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Networks and Collaboration4.1 Innovation Connections

4.1.1 Businesses collaborating for the purpose of innovation

The extent to which innovation-active businesses collaborate on innovation provides a measure of connectedness between different parts of the innovation system. Collaboration is any arrangement where organisations work together for mutual benefit and share some of the technical and commercial risks. It explicitly excludes fee for service and franchise arrangements. As such, collaboration involves a degree of trust and mutual interdependence. Survey evidence suggests that roughly one in five of all innovation-active businesses collaborated for the purpose of innovation in recent years. The extent of collaboration varies across industries and over time. In 2017-18 (data not shown), more than one quarter of information media and telecommunications and mining innovation-active businesses collaborated on innovation. High collaboration rates were also reported in the administrative, arts and financial industries (around one-quarter). By contrast, accommodation and food services reported the lowest share of businesses collaborating on innovation (one in ten).[96]

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4.1.2 Businesses collaborating on innovation

The majority of collaboration on innovation by Australian businesses occurs domestically - most commonly with customers or suppliers (data not shown). Importantly, around a quarter of innovation-active businesses that collaborate on innovation, collaborate with another business owned by the same company and operating in Australia. This provides a rough indication of the innovation capability embedded within businesses. However, in 2016-17 only 4.8 per cent reported collaborating on innovation with Australian universities or other higher education institution, suggesting that despite significant business capabilities, partnership arrangements requiring trust between the business enterprise sector and higher education research are relatively rare. International collaboration on innovation occurs at an even lower rate, with just 1.6 per cent of innovation-active firms collaborating with an overseas higher education institution.[97]

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4.1.3 Businesses collaborating on R&D

A modest subset of innovation-active businesses undertake research and development (R&D). Survey evidence suggests that Australian innovation-active businesses report relatively low rates of collaboration on R&D. Over the last ten years, an average of around 5 per cent of Australia’s innovation-active businesses collaborated on R&D, with little change over this period. By size, large innovation-active businesses reported the highest rates of joint R&D activity, 8.9 per cent in 2017-18. This compares to only 6.4 per cent of innovation-active medium sized businesses and 3.5 per cent of innovation-active small businesses collaborating on R&D in the same period. By industry, the Mining industry and Professional, scientific and technical services reported the highest share of innovation-active businesses with joint R&D activities.[98]

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4.1.4 Businesses collaborating with publicly funded research organisations

Collaboration encourages the development of novel inventions, as collaborators build on other’s knowledge and experience. Patent data on collaboration between businesses and publicly funded research organisations (PFROs) suggests limited interaction between the two sectors in Australia. Among all patent families that include an Australian applicant, only 1.6 per cent involved collaboration in 2017. That said, collaboration varies substantially across technical fields and years; and it is also not present in all fields. In 2017, the technical fields with the largest share of patents involving business and PFRO collaboration were in Biotechnology (8.7 per cent), Analysis of biological materials (7.4 per cent) and Pharmaceuticals (6.5 per cent).[99] A recent report by IP Australia found that collaborative grants have a higher impact on boosting all types of patent applications than non-collaborative ones. Further, a greater impact is seen for Patent Cooperation Treaty (PCT) applications, where PCT applications are submitted to obtain patent protection within multiple countries.[100]

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4.1.5 Active licences, options and assignments (LOAs) yielding income for research organisations

Many Australian universities, medical research institutes and public research organisations license intellectual property (IP) to third parties, including businesses. Active LOAs that yield income are a subset of all active LOAs. They reflect high value IP in the research sector, as well as knowledge transfer between sectors. Data from the National Survey of Research Commercialisation (NSRC) provides a time series of the number of active LOAs yielding income in the research sector from 2006 to 2016. A peak in the number of active LOAs occurred in 2013 with 950 agreements reported, and an increase of 12.8 per cent can be seen between 2006 and 2016 with 719 and 811 LOAs reported, respectively.[101]

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4.1.6 Income from active licences, options and assignments (LOAs) obtained by research organisations

Many Australian universities, medical research institutes and public research organisations license intellectual property (IP) to third parties including businesses. Active LOA deals that yield income provide an indication of IP with high commercial value as well as knowledge transfer between sectors. Survey data shows that total income in the research sector from licensing between 2006 and 2016 was over $2 billion. Over the decade, LOA income varied with spikes seen in 2009 and 2012 which corresponds to large increases in data provided by Commonwealth Scientific and Industrial Research Organisation (CSIRO). This also points to a broader trend — LOA income data often varies from the number of active LOAs executed due to considerable variation at the institutional level in the value of licensing deals.[102]

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4.1.7 Consultancies, contracts and research collaborations with research organisations

A selection of Australian universities, medical research institutes and public research agencies are surveyed each year on their industry engagement via research-based consultancies, fee-for-service contracts and formal research collaborations. These activities provide an indication of how active the research sector is with respect to knowledge transfer to industry. Data shows that the number of consultancies, contracts and research collaborations undertaken from 2006 to 2016 fluctuated with an overall increase over the period. The largest number of consultancies, contracts and collaborations occurred in the most recent years with 18,076 and 18,279 activities reported in 2015 and 2016, respectively.[103]

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4.1.8 Total gross value of consultancies, contracts and research collaborations with research organisations

A selection of Australian universities, medical research institutes and public research agencies are surveyed each year on industry engagement via research-based consultancies, fee-for-service contracts and formal research collaborations. Data shows that over 2006-2016, the total value of consultancy, contract and collaboration activity in the research sector was $16.1 billion. Compared to income derived from intellectual property (IP) licensing, $2 billion over the same period, this form of knowledge transfer is of significantly greater value. It may suggest consultancies, contracts and collaboration are increasingly the preferred avenue of knowledge transfer to industry over more traditional channels such as IP licensing.[104]

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