Tell him he’s dreamin’

Tony Peacock, CEO, CRC Association says don’t get locked into guaranteed returns for any CRC participant
It’s crunch time for Cooperative Research Centre bidders in the 19th selection round, with a mere fortnight until submission. Participants in proposed centres will go down to the wire in developing their proposals and negotiating their role in a future CRC. The Commonwealth Government could invest around $150 million in the successful CRCs and those dollars will represent about one-quarter of the total investment by all the participants, so it’s serious stuff.
Like all investments, there is risk involved. Naturally, individual participants will seek to minimise their own risk of participation in the CRC, but it is important not to get locked into agreements that put the future of the whole CRC at risk. It’s my strong view that if a potential participant in a CRC insists on a guaranteed return on their investment, bidders should respectfully decline and not include that participant in the final bid.
If I rang superannuation providers and insisted that they provide me with a 20% return on my funds every year, they’d decline my investment, no matter how much they’d like to take my money. If I rang and insisted on a 500% return every year, they’d laugh. It should be the same for CRCs.
No bidder should ever agree to a guaranteed return to any of the participants in a CRC. If a university offers to put cash into a CRC only on the basis that they get some multiples of that cash back from the CRC, that’s not collaboration. It’s money laundering. If a research organisation is not willing to participate on the basis that they’ll be asked to supply research because they are the best to do so, then they shouldn’t get on board in the first place. When I hear an organisation has asked for a guaranteed cash return, I wonder what they think the Board and CEO of the CRC are there for? They are asking the Board to oversee an algorithm, not a strategy. All participants in a CRC can withdraw if they feel they are not getting a good enough return on their investment – for a research organisation that return includes research engagement and impact. It is understandable that they are conservative about cash investments but tying the hand of a future CRC with a requirement to return the cash plus a multiplier of it could set the CRC up for failure. What happens when the need of the CRC is to spend its cash securing IP or rolling out a major demonstration?
Bidders get antsy close to submission time. They want to maximise the cash they present to the CRC Advisory Committee and that is a really important factor in getting a CRC. But if a portion of that cash is automatically drawing away Commonwealth funds, the bid is a much weaker proposal in my view. Bidders should resist offers of participation that come with strings and, like my superannuation fund and Darryl Corrigan, tell him he’s dreamin’.