Capability Building and Risk Management: Lessons from Radiata
Matthews, Mark, Innovation : Management, Policy & Practice
This paper considers the role played by CSIRO in the story of the well-known spinoff firm, Radiata. The paper tells a fairly technical story in order to communicate an important message to policy-makers. This message is that long-term capability-building involving close links between blue-sky research and engineering design skills can be extremely valuable. The paper explains how strategic decisions about post-graduate research training and research investments made by radio-astronomers in CSIRO in the 1960s helped to generate some major commercial outcomes some thirty-years later - notably the formation and sale of the company Radiata Inc. to Cisco Systems Inc. for a substantial amount of money.
The story told here covers technical issues because these are critical to understanding what capability building means in practice - beneath the rhetoric that can characterise policy debates over research commercialisation. The paper draws heavily upon a more detailed paper prepared for the Australian Government Department of Education, Science and Training (Matthews and Frater 2003). The names of individuals are intentionally omitted because specific recollections differ between members of the 'community of practice' involved and it may be unfair to name particular individuals in the context of this group-based activity that extended beyond CSIRO per se. The fact that patent infringement litigation is currently taking place reinforces the need for anonymity.
The lesson for policy-making in general, and for CSIRO's future mission in particular, is twofold; first, that this type of long-term capability building generates important option-values as a by-product of blue-sky research and, second, that these options can only be exploited if the necessary engineering and investment risk management skills linked to international networks of 'communities of practice' are also available. The inter-dependence between option values and commercial acumen complicates policy-making designed to encourage 'research commercialisation'. Whilst it is necessary to protect the intellectual property (IP) that arises from publicly-funded research, not least because businesses may appropriate and suppress potentially useful technologies if they threaten the value of corporate balance sheets, there is a significant difference between formal IP protection and extracting significant value from this IP. Consequently, policy-making would benefit from a more nuanced and less prescriptive association between formal IP protection and extracting value from IP.
INNOVATION CAPABILITIES AND COLLABORATION BETWEEN RADIOASTRONOMERS AND ELECTRONIC ENGINEERS
Pushing the scientific research frontier in radioastronomy involves advancing the technological frontier in radio signal capture and in signal processing. This means stretching the range of frequencies over which signals can be captured and developing methods for distinguishing between signals and background noise. The application of these methods outside radio-astronomy encompasses industrial applications, satellite-based communications, mobile phones and short-distance applications such as wireless Local Area Networks (LANs). These applications require further advances in antenna technology, microchip technology, mathematical applications and other areas.
The close coupling of the technologies used to improve radio-telescope instrumentation capabilities and commercial/defence applications has long been recognised by the radio-astronomy community in Australia and goes beyond simply being receptive to the notion that commercial spin-offs may occur from this R&D work. It extends to a more strategic recognition of the value of building close linkages between the companies that are able to develop and provide critical instrumentation technologies and the R&D, and research training, carried out in order to support radio-astronomy. This results in a system of academic-industry linkages that, from the 1960s, has been far more symbiotic than the simplistic 'linear model' of how basic research translates into industrial applications. …