Brain barrier


Ian Frazer.

Ian Frazer.

IAN Frazer knows how to prevent and treat herpes. In mice. Next year, the prize-winning immunologist behind the cervical cancer vaccine will scrutinise clinical data to determine whether his vaccine for the sexually transmitted virus, which infects one in 10 people, is safe and effective in humans. ''The vaccine is designed to prevent and treat infection,'' he says.

But even if the trial results are positive, there is no guarantee that a single person will be injected with the serum. For that to happen, Frazer and the University of Queensland spin-off company set up to develop the vaccine, Coridon, will need to persuade a pharmaceutical giant to part with $20 million to fund a phase two clinical trial.

If he pulls it off, he will be one of the few Australian scientists to successfully commercialise their discovery.

Within the walls of research institutes and universities, brilliant minds produce world-class research. But when it comes time to transform ideas beyond the laboratory bench into a commercial product or service, Australia suffers from a failure to launch.

While scientists here publish peer-reviewed research at almost double the OECD average, those same individuals file for patents - a measure of innovation success - at less than half the rate of our First World counterparts.

The problem is not new, but as mining companies empty our soils of valuable minerals, many in the research industry agree that Australia's next resource needs to be its brain power.

Former Queensland premier Peter Beattie, now the director of the Medical Research Commercialisation Fund, says that in this century of innovation, Australia risks being left behind.

''We have got to better commercialise our research,'' he says. ''That is Australia's future.''

On the 2012 Global Innovation Index (co-published by the business school INSEAD and a United Nations agency), Australia ranked 23rd overall, but came in 107th out of 141 countries in innovation efficiency (the number of inventions the country generates compared with its regulatory environment and number of skilled innovation workers), behind Georgia, Malawi and Colombia.

The reasons behind the commercial struggle are complex: for one, the research culture in Australia sees almost three-quarters of all researchers spend their careers in academia rather than industry. ''In Australia, if you do research you kind of expect to be a professor and be in a university and get tenure and grow old,'' says the head of Science and Technology Australia, Anna-Maria Arabia. ''In the US, you do research to become a business person, an entrepreneur.''

This situation is reinforced by the federal government's research funding structure, which hands over grant money to academics who publish in scholarly journals, a disincentive for those who choose to take their discoveries beyond the lab to the market.

Of the roughly $9 billion of public money that funds research each year, industry experts say less than 2 per cent is spent commercialising that.

The venture capital market in Australia is immature, but novel ways to finance technology start-ups, such as investment from superannuation funds, are yet to be explored.

And while every now and then a golden idea transforms into a life-changing device, many experts agree the research efforts of more scientists need to be focused on the technology demands of industry.

AUSTRALIA has an enviable research record: we are global leaders in the areas of pancreatic cancer, solar photovoltaics and quantum computing, to name but a few, and we rank seventh in the world for the number of scientific publications per 1000 researchers. ''That is quite an achievement,'' says former chief scientist Robin Batterham.

Such work has won the country four Nobel prizes in the past decade, helped land such huge projects as the Square Kilometre Array and profit from a series of significant discoveries, including the new Hendra vaccine for horses, released by CSIRO scientists earlier this month.

Such a formidable reputation is the reason thousands of international students arrive each year to study, says Batterham, who is now a professor of chemical engineering at Melbourne University, and president of the Australian Academy of Technological Sciences and Engineering.

Radio astronomer John O'Sullivan's work peering at millions of deep space images as he searched for exploding mini black holes in the late 1970s is one success story.

O'Sullivan developed a way to process the images more efficiently. Forty years later, more than 1 billion mobile phones, laptops and printers use the technique to connect to the internet remotely, a technology now known as WiFi. While O'Sullivan never did find any mini black holes, his experience highlights the importance of scientists being left alone to ask big questions that may not have initial applications in the real world.

''Our basic research is world class,'' says Peter Beattie,''our commercialisation is not.''

But for scientist to become a synonym for entrepreneur there needs to be an incentive. Anna-Maria Arabia says that instead of just rewarding academics who publish in high-ranking peer-review journals such as Nature and Science, the government needs to honour those who innovate or spend time gaining industry experience.

''One of the ways to bring the business culture here is having people with joint appointments, people who can be a leader in a business and also hold a position in a university,'' she says.

Arabia points to the 37 Co-operative Research Centres as an ideal marriage between research and industry.

The program, overseen by Professor Tony Peacock, places scientists in the same research facility as people with business nous to solve some of the big problems facing Australia. To date, CRCs have developed new contact lenses and hearing aids, feral animal bait and cancer drugs.

While the outputs of CRCs will have contributed $14.5 billion to the nation by 2017 - from an input of just 2 per cent of the government's total annual innovation spending - the program has become an easy target for cash-strapped departments in recent years.

Its budget has been reduced from a $200 million high in 2007 to $154 million for the next financial year.

The cut illustrates the disparity between the way the government funds basic research and projects that aim to commercialise it.

At present, scientists receive grant money to conduct research up until the point they have to prove ''it has legs and can be marketed'', says Anna-Maria Arabia. Without funding for proof-of-concept or so-called ''killer experiments'', many discoveries languish in a laboratory, maybe never to see the light of day.

One of the other problems Arabia sees is the assumption by governments and universities that investment in high-quality research will result in abundant ideas that transform into commercial successes. ''We need to engineer this a little more,'' she says. ''We need to ask industry what their problems are.''

Batterham believes the needs of industry are just as important as the light bulb moments generated by scientists. ''What industry wants gets almost no attention,'' he says.

In a report to the current chief scientist of Australia, Ian Chubb, Batterham wrote that the OECD found that demand-driven programs were more likely to get better results.

''When you get into industry you get a sense of what are the key issues, and it helps focus at the application end and contributes to greater success,'' he says.

Chubb agrees that Australia struggles to produce significant economic benefits from research, compared with some countries.

''It's a cultural issue, and I suspect that's the single hardest thing to change,'' he says. ''But we can't pretend that it will correct itself if we don't take action.''

His office will present advice to the government on how the problem can be remedied next month.

AFTER more than two decades of research, Melbourne gastroenterologist Bob Anderson developed a vaccine against a disease that affects about one in every 100 Australians: coeliac disease. With the Walter and Eliza Hall Institute, Anderson carried out the first human trials last year.

But when it came time to carry out stage two clinical trials, the institute could not raise the $20 million or so in Australia. As a result, Anderson left for Boston, where venture capitalists offered to fund the institute's spin-off company, ImmusanT.

While the institute was happy to launch the company in the larger United States market, the coeliac vaccine demonstrates the difficulty Australian start-ups face raising capital.

Australia's most recent Nobel laureate, Brian Schmidt, says: ''If I had a brilliant idea and I had to try to find money, I don't know what I'd do. It would be almost impossible.''

But many people, including Arabia, Peacock and Beattie, believe the country's superannuation funds could earn considerable money by investing in local technology companies.

''Australian super funds are the third or fourth largest block of money on earth - $1.3 trillion - so there is capital here, but it's not getting applied to good ideas,'' says Peacock.

Anna Lavelle, the head of AusBiotech, the main biotechnology body, says investment will follow tax incentives and reduced government regulations.

While the government's new research and development tax offset, introduced in July, would help businesses recoup some of the costs of innovation, she says, the regulations around the biotech industry cost time and money without increasing safety for the consumer.

''In Europe you can get through these processes in a matter of weeks,'' she said. ''In Australia, it may take you 12 to 18 months. It makes us uncompetitive, and means people like you and me miss out on new medical innovations because companies choose not to come here.''

Most people accept that not all research will result in big wins, such as the cervical cancer vaccine and WiFi.

The head of NewSouth Innovations, Kevin Cullen, says studies have shown that about 5 per cent of universities' patents generate 95 per cent of their total income.

Last year, the University of NSW set up a scheme that allows companies free access to the patents it considers will not be commercial big hits - the vast majority of those it generates.

To get the patents, companies must agree to use the patent to benefit society - through jobs, products or improved efficiencies - within three years and to acknowledge the university's contribution.

It is not just about getting maximum financial returns from intellectual property, it is also about getting the knowledge put to good use, he says.

This story Brain barrier first appeared on The Sydney Morning Herald.