre of Excellence in Biotechnology and Development
www.newcastle.edu.au/centre/cbd/
ARC Centre of Excellence for Free Radical Chemistry and Biotechnology
www.freeradical.org.au
ARC Centre of Excellence for Integrative Legume Research
www.cilr.uq.edu.au/
ARC Centre of Excellence for Mathematics and Statistics of Complex Systems
www.complex.org.au/
ARC Centre of Excellence for Quantum-Atom Optics
www.acqao.org/
ARC Centre of Excellence for Quantum Computer Technology
www.qcaustralia.org/
ARC Centre of Excellence for Ultrahigh bandwidth Devices for Optical Systems
www.cudos.org.au/
ARC Centre of Excellence in Antimatter-Matter Studies
www.positron.edu.au/
ARC Centre of Excellence for Creative Industries and Innovation
www.cci.edu.au/index.php
ARC Centre of Excellence for Design in Light Metals
www.arclightmetals.org.au/
ARC Centre of Excellence for Electromaterials Science
www.electromaterials.edu.au/
ARC Centre of Excellence in Ore Deposits
http://fcms.its.utas.edu.au/scieng/codes/index.asp
ARC Centre of Excellence in Plant Energy Biology
www.plantenergy.uwa.edu.au/
ARC Centre of Excellence in Structural and Functional Microbial Genomics
www.microbialgenomics.net/
Appendices 167

ARC Centre of Excellence in Vision Science
www.vision.edu.au/
ARC Centre of Excellence for Coral Reef Studies
www.coralcoe.org.au/
ARC Centre of Excellence for Coherent X-ray Science
www.coecxs.org/
ARC Centres
ARC Centre in Bioinformatics
www.bioinformatics.org.au/
ARC Centre for Complex Dynamic Systems and Control
www.cdsc.newcastle.edu.au/index.shtml
ARC Centre for Complex Systems
www.accs.edu.au/
ARC Centre for Functional Nanomaterials
www.arccfn.org.au/
ARC Centre for Kangaroo Genomics
http://kangaroo.genomics.org.au/public/
ARC Centre for Solar Energy Systems
http://solararc.anu.edu.au/
ARC Centre for Perceptive and Intelligent Machines in Complex Environments
www.pimce.edu.au/
ARC Special Research Centres
Centre for Applied Philosophy and Public Ethics
www.cappe.edu.au/
Centre for Cognitive Science and Cognitive Neuropsychology
(Macquarie Centre for Cognitive Science)
www.maccs.mq.edu.au/
Centre for Environmental Stress and Adaptation Research
www.cesar.org.au/
Centre for Functional and Applied Genomics
www.srcgenomics.uq.edu.au/index.html
Centre for Green Chemistry
www.chem.monash.edu.au/green-chem/
Centre for Particle and Material Interfaces
(The Ian Wark Research Institute)
www.unisa.edu.au/iwri/
Centre for the Molecular Genetics of Development
www.cmgd.adelaide.edu.au/index.html
Centre for Ultra-Broadband Information Networks
www.ee.unimelb.edu.au/research/cubin/
Particulate Fluids Processing Centre
www.pfpc.unimelb.edu.au/
168 Backing Australia’s Ability

Appendix 10: Rural Research and Development Corporations
Statutory RDC’s
Cotton Research and Development Corporation
www.crdc.com.au
Fisheries Research and Development Corporation
www.frdc.com.au
Forest and Wood Products Research and Development Corporation
www.fwprdc.org.au
Grains Research and Development Corporation
www.grdc.com.au
Grape and Wine Research and Development Corporation
www.gwrdc.com.au
Land & Water Australia
www.lwa.gov.au
Rural Industries Research and Development Corporation
www.rirdc.gov.au
Sugar Research and Development Corporation
www.srdc.gov.au
Industry-owned companies
Australian Egg Corporation Limited
www.aecl.org.au
Australian Pork Limited
www.apl.au.com
Australian Wool Innovation Limited
www.wool.com.au
Dairy Australia
www.dairyaustralia.com.au
Horticulture Australia Limited
www.horticulture.com.au
Livecorp Limited
www.livecorp.com
Meat and Livestock Australia
www.mla.com.au
Appendices 169

170 Backing Australia’s Ability
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