The Superannuation industry in Australia is huge. The $1.3 trillion is one of the largest pools of funds in the world. Moreover, this big block of money has only been around for about 20 years; it’s quite young. It’s going to grow. Soon the superannuation industry will be bigger than the banking industry in Australia. Superannuation Minister Bill Shorten told “Science Meets Superannuation” in Melbourne earlier this week that the whole Global Financial Crisis would have played out differently if President Reagan had followed Prime Minister Hawke’s lead in the 1980s and stuck 3% of US wages into superannuation.
Australian science is not not funded nearly so well, although we’ve been steadily climbing the OECD charts and putting a higher percentage of GDP into R&D. But we all know the stories of good Aussie ideas that don’t get a fair go from investors and end up dwindling on the vine or going overseas.
Reality check #1 – superannuation funds have to be conservative, do due diligence and keep their fees down. Very few science opportunities in Australia can pass all three tests, even if the super fund has the ability to look at them.
Reality check #2 – science in Australia is (very often) not sufficiently investor-ready. The superannuation industry would invest through venture capital funds, but these funds don’t receive enough compelling business proposals from the science sector.
There are a lot of complicating issues like tax, fees, horizons, lack of choice or too much choice that forces short-term-ism; skills on both sides; red tape and much more. But in his opening address to Science and Technology Australia’s “Science Meets Superannuation” meeting in Melbourne, 2011 Nobel Prize winner Brian Schmidt pointed to the different cultures of the two sectors as perhaps the biggest barrier. This is undoubtably true – we simply speak different languages.
Professor Schmidt proposed that we probably write off his generation and above in the science sector to concentrate on younger scientists. Provide more education and incentive for them to learn more about the finance sector. This is an interesting perspective from someone with a career in the most basic of basic sciences. Schmidt even went further, saying Australia should change our University incentives to re-weight the balance between journal publication and industry engagement.
This is extremely encouraging stuff from a scientist whose views will be listened to by both government and industry. And there were other very encouraging signs at the Science Meets Super meeting. Innovation Minister Chris Evans was asked by an academic how we could attract more small and medium businesses to seek knowledge from Universities. How do we get them to knock on the door? Evans didn’t hesitate: “you could open the door”. Maybe a tad blunt; but it got right to the nub – we need to learn to work with industry, not just expect them to seek us out.
It’s not a new problem, of course. Cooperative Research Centres were set up to address the issue and anyone involved in CRCs knows that culture is a massive force in getting anything done. CSIRO’s Flagships are the same, as well as many other programs. Edison’s “99% perspiration” is just as true 110 years after he first used the term.
But there are some good encouraging signs. The Superannuation industry turned up in big numbers in Melbourne and were engaged and interested. Obviously if there are dollars to be made from science, they want to participate. Two Cabinet Ministers attended and committed to looking for better ways of doing things. In an earlier post here, I’ve written about the “Balanced Scientist” program initiated by the Invasive Animals CRC, which included commercial and financial education for early career researchers. Many other CRCs and research organisation have implemented similiar programs. Attending NICTA’s recent Techfest, I and others were very impressed with the ability of the postgrads, postdocs and research fellows to engage us in discussion about the commercial possibilities for their inventions – whover is helping with their training in this area deserves a medal. We aren’t starting from scratch.
Science Meets Superannuation was a really terrific initiative by Science and Technology Australia. It adds to many things that groups like the Australian Institute of Commercialisation have banged on about for years. Perhaps because S&T Australia represents the bulk of scientists in the country, this initiative will act as a catalyst to really move things forward.