This document proposes a new business model for the Commonwealth Scientific and Industrial Research Organisation (CSIRO) in Australia. It suggests splitting CSIRO into two groups - one for basic research on issues of national importance, and one for applied research and seeking large contracts with Australian and international companies. This would allow CSIRO to continue high-level research while improving economic returns. The proposal also calls for parallel reforms and programs to business skills, international trade, agriculture, and links with other applied research groups.

1. Copyright John Hine and Associates Pty Ltd 2014, www.developqld.net.au. Page 1
JOHN HINE AND ASSOCIATES PTY LTD
www.developqld.net.au
AN OUTLINE PROPOSAL FOR A NEW BUSINESS MODEL FOR CSIRO
15 December 2014
Origin of the Proposal
This proposal was developed following proposals by the Abbott Government to make further cuts to the
CSIRO budget and a general promise by Opposition Leader Bill Shorten to reverse these cuts.
While the quality of the CSIRO research is held in high regard, it is suggested that Australia does not reap
commensurate economic benefit from this research. New directions are thus needed.
A new business model, with a mix of basic and contract applied R&D, is proposed so as not to lose the skills in
the organisation and gain required economic benefit. The material below is intended to stimulate discussion.
Background Issues
Australia needs whole new export industries to fill the gap now that the mining and resource industries are
returning to more their historical level in the economy.
A range of work, by the OECD, the Business Council of Australia and Professor Jonathon West of the University
of Tasmania, has shown that most innovation in business arises from the identification of a market gap not by
commercialising scientific research.
Several examples of Qld businesses that have gone international show that the business model is the key, not
research commercialisation:
 AustralianLaboratoryServices,whichdoeslaboratorytestingforthe food,environmentandminingindustries,
and has some 350 facilitiesinternationallywith13000 staff. Clearly, theyuse international standardtesting
systemsbutthe companyis notresearchbased.
 The Retail FoodGroup ownsa range of take-awayfoodchains,includingGloriaJeans,whichhassome 500
coffee shopsin39 marketsoverseasaswell as400 inAustralia.
 JK International isaBrisbane basedcommoditiestraderwith eightassociatedofficesworldwideanda global
networkof agentsandsuppliers intrading&exporting,shipping,manufacturingandimporting&distribution.
Theyspecialise inlegumesandpulsesanddeal in wheat,sugarandbarley.
 The Australianownedelementof Domino'sPizzaholdsthe exclusive masterfranchise rightsforthe Domino's
brand andnetworkinAustralia, NewZealand,France, Belgium,the Netherlands,the Principalityof Monacoand
Japan. Domino’sPizzaIncisa US company. The keyisthat the Australianarmisa businessdrivencompany.
Certainly,itmusthave excellentmanagementsystemsplusgoodITandfoodsafetysystemsbutitis a business
drivencompany,nota researchdrivencompany.
Tel: 07 3264 4568
Mob: 0432 027 744
Email: john@developqld.net.au
ABN: 67 157 769 901
74 Ballinger Crescent
Albany Creek Qld 4035

2. Copyright John Hine and Associates Pty Ltd 2014, www.developqld.net.au. Page 2
CSIRO was set up as the applied technology resource for Australian business some 80 years ago to fill a gap in
the economy. This gap is now mainly filled by the private sector.
CSIRO is a world class research group and has an excellent brand. The group has high level research skills,
which should not be lost, but Australia does not have the companies to commercialise high level research.
A new business model is thus required, that gives greater economic return.
Proposal
It is proposed that CSIRO be split into two broad but linked groups, with staff moving between the groups as
projects require. These groups would address;
 Basic researchinareasof national importance egthe climate change, GreatBarrierReef,MurrayDarling,Great
ArtesianBasin,natural resource management,geology.
 An appliedR&Dgroup,seekinglarge contractswiththe largerAustraliancompaniesandinternational
companies.
Parallel Proposals
The proposals for CSIRO would need to be developed in parallel with plans for CRCs, Australian Research
Council funding and other Australian Government funding for scientific research. The Innovation Partnerships
announced by then Minister Kim Carr in mid-2013 should proceed, and link with CSIRO, CRCs etc.
A generous R&D Tax Incentive should be available to encourage companies operating in Australia to
commission larger applied research projects with CSIRO.
Programs to assist SMEs such as the Entrepreneurship Infrastructure program should assist smaller companies
access technology they require from a diverse range of public and private sources, not just the public sector.
A major program led by Austrade and State export agencies to export value added services, including R&D.
Sister Cities established would be one way place to start to build required overseas relationships.
A major national program to improve business skills should be progressively implemented, including high
schools and extending to business at all levels. Qualifications should cover a broad range and not be too
constrained by current Certificates, MBAs etc. A diversity of delivery mechanisms would be needed.
A program to improve business literacy should be implemented across CSIRO to assist the scientists better
understand business needs.
Wide ranging agricultural reform, to include;
 Encouragementof cooperativesandotherwaysof bringingfarmbusinessestogether,vianational legislation.
 A majorprogram to improve businessskillsinfarmers
 Halving(the precise figuretobe finalised) R&Dleviesanduse these fundsforlongterm industrywideR&D.
 AllowfarmbusinessesaccesstoR&D tax incentivestosothatfarm businessescando proprietaryresearch.
 Fosterthe establishmentof incorporated,locallybased,farmerownedappliedR&Dand extensioncompaniesto
do appliedagriculturalresearchneededforindividual localities.
CSIRO should link with other applied R&D groups, such as the Fraunhofer Institute in Germany and the
Battelle Memorial Institute in the USA, if not done so already.

3. Copyright John Hine and Associates Pty Ltd 2014, www.developqld.net.au. Page 3
References:
OECD Innovation Strategy: http://www.oecd.org/site/innovationstrategy/.
Business Council of Australia Innovation Report: http://www.bca.com.au/publications/building-australias-
innovation-system.
Professor West’s paper on innovation: http://www.alliance21.org.au/about/people/jonathan-west.
Australian Laboratory Services: http://www.alsglobal.com/.
Retail Food Group: https://www.rfg.com.au/.
JK International: http://www.jki.com.au/1024-768/Aboutus.html.
Domino’s Pizza: http://en.wikipedia.org/wiki/Domino's_Pizza_Enterprises.
Fraunhofer Institute: http://www.fraunhofer.de/en.html.
Battelle Memorial Institute: http://www.battelle.org/.