Data61’s partnership model: riding a wave of R&D disruption

By Victoria Draudins

Monday September 4, 2017

The worldwide research and development market is entering a new cycle of disruption, Data61 CEO Adrian Turner believes, and he says the unique entity is demonstrating a partnership model that will help Australia capitalise on it.

Institutions will move away from standalone R&D teams working on problems in isolation. As has occurred in other functions, the R&D space will instead move to a ‘challenger’ culture, where universities, government and the private sector will come together and organise teams with a variety of skills to fit around challenges.

This should prove useful food for thought for a federal government desperately focused on stimulating the economy through ‘jobs and growth’. While the slogan itself may have waned on the political tide, the sentiment still very much remains. In attempting to jump-start innovation, government is experimenting with a number of measures in the R&D space, including the more straightforward transactional forms of providing grants and tax incentives.

More recently, incarnations can be seen in the plethora of innovation labs that have been launched over the last year, as well as crowdfunding and fintech-targeted regulatory sandboxes.

“We need a growth mindset in order to achieve more in partnership than we can alone.”

Less often talked about is when government puts its own skin in the game by taking ownership stakes in inventions. This can be extremely lucrative, as demonstrated by the CSIRO’s successful WiFi patenting, which has generated hundreds of millions of dollars for Australia, helping the organisation to establish the $200 million CSIRO Innovation Fund. At the same time, government agencies and quasi-government agencies like Australia Post are actively looking at partnering with and take equity stakes in start-ups.

But Data61’s collaborative partnership models, which aim to get industry, universities and government working together to develop and share intellectual property, rather than competing for ideas and talent, may prove to be the most successful approach.

This can be seen in the DNA of Data61 itself, which, under Turner’s leadership, is positioning itself as key architect in building this new ecosystem.

A lot can happen in a year

Data61 has accomplished a lot in a short and turbulent period since it was established midway through last year. Formerly known as NICTA, the organisation survived near de-funding and retrenchments as it was folded into the CSIRO. One year on, it recently celebrated its first birthday with the float of its spin-out company Audinate, which was valued at $72.6 million on its first day of trading.

The 1000+ employee organisation has emerged with a clear and ambitious mission. As Turner puts it, “We have aspirations of being a digital innovation catalyst for the country.” He goes on to explain that as part of achieving this, “Data61 exists to seed and scale new industries.”

In particular, Data61 is focused on growing industries where Australia has a competitive advantage, and it turns out there are quite a few of them, from cybersecurity to food provenance (helping exporters prevent their products being swapped with counterfeit versions overseas). These aren’t only commercially-focused fields. As part of environmental risk management, Australian scientists are helping monitor wildlife and biodiversity in the Amazon using wireless sensors.

Data61 is also working with other government agencies releasing datasets, to ensure privacy standards and regulatory rules aren’t violated. Leveraging developments in machine learning and other techniques, data is being used in new, increasingly complex ways – to evaluate policies, make programs more efficient and seed innovation and industries. For example, leveraging 10 years of research, Data61’s reg-tech team has built an early-stage prototype platform making legislation and regulations available in a digital, machine readable format, with the goal of automating compliance.

The scaling element is quite important in Data61’s work. In this role, it aims to support Australia’s small and mid-sized companies, which employ the majority of Australians. As Turner points out, while 97% of registered businesses are made up of 20 people or less, 70% of the market is captured by a few big players. Economic structures clearly favour the first to scale in a data-driven Australia.

Data61 can help smaller businesses by acting as a conduit to help them connect and work with larger companies, access data science and related intellectual property to help them grow, or make introductions and open the door to institutional funding.

An innovation network architect

Central to Data61’s strategy lies in building an innovation network with government, universities and the private sector, both here and abroad. From when Turner first stepped into the role, its university partnerships have grown from 23 to 27, with more joining by the end of the year.

Data61 also has a hand in bringing sought-after talent back to Australian shores. For example, world-leading researcher and former VP at Intel, Genevieve Bell, left the chipmaker earlier this year for a professorship funded by Data61 and the ANU. Letting someone have “one foot in university and another in Data61” is a good way to attract talent, says Turner, who outlines some of the benefits of working with Data61: the promise of access to large-scale datasets, and the freedom to work on difficult problems at the cutting edge of data science with a talented network of individuals.

Indeed, it appears Data61’s combined skills in developing valuable IP and acting as an ecosystem architect are fairly unique in governments around the world. For example, DARPA in the US says it “works within an innovation ecosystem” using program managers to develop high-risk emerging technologies for the military in limited timeframes. However, unlike Data61, they don’t contribute their own internal IP function.

Developing multiple engagement models

Data61 uses a variety of engagement models. These utilise Data61’s two core competencies – developing IP itself and creating and orchestrating an R&D ecosystem – in various degrees, on a scale depending on how advanced an idea is.

In the earlier stages, ON Prime and ON Accelerator provide methodologies to help teams examine how early stage ideas may fit within markets and be developed for the real world.

Adrian Turner. Images: CSIRO

More advanced ideas, which have graduated into valuable IP, may progress through four other types of models. Data61 may work with the researchers and engineers responsible for developing new technologies to help them licence IP to commercial partners. They can play a variety of roles to help their spin-out companies such as Audinate, like sitting on boards or contributing to business strategies. Data61 can also form collaborative ventures to co-develop ideas with partners bringing market expertise, domain expertise, scale or budget to the table. Lastly, they can also be approached by businesses to create entirely new entities.

Flexible structures required to suit the environment

While scientific breakthroughs can take years, Turner is quick to point out that in the world of data, they can happen more quickly. He predicts that over the next 15 years, machine learning, material science and bioscience disciplines will converge to become more data-centric. As this happens the economic structures in these areas will start to resemble a Facebook or an Apple-like model.

Operating in this environment therefore requires speed and flexibility. Data61 secured agreement from the CSIRO board to structure key business units differently from the wider CSIRO so it can adapt to market shifts and move with speed to commercialise and partner with others.

Traditionally, CSIRO research teams are responsible for designing, delivering and securing funding for work programs. At Data61 a product management function sits between research and commercialisation units. This allows scarce talent to specialise on doing what they do best; research, development and maximising program delivery.

Collaboration – not competition and silos – key to Australia’s future

Ultimately Turner predicts that the future will be defined not only by where the boundaries between new technologies and people start and stop, but also how people interact with them. This depends to an extent on how the role of government changes – how accessible it makes its datasets and how it ends up partnering with wider industry.

While Turner was aware there were cultural challenges coming in to the job, he says he did not initially realise how big a cultural shift is needed in Australian R&D.

“We have the core elements – world-class people and an ability to get funding – but we hold our ideas close,” he says, adding that he sees a need to move away from “university against university or state against state”.

“We need a growth mindset in order to achieve more in partnership than we can alone,” Turner notes, reflecting on Data61’s first year in operation.

“I think we’re building something very special, and if we get this right for the country, we have the ability to create a new model to disrupt the $1.3 trillion R&D space along the way.”

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