Smart Culture – PhD’s in Australian Industry

The federal government has introduced a National Innovation Visa which is invitation-only and aims to give permanent residency to people who are outstanding leaders in their field and recipients of awards. The NIV is supposed to recruit people with expertise in critical technologies, health industries, renewables and low emission technologies.

However, as we develop programs like this one, we should also ask how well does Australian industry incorporate PhDs, whether foreign or domestic? And why do so many Australian PhDs head overseas to pursue careers? In other words, are we overlooking our Australian leaders and experts while importing impressive people from abroad? Should we be fixing our own grass-roots business culture rather than pushing in PhDs from the top?

National Industry PhD Program

In 2023 the current government introduced the National Industry PhD program which seeks to produce 1800 industry-focused PhDs over the next decade. There are good reasons for this program since most PhDs are not immediately usable in Australian industry; and while some industries have linkages to university research programs, most do not, meaning the value-adding of PhDs is not being realised in IP, innovation, R&D etc. So this program could be useful, and with a goal of 1800 PhDs placed in industry over 10 years, it’s ambitious. However, most leaders in industry are wary of paperwork-heavy collaboration programs and we’ll have to hope that this is not one of those. The ‘Industry Linked PhD Stream’ consists of research projects co-designed by industry and universities and includes 12-week training programs. The ‘Industry Researcher PhD Stream’ sees employees in industry undertaking PhD research while still on full salary and benefits from their employer. Even if there are eager participants for these industry-PhD streams, their structure and time-commitment probably suits large corporate and multinational employers rather than SMEs. 

The Tax System As A Lever For Innovation

There are tax breaks for R&D expenditure, but do they produce results? Do they target the real problem? The real problem is the often time-consuming and sometimes complex linkages between industry and universities, and between individual companies and PhD candidates. The National Industry PhD Program might fill some gaps, and create new innovation opportunities, by focusing on the academic end of the innovation equation. But the most important question is: are these PhDs focusing on the critical industries we need for value-adding to Australian industry and commercial enterprises in general? It’s easy to imagine an industry-PhD system leaning heavily to IT, pharmaceutical, minerals and defence – all of them dominated by large corporates – while the less-fashionable sectors of manufacturing, construction, agriculture and transport fail to attract the high-end researchers. This is worth considering given that most productivity gains in industry are evolutionary and process-driven rather than relying on new inventions. 

Building An Industrial System For PhDs 

The above point blends into this one. We can’t rely on a top-down system of picking winners from around the world. This creates roadblocks at the decision-making nexus, which will be in Canberra. In fact, the NIV already has its own speed-bumps in the form of its ‘priority’ areas of critical technologies, health industries, renewables and low emission technologies. The decision-makers will not necessarily know about all the small innovations and advancements that might take 3% or 4% off a manufacturing business’s process cost, but which are never going to gain the attention or the backing of a Canberra-based bureaucracy that funds PhDs into industry. The way around it is a system that aligns PhDs with industry by allowing significant financial advantage to the companies that support industry PhDs. We need significant tax breaks for business innovation programs and financial incentives for an employer to hire PhDs, or sponsor an employee to become a PhD candidate. I suspect that only when the incentives are fully in the hands of the business owners, will the PhD-driven innovation dividends materialise.

Supporting Innovation, Not Making It Difficult

Bolstering our PhD numbers in Australian industry will be a wasted journey unless we have a culture and financial incentive to incorporate them into business planning, particularly in SMEs where PhDs do not usually work. We already have PhDs in our university research teams, the CSIRO and the research divisions of government departments. We need a culture of innovation in Australian businesses of all sizes, that engenders a need for PhDs rather than a quota for imported PhDs, or a red-tape system of matching PhDs with businesses. To reach a business-driven PhD culture will take a systemic change and the obvious place to start is the tax system – it should start by supporting innovation, not making it too difficult.