How can the CSIRO compete with private enterprise?

businessI wrote a few days ago about how it makes no policy or philosophical sense for the Government to be forcing the CSIRO to compete with private enterprise. But the other side to that discussion is to question if it is realistic to expect them to compete effectively in the current environment.

This idea was sparked by the recent coverage of all the blue-sky research being done by Google, Facebook, and others. Private companies are taking on the mantle of massively funded and open-ended research that used to be the province of governments: like space exploration. And at the other end of the scale the truly innovative new ideas are mushrooming up from people’s garages and bedrooms, and finding viable funding, like never before. To take a government-funded research organisation and see its future in competing in these waters may well not only make no philosophical sense, it may make no sense at all.

Here’s how a recent The Economist editorial describes Facebook: “NOT since the era of imperial Rome has the “thumbs-up” sign been such a potent and public symbol of power. A mere 12 years after it was founded, Facebook is a great empire with a vast population, immense wealth, a charismatic leader, and mind-boggling reach and influence. The world’s largest social network has 1.6 billion users, a billion of whom use it every day for an average of over 20 minutes each. In the Western world, Facebook accounts for the largest share of the most popular activity (social networking) on the most widely used computing devices (smartphones); its various apps account for 30% of mobile internet use by Americans. And it is the sixth-most-valuable public company on Earth, worth some $325 billion.”

That’s the description of a country-like power without the spending and political limitation most countries have to work within. That’s an organisation that can spend billions on ideas that have no immediate returns, simply on the basis that if they can get people using them they’ll find ways to make money later. That’s an organisation that’s actively encouraging blue-sky research – and doing so in world-class facilities and decent rates of pay. It’s not an organisation that needs a lot of input from DARPA let alone CSIRO.

Then there’s the other end of the scale: The Kickstarter campaigns, the smart idea developed in the cloud, the next big thing. There are millions of smart people working for nothing on developing their idea, their innovation. There are more people doing that than ever before because there is start-up money available to make these ideas into reality and at the end of the road there is the IPO or being bought out by Google or Facebook to look forward to. Can CSIRO swim in those waters? Why would it?

Then in the middle ground there are the consultancies and businesses that already operate and shiver with distaste at the idea of the CSIRO’s Data 61 popping in and taking business from them. Data 61 is sitting in direct competition with the Deloites and KPMG and a raft of smaller smart maths and data organisations. They might win there, but at what overall cost to the economy when they do so at the expense of private enterprise in established areas?

The more you look at the idea that CSIRO should be forgoing public-good research and blue-sky research to focus on money-making ventures the less sense it seems to make. Not only is there no good policy or philosophical foundation for it, it doesn’t seem to make a lot of practical sense either. That’s not to say that the CSIRO shouldn’t make money along the way. Commercialising its discoveries is entirely legitimate: But that cannot be the starting point, that’s just a serendipitous outcome.

If the Government no longer wants to fund science research it should just say so and move on. Otherwise, it needs to fund the research that others cannot or will not do. Nothing else makes any sense.

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