Australia has evolved an entrenched structure, systems and practices that confines industry and research to largely separate camps with very limited interaction. This separation is sustained by largely negative reinforcements in each camp.

However there are many exceptions – major companies that invest seriously in innovation and research, SMEs that:

– Companies see universities and research organisations as unworldly, out of touch with business reality, unwilling to understand commercial pressures, too slow and complicated in executing commercial contracts, and expecting too great a return from their specialist knowledge.

– Researchers see companies as excessively focussed on the short-term, unwilling to shift their focus from current problems to future opportunities, limited in their understanding of technical language and difficult to negotiate with for a fair price.

However there are many exceptions – major companies that invest seriously in innovation and research, SMEs that are driven by exploiting technology-based opportunities, newer industry sectors that rely on close interaction with research (eg biomedical engineering), and researchers who are closely connected with companies. The challenge is to transform the exceptions to the norm.

Key actions identified include:

– Stronger recognition of and support for the crucial role that science and technology play in a modern diversified economy.

-Ensure that the Industry Growth Centre program identifies greater industry-research collaboration as a key objective.

-Incentives for companies to collaborate with researchers, whether through adjustments to the R&D tax incentive or direct support measures that operate successfully in many countries.

-Moderation of the perverse effects of the ERA in devaluing industry engagement through the adoption of complementary metrics such as the REA proposed by ATSE.

-Enabling the CRCs playing a stronger outreach role to industry, particularly SMES.