The importance of space science
6.1
Most developments and innovation in the space sector can be attributed to discoveries grounded in scientific research. Basic space science research is necessary for the development, long-term success, and competitiveness of the Australian space industry.
6.2
The Committee heard that Australian space science needs to be ‘reprioritised and funded’. Stakeholders argued that if support for space science research is inadequate, goals for the Australian space industry will not be realised.
6.3
Furthermore, framing Australia’s space investment priorities around jobs and growth overlooks the opportunities generated by investments in science which includes social and economic benefits. For example, several studies have shown that funding science (especially space science missions) generates a five to 10 times return on investment.
Coordinating Australian space science
6.4
Multiple organisations have varying roles in space science, including universities, the ASA, Geoscience Australia, the National Committee for Space Science, Defence Science and Technology (DST), and the CSIRO. There are also several national and state and territory programs involved in space science technology development.
6.5
For all of these programs, investments in space science are independently determined, although the Space Industry Leaders Forum provides the opportunity for a small amount of funding coordination.
6.6
To help organisations better prioritise and coordinate space science research funding, SmartSat CRC recommended the development of ‘Government endorsed national space research and innovation priorities aimed at driving societal, economic, environmental and national security outcomes for Australia’. These national priorities should cover various space sector stakeholders and program delivery agencies to help inform their decision making.
6.7
Other stakeholders also called for space science to be nationally coordinated, noting the absence of such in the ASA’s strategy. The Australian Academy of Science (the Academy) stated that:
The single most significant support that the Australian Government could provide the Australian space sector is to provide national co-ordination in space science. There is no body with a mandated role of co-ordinating Australia’s space science investments or actively supports the development of space science…
Despite the Australian Space Agency’s establishment, this is a critical gap that needs to be filled. The Agency’s charter does not explicitly mention science. Nor is science mentioned in the Civil Space Strategy, although it underpins key objectives and challenges.
6.8
The CSIRO noted that the ASA ‘does not currently have a science-specific program, although it has funded some science activities that are driven by industry growth’. Stakeholders suggested the ASA take on the role of coordinating civil space science. For example, to support international collaboration and industry growth, the Western Australian Government suggested that the ASA:
appoint a science officer
formalise partnerships with the CSIRO who have a long history in space research
modify their funding criteria to include science
recognise that science is a key enabler in the space economy, generating growth rather than limiting it.
6.9
Earthspace suggested that the Australian Government challenge the SmartSat CRC with nationally beneficial priorities and ‘encourage it to engage research Australia wide in all states and territories’.
6.10
SmartSat CRC advocated for a ‘sustained effort on investment with R&D’. Dr Peter Woodgate, Chair of Board of SmarSat CRC told the Committee that its organisation has ‘identified 27 key capabilities that will underpin a long-term national plan’ and would like the capabilities incorporated into an overarching national plan – a ‘national space mission of missions’.
Universities
6.11
The importance of universities was repeatedly mentioned in evidence received by the Committee, with Australia Space Futures stating that the university sector is fundamental to driving growth in the Australian space sector. In its submission, the Queensland University of Technology (QUT) stated:
The higher education and research sector makes a vital contribution to Australia’s national interest, fostering international collaborations and furthering the success of the Australian space industry.
6.12
QUT submitted that there is a gap in Australia’s space industry. This is because most Australian space firms are SMEs and start-ups which lack sufficient resources and experience to establish effective research programs and achieve adequate commercialisation outcomes. This gap could be filled by Australia’s universities given their extensive international partnerships, specialised commercialisation offices and large space R&D programs.
6.13
Many universities highlighted their national and international partnerships within the global space industry and an impressive range of collaborations, programs and initiatives across government and commercial sectors.
Box 6.1
The SHINE Program, now expanded into the Swinburne Youth Space Innovation Challenge, provides students with the opportunity to design and create experiments that are sent to the International Space Station. The Program was initially undertaken in partnership with Haileybury College, but now has expanded to six schools across Australia and is supported by SmartSat CRC. The Australian Space Agency is also actively involved in the Program.
Involving final year students, Master’s students, PhD students and professors, the Program has successfully seen a fifty-fifty split from the secondary school, in terms of male to female involvement. Secondary school students participating in the Program are able to grow as STEM professionals, while university students have the opportunity to develop important leadership and mentoring skills.
6.14
Despite being capable of developing commercial space services and products, several challenges facing universities were highlighted by stakeholders. For example, QUT stated that the Australian space industry is ‘defined narrowly in a manner that privileges private investment, marginalises universities and places a hard cap on the fledgling sector’s ability to grow’.
6.15
Australia Space Futures, a consortium of Australian universities, identified some barriers to maximising the university sector’s impact on space industry growth – including:
ineffective translation of university research minimises the impact of economic growth.
external stakeholders such as industry, often find it difficult to navigate the university sector.
the Australian space industry is wide but thin and not in a position to fund research at scale. The sector therefore requires research funding from Government.
space research is not concentrated in one area, and sits across many disciplines such as STEM, health, business, humanities, social sciences and the arts.
while the sector has proven ability to manage long-term, major infrastructure for cutting edge research, without industry consultation at the beginning, it risks failure to reach its true potential.
the competitive nature of student fees has damaged the powerful possibility of university collaboration to offer joint courses and initiatives to utilise each university’s unique area of expertise.
6.16
Australia Space Futures argued that the best way to drive space R&D is by creating specific space capability networks large enough to exert a commercial impact, after which other complimentary capabilities could be gradually developed.
Industry and commercialisation
6.17
Commercialisation is the process that monetises R&D and grows the space industry. The value of commercialising space research is amplified when it can also be applied to other sectors. Barriers to commercialising space R&D therefore not only hinders space sector growth, but growth of other areas.
6.18
EOS submitted that a ‘sustained investment of resources and expertise’ and a ‘keen understanding of commercialisation’ will be needed for Australian industry to be globally competitive. It stated:
Developing a viable, sustainable and internationally competitive sovereign space industry will require an intense focus on both research and development (R&D) and the commercialisation of research outcomes. This will require a close, collaborative relationship between government and industry, where the goal of the R&D process is well-understood and the commitment from both sides is consistent. If this can be achieved, the intellectual property (IP) generation, export opportunities and economic outcomes already being realised by Australian companies can be expanded significantly.
6.19
SmartSat CRC expressed similar sentiments to the Committee:
…the extensive R&D streams that are coming out of the SmartSat research activities need to translate across to Australian companies. This will build our national capability. They're focused on solving national challenges and we need to seize the opportunity to build an internationally competitive industry. This means space is seen as a critical component of the national fabric of science and industry. An innovative nation sells to the world and that's particularly so in space.
6.20
Converting R&D into commercially viable products is one of the challenges in innovation policy. This holds true in Australia. While Australia has a strong history in space R&D and a significant research base, it struggles to commercialise its R&D. Dr Jason Held, Chief Executive Officer, Saber Astronautics told the Committee:
A lot of the funding mechanisms … focus very much on research. ARC linkages and CRCs are good programs that are very much focussed on research, and we, as a nation, need to leverage that research better. We're top 10 in the world for science output, but we're dead last for commercialisation…
6.21
Deloitte made the same point and stated that the space industry will need government support ‘to get the ball rolling’:
Australia in particular is renowned for struggling to convert ideas into opportunities. This is often due to a variety of factors that differ radically from industry to industry.
…Australian policy makers need [to] learn the lessons from other sectors and innovation ecosystems, while also tailoring policies (such as grant funding) to ensure alignment with sector growth over the long-term.
Funding challenges
6.22
In Australia, the space sector is ‘a relatively new (commercial) industry’, providing an opportunity to establish good funding program practices. Deloitte submitted that the objectives of funding programs (such as increasing revenue, supporting researchers, creating jobs, increasing patents and increasing private investment) should be clearly defined as different objectives require different funding structures. For example:
… grants requiring matched funding support growth in incumbents; small grants support new entrants seeking seed capital; manufacturing-focused grants support launch activities while less specific grants can be used by earth observation value added resellers.
6.23
Deloitte recommended that the experience and knowledge gained from funding the wider innovation sector should be leveraged when developing funding for the space sector.
6.24
The SASIC argued that R&D should not be ‘diluted’ across a broad base but instead ‘targeted and niche to lead to industry developments at scale’. Currently, the ASA has a wide range of investments and grants allocated across Australia based on its articulated priorities for research. R&D, however, should instead be focussed at a scale that maximises research excellence and impact, delivers high quality outcomes, optimises the potential of limited resources and sustains growth.
6.25
Gilmour Space Technologies expressed a similar view, stating that concentrating space grant funds by distributing them between fewer companies would better enable Australia’s space capabilities to increase, rather than dividing them between a large number of research entities.
6.26
Given the limited space development funding available in Australia, Gilmour Space Technologies also argued that a) Australian private-sector companies (with Australian headquarters) developing sovereign capability should be prioritised for funding and b) Government contracts and grants should ‘include funding for capital equipment and headcount, which can be tied to milestones for accountability’.
6.27
Dr Mark Hodge, Chief Executive Officer, DMTC, also told the Committee that research and investment needs to be targeted:
I think we have to be really strategic about how we establish our investment priorities and send a really clear signal to the research sector and the industrial sector that this is where the purchasing power of government procurement is likely to go. This is not about research for its own sake.
… I think the main thing is to not invest small amounts of money everywhere and let a thousand flowers bloom. It's about targeting, with that investment, and trying to understand, what capabilities are necessary for the national good and being clear eyed about where the credible pathways for developing that capability can come from.
6.28
The Academy called for ‘commitment and investment in a national capability for space science, which would enable the development of a sustainable and focused research and development program and support the space industry’s development’. This includes support for a research translation fund that mirrors the Medical Research Future Fund.
6.29
QUT suggested a government fund similar to the Biomedical Translation Fund, properly linked to university commercialisation offices and focused on providing significant early-stage funding for space companies’ to aid space development and commercialisation.
6.30
In its submission, Deloitte set out policy options other than grants that could be examined to help grow Australia’s space ecosystem. These include:
the tax system and if it works well for the space ecosystem
the costs of starting a space business and if these are prohibitive
regulatory duties and if these are proportionate to risks
whether businesses can fail fast
whether government procurement is a more sustainable funding mechanism than grants for certain areas of the space industry.
6.31
Gilmour Space Technologies argued that the R&D tax grant should not be discontinued because it is one of the main and/or only sources of funding for commercial space companies.
6.32
FrontierSI stated that increased awareness and targeted use of other government grant programs, such as the AusIndustry’s Business Research and Innovation Initiative would be beneficial to the space industry.
Other challenges
6.33
Other challenges facing the space industry regarding commercialisation include the space technology commercialisation pathway. This was described as being unclear, and should be defined. The Committee heard that lessons could be learned from Defence, who have made investments into defining and building commercialisation pathways. Australia’s space technology roadmaps could also be more commercially oriented, aimed at increasing the Technology Readiness Level (TRL) of sovereign capabilities’ like the Defence Innovation Hub (DIH).
6.34
Australia’s ‘addressable’ market is limited and companies will need help to address the current local markets with products and services to provide opportunities to scale up to global markets. The DIH, Moon to Mars initiative and the CRC Program (such as SmartSat CRC) are crucial ‘planks’ for forming international collaborations to enable world-leading R&D outcomes.
6.35
Saab Australia recommended the establishment of a ‘Research and Development/Capability Development stream that looks for sovereign innovation in adjacent industries with transferability to space related systems and supports the sovereign commercialisation process’.
6.36
Earth Observation Australia (EOA) asserted that government mechanisms that enable more business-to-business and research-to-business collaboration are needed to grow market demand and address capability gaps in the EO sector. EOA also noted that a coordinated approach that brings research in to support the EO industry’s capabilities would be beneficial. A coordinated approach would also foster joint capability across the industry and enable it to develop new services and products for new markets, while helping research organisations achieve real-world impact for their research.
Box 6.2
Myriota is an Internet of Things connectivity solution using a constellation of low Earth-orbit satellites. It is an example of a commercially successful company ‘spun out’ of R&D.
Myriota identified two key factors that facilitated the company’s commercial viability and success:
The company is involved in a novel area of space (‘deep tech’) that is used in both Australia and the rest of the world.
The company’s co-founders discussed creating a commercial portfolio of IP and commercialising it when they started the research program from which Myriota was founded.
Mr Tom Rayner, Vice President Sales, Satellite Communications told the Committee:
It was clearly a research program that was aimed at making a commercial entity as an outcome of the research program. I think that has held us in pretty good stead, right from the way the cap table was structured to begin with, to enable further investment et cetera.
For Myriota, this meant that when it was time for the company to be created, many problems had already been discussed and addressed.
Collaborative tensions
6.37
Productive research and industry collaboration can foster strong commercial outcomes. Sometimes however there can be tension and frustration within these relationships. The Committee heard that collaborative differences, competing products across sectors, funding restrictions, competing organisational priorities and security issues can all hinder effective partnerships between research and industry.
6.38
A lack of sufficient and genuine collaboration between research entities – such as universities, Commonwealth agencies, the CSIRO and CRCs – and the private sector, was identified as an issue. Mr Tim Neale, Managing Director, DataFarming shared his experiences, describing the ‘whole model’ particularly around CRCs as ‘broken’. Mr Neale told the Committee:
It's probably no surprise to all of you to know that we are the worst OECD nation when it comes to commercialising research, and I can see that a lot of those problems are coming from this core problem. I think the whole model, particularly around CRCs, is broken. We're not seeing the flow of research into commercialisation.
6.39
Mr Neale stated that his company felt they were being used by universities to obtain leverage funds with little in the way of commercial outcomes being achieved and attempts to collaborate with CRCs have resulted in requests for money rather than to genuinely collaborate. Mr Neale emphasized that effective collaboration with industry needs to occur from the start. He explained:
I’ve been negotiating with a number of CRCs to try to get projects up, and all they really want out of us is money. It’s not about a collaborative arrangement where we can work together to build a solution. A lot of the time we get, at the end of the process: “What can you commercial out of all this?” We’ve got to start at the beginning as a commercial partner and work our way through; otherwise we should just call it a university, because what it does is research. This is a cooperative research centre, which supposedly turns the R&D into commercial outcomes. That’s what it’s specifically designed to do, and I don’t think it’s working.
6.40
Another stakeholder also submitted that insufficient collaboration is reducing the impact of space R&D and frequently leads to ‘failure to realise operational industry benefits’.
6.41
The release of market products in competition with industry was identified as inhibiting industry growth. In particular, there was concern that public resources and publicly funded IP is ‘locked up’ and used to compete with the private sector. As described by one submitter:
CSIRO’s approach to industry collaboration seems to be spinning off a company and then providing exclusive rights to publicly funded IP to a company owned or partly owned by CSIRO. Then providing access to public sector scientists to support the business – directly against SME’s who actually have “skin in the game”.
6.42
Similar sentiments were echoed by Mr Neale, who said this was leading to market failures:
We are continually finding that universities are bringing new competitive products to market. When we've spent money on products, they bring out competing products and that's creating market failures. CSIRO are also doing a lot of bringing out products to market in competition with private enterprise, and I think that's some of the problem.
6.43
Various products released across the agriculture sector were used as examples to illustrate this point.
6.44
Tensions around funding related mainly to access and perceived inequity. Stakeholders advocated for these funding opportunities to be more open and competitive. For example, one submitter argued that the government preferences university research institutions while under-recognising private sector contributions and opportunities in collaborative space R&D. Similarly, Mr Neale stated that universities receive most CRC research funds however the private sector could undertake some of this R&D particularly those that employ researchers.
6.45
EOS recommended that industry success in commercialising R&D should be acknowledged by the Government.
6.46
QUT stated that despite university research focussing on industry outcomes (including collaborating with large international space primes, licensing research results and establishing space companies), Australian universities are currently not allowed to compete for the same amount of funding as Australian companies. The ASA’s Moon to Mars program was cited as an example of this issue. QUT proposed that the Australian Government ensure universities are eligible for all competitive space funding programs.
6.47
Mrs Ali Buchberger, Director, Industry Engagement (Science and Engineering), QUT, discussed the different funding rounds for the Trailblazer program, suggesting that universities be allowed to apply for more funding rounds:
Our view is that this program is set up to build a pipeline into an Australian moon mission, into the Trailblazer program, and we think that universities play a really valuable role as institutions that develop and commercialise enabling technology for that potential mission. But, obviously, we need to be funded to do that and, given that the commercial potential for these technologies is 10 years from now, when there is a demonstrated lunar economy, in the interim we are really reliant on government funding for that early development work. So I guess it’s the observation that, if not the supply chain round of funding, that at least the demonstrator round provide an opportunity for universities to lead applications to demonstrate key component technologies that could contribute to a Trailblazer mission.
6.48
Mrs Buchberger further argued that opening funding rounds to universities would create ‘a level playing field’ that allows for a greater range of applications from which demonstrator projects and technologies could be developed and then incorporated into a trailblazer mission. Universities are well-placed to develop and commercialise technologies in partnership with international space primes, not just SMEs.
6.49
Collaboration between government, industry and universities is essential to grow the space industry, domestically and internationally. According to Australia Space Futures:
The Australian space sector combined with the tertiary sector in Australia is in the ‘goldilocks’ zone; small enough to collaborate in key areas and large enough to deliver world class research. now is the time to take advantage of this. …
Without collaboration between universities, industry and Government, we miss out on opportunities to create national level initiatives that will help Australia globally.
6.50
Mr Matthew Opie, Director, Defence and Space, University of South Australia, also told the Committee that the ideal ‘dream team’ for R&D collaboration consists of a university, SME and prime due to their different capabilities:
We need research, but we also need the small, smart ideas from small to medium companies. But then you also need the capacity from the primes in order to be able to produce something or commercialise it or understand a bit better how Defence is going to use it. So the dream team on a research project, if you like, is often a prime, a university and an SME – to bring those three capabilities to the team.
6.51
Collaborations between commercial companies and universities (or other research organisations) can sometimes be challenging because of differing R&D strengths, key objectives and financial time frames. Gilmour Space Technologies suggested that these collaborations could be made more realistic, by letting companies lead projects when funding is being used to commercialise technology between TRLs 4 and 9.
6.52
In its submission, Gilmour Space Technologies explained:
The Government has historically mandated that commercial companies partner with universities/research organisations to be eligible for R&D grants. This model has its challenges as both parties have their different strengths (companies are committed to achieving higher TRLs), key objectives (companies are driven by commercial outcomes), and financial time frames (companies are more time constrained).
6.53
Gilmour Space Technologies emphasised that ‘supporting research is not the same as supporting companies’ because discovery-related R&D (generally at TRLs 0-3) is often undertaken by universities and research organisations, while companies are better at innovation, which is the conversion of a discovery into a commercial product (at TRLs 7-9).
6.54
FrontierSI argued that government-based incentives for collaboration between the research and private sectors are needed to promote and increase the commercialisation of research outcomes. The company also suggested that a national business agenda program containing specific priorities could be developed to promote collaborative partnerships. This model would have the advantage of promoting long-term partnerships and increasing the movement of university research into the private sector, thereby increasing the development of business opportunities. Similar sentiments regarding government mechanisms to facilitate collaboration and coordinating collaboration were echoed by EOA in its submission.
6.55
The success of Australia’s space sector depends upon the participation and collaboration of academic institutions and SMEs with ‘higher classified organisations in Australia and internationally’. Penten argued that academic institutions and SMEs, however, are commonly ‘the weak link in supply chains’ as they are often the target of foreign cyber interference and typically lack necessary resources to protect themselves. This vulnerability poses a risk to the successful growth of the space sector and Australia’s security.
6.56
Penten suggested that the C4 EDGE (Evolutionary Digital Ground Environment) communications program could be used as a ’template for industry-wide collaboration in the space industry’.
6.57
Dr Mark Hodge also raised security as a problem affecting R&D, including within the university sector. Dr Hodge explained that ‘the ability to hold a national security clearance is becoming more and more important’, with this clearance not just including the individuals conducting sensitive research in partnership with companies such as DMTC, but also the university ‘infrastructure’ surrounding them, including PhD supervisors. These security concerns extend to the way research has traditionally been performed, as explained by Dr Hodge:
You've also got those cultural elements from universities. Research is peer reviewed. The idea is, 'I'm having trouble with this concept, and who's got a better idea than I have?' That's how research has been done for dozens of generations. It can't always work like that. If you go to a technical conference and you've given your presentation and you're meeting somebody in the hall afterwards, and some stranger comes up to you and says, 'I'm really interested in your research. Can you tell me more?' the first instinct of an academic is to say: 'I'd love to. Let's get together for a beer, and I'll talk about it.' You can't do that, of course. So, there are going to be some serious decisions that are going to have to be made.
Intellectual property
6.58
Fundamental to the commercialisation of R&D is intellectual property. Mr Ian McLeod, Vice President, International, MDA, told the Committee that there are two areas of interest regarding IP: protecting it, and regulating its use and commercialisation. These issues are not confined to the space sector.
6.59
The importance of regulating the use of IP, examples of how IP is currently regulated, and the current challenges in regulating IP were all raised with the Committee. Dr Matthew Tetlow, Chief Executive Officer, Inovor Technologies, explained that ensuring IP is owned by Australians and within Australia is important, because ‘it provides unhindered access to global opportunities without parent companies or foreign government agendas getting in the way’. Dr Tetlow stated that currently Australia does not have policies to maintain local ownership and control of IP, unlike other countries:
Most other countries have specific policies to ensure that space technology and know-how is locally owned and controlled, as they understand the commercial value of the space industry to their economies, not to mention the issue of sovereign priority access to technology when they need it. Australia, by comparison, does not mandate this federally or at the state level to support the Australian commercial space sector.
6.60
Instead, as mentioned by Mr Anthony Murfett, Deputy Head of ASA, the commercial aspects of IP are currently managed by companies, who ‘have their own arrangements to meet their commercial needs’. Mr Murfett stated that issues regarding IP will need to be monitored and explored with regards to the aim of tripling the space economy and creating jobs.
6.61
Australia’s domestic market is unlikely to be big enough to support the entire Australian space industry, meaning that exports will be crucial for long-term growth. MDA argued this means that flexible IP and export control regulations that encourage technology development and exportation by allowing the use of government program developed IP for other international opportunities should be created.
6.62
Boswell Technologies expressed similar sentiments stating that licensing or collaboration is needed to commercialise technology, but argued that ‘controlling the use of the technology and obtaining a return relies on strong IP protection’.
6.63
When asked by the Committee about whether a TSA would facilitate or hinder the development of local Australian companies, Dr Tetlow acknowledged that the ability to export is important for Australia’s space sector, but stated that owning IP in Australia is also important:
But you have to be careful: if you don't structure it [the TSA] properly, it can basically limit the ability of whatever Australian technology is developed to be exported out of Australia. Say company X comes in from the United States [US] and sets up here to meet a capability need. If they've set up a manufacturing or R&D facility or whatever, that's all fine and it works in the Australian context. But if an opportunity comes in, say, from Vietnam or something like that, that export opportunity comes out of the parent company, out of the US or wherever the company comes from. So you have to be careful. You're bringing them in, which upskills us quickly, but then it chops your head off because you then can't export. The reality is we have to export, because we can't rely on the Australian government to fund all our missions going forward. So we're very focused on the export market. That's why we want to own the technology, the IP, in Australia, and have only Australia's agenda in mind when we basically go after a foreign opportunity.
6.64
Examples of how IP is regulated by some organisations within the space sector were shared with the Committee. Mrs Buchberger from QUT described the university’s approach to IP as follows:
The university has an IP policy and protocols which guide us as to how we negotiate with partners, and we're quite flexible. The position that we've determined as probably the easiest to negotiate and the most beneficial for the growth of our sector is an inventor ownership position, which basically says we plus an industry partner work together on component technologies that, for example, make up a lunar rover, and we own the parts we contribute.
6.65
Mrs Buchberger told the Committee that QUT has not experienced any particular issues with their industry partners regarding IP, and that its inventor ownership model ‘works because there are so many component technologies in most space products’.
6.66
The CSIRO’s approach to IP was discussed by Dr Dave Williams, Executive Director, Digital, National Facilities and Collections who noted that the CSIRO uses a couple of different ‘pathways’ for commercialising technology:
In terms of how CSIRO takes things forward commercially, it has three or four paths. Companies will come to us and pay us to do things for them, and they get the IP if it's fully paid for. Sometimes when we have our own science work and we retain the IP, companies will come and licence the IP and we let them work with it. We also create companies, taking an equity stake, which is usually quite a small equity stake. Small companies have difficulty with cash flow so getting a bit of equity is a better way of service.
6.67
Dr Williams stated that each company working with the CSIRO follows the pathway that is most ‘natural’ for them, and that companies are not told they have to follow a certain route.
Challenges
6.68
The Committee heard about several challenges concerning space-related IP regulation including that used by primes, universities and the SmartSat CRC. Boeing Australia submitted that the end-ownership of IP is ‘often a major concern of larger primes when considering collaborating with Australian companies or government agencies’. It argued that IP ownership needs to be managed carefully to ‘avoid restrictive or onerous ownership and/or licensing arrangements’ that could be viewed as a disincentive for international collaboration.
6.69
According to Boeing, ‘when core IP is held at risk, it is a strong disincentive for its inclusion in a proposal by the Prime’. Boeing also noted that the current speed of technology development and innovation means that space-related IP needs to be commercialised quickly as it is ‘relatively perishable in the marketplace’. The company recommended that ‘Government should recognise the need for industry to better exploit IP generated as a result of Government-funded space collaborations’, including ‘consideration of a model where IP defaults to those industry partners best placed to deliver long-term value to the Australian space industry’.
6.70
Mr McLeod from MDA shared a similar view:
I'm a proponent that if you want to develop your industry and you're a government, when you're funding R&D you need to get the IP into the hands of the companies. They're the ones who are going to commercialise it, and they need to be able to take advantage of it and use it for things like exporting.
Having said that, there are export control rules in place for a reason, which is to control where some of that IP goes…
6.71
Dr Michael Smart, Co-Founder and Head of Research and Development, Hypersonix Launch Systems called for more flexibility regarding IP used by universities. Dr Smart told the Committee that ‘if some intellectual property gets used by a company and then that company makes a hell of a lot of money, it should go back to the university’. If, however, a university decides to charge a company a lot of money upfront for using their IP, this then becomes a barrier.
6.72
Mr William Barrett, Senior Vice-President, APAC highlighted another problem stating that IP has been ‘harvested’ from Australian universities by many big multinational companies for years. As stated by Mr Barrett:
That is great at one level for the universities, because they get a little something for it, but it ties it [the IP] up in these big multinationals overseas and is not actually able to be used here. Australia's been a very fertile hunting ground for a lot of those big companies.
6.73
Mr Barrett also stated that consideration needs to be given to whether this IP can be built upon:
The question is: can we actually build on that IP ourselves? That really gets into what we've loosely described, or more broadly described, as an ecosystem here. We need all the pieces to really build a strong space economy here. We have many of those. A few of them are less robust than others. But, as much as anything, it needs a mindset. We have this capability. There are some extremely good companies out there and some very clever ways of doing things.
6.74
Professor Michael Milford, Acting Director, Centre for Robotics, QUT told the Committee that ‘one of the biggest threats is not the IP specifically but the many talented people who would have generated that IP leaving the country’. Professor Milford acknowledged that although this is an indirect problem concerning IP, it is particularly relevant at the moment.
SmartSat Cooperative Research Centre
6.75
Currently the ASA, SmartSat CRC and DST’s Resilient Multi-Mission Space Science, Technology and Research (STaR Shot) comprise a large portion of current space industry development funding. Curtin University stated that if a couple of adjustments were made to this model concerning IP governance there would likely be a larger return on investments made into developing Australia’s space industry. In particular, it was mentioned that:
…our best researchers, who are foundational drivers of science and innovation, are reticent to bring forward proposals to the SmartSat CRC under the present format.
6.76
Curtin University noted that one of their industry partners, who is a core member of SmartSat CRC, ‘recommended not using the SmartSat CRC funding model due to the IP terms and conditions’. The university stated that ‘a refined funding model, addressing both science, and enhancing both the inputs to, and outputs from, SmartSat CRC, will help accelerate and grow Australia’s sovereign space industry’.
6.77
Skycraft raised a similar problem, stating that ‘whilst some incentives such as the SmartSat CRC may appear appealing, some of their organisational features, in particular the IP terms, hinder cash injection by investors into the space ecosystem thus limiting the opportunities for small space companies to leverage their smart ideas into the market place’.
6.78
EOA also stated that IP and funding constraints for research programs focused on industry – such as the CSIRO and CRCs – are ‘not enabling the diverse, flexible, agile, and high level of activities that Australia needs’ with the space sector having ‘progressed significantly beyond the conditions in which these programs were established’.
Intellectual property laws
6.79
Various factors have caused complexity within the space sector’s IP ‘landscape’. These factors include technology complexities, multiple ownership of assets, and tensions between IP laws (which protect private entities) and space law (which has traditionally been government-based). Deloitte stated that an ‘IP protection strategy should be created in parallel with the company’s commercial strategy’ and noted that the Australian Government could identify important areas to harmonise IP regulation.
6.80
King & Wood Mallesons (KWM) also stated that the development of IP laws will need to be considered. By providing protections and rights for the commercialisation of technological ‘know-how’ and innovations, KWM argued that IP laws will have an important role in promoting investment in the space sector. Like Deloitte, KWM acknowledged ‘an inherent challenge in reconciling IP laws, which aims to protect private property and secure benefits for the rights holder, with the fundamental space law principles. This includes that the exploration and use of outer space be for the benefit of all and the non-appropriation of outer space by any nation’.
Protecting intellectual property
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The Committee heard about the importance of protecting space-related IP and its associated challenges. Mr McLeod from MDA told the Committee that IP protection is ‘extremely important’ but also an ongoing challenge that ‘dovetails with cyber protection, because if people can get into your computer systems then they’re directly accessing your IP’.
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Mr Barrett from APAC explained that space-related IP protection is an ‘interesting realm…because the information in space is considered a secure product as much as anything else’. Like Mr McLeod, Mr Barrett told the Committee there is an element of cyber security in protecting IP by ensuring that it does not ‘end up in the wrong hands’ and that companies in the space domain do not get hacked. Mr Barrett also noted that ‘the government has, in its IT security site, put forward a methodology of how it covers essential Australian businesses in space, and rightly so, as part of that’.
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Mr Joshua Bolton, Director, Defence and Intelligence, Penten, further advocated for the protection of Australian IP stating that:
Australia's innovation rooms—the small and medium enterprises and the academic institutions—are creating incredible intellectual value, which is vulnerable to deliberate, malicious activity. If Australia wants to establish a true sovereign space industry and one that is globally competitive, we need to look at ways in which we can foster this growth as well as protect the industry from being compromised. This requires us to work with our allies, particularly the Five Eyes partners, to coordinate and align our priorities. This will give the government and industry the necessary confidence that our emerging technologies are being protected.
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Australia’s sovereign intellectual advantage needs to be maintained and protected through the cyber environment. Mr Bolton stated that ‘for individual companies, such as SMEs, and academia, providing them with a framework to actually secure their intellectual property is fundamental’. It was recommended that SMEs and academia need to be able to coordinate and communicate with each other and the Government in a secure environment to maintain Australia’s intellectual advantage and develop new capabilities.
Committee comment
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Australian space science underpins innovation and discovery within the space industry. It provides opportunities for international engagement, development of technology and industry growth. Closer to home, the application of space science innovation can fundamentally change the way we manage and interact with a range of sectors across the economy.
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The Committee supports the greater promotion of space science as the foundation upon which the space industry evolves. National coordination of space science across government agencies, and a defined set of national space science priorities are welcomed by industry. This will help to inform decision making around investment and space science research programs.
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Successful collaboration between sectors across the space industry has the potential to translate into national and international benefits. These partnerships must be properly supported and fostered. The Committee appreciates the challenges that stakeholders shared regarding perceived inequity in access to funding, competing priorities in collaborative partnerships, or competition more generally across sectors. Stakeholders have expressed their desire for a more level playing field for collaboration and investment between industry and academia. Some stakeholders have also called for a repositioning of these relationships to acknowledge respective strengths and commercial partnerships.
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The Committee recognises that Australia is in its infancy of research commercialisation. There is a need to protect Australian space related IP, ensure fair access to it, and that collaborating efforts involving transfer of IP or discussion of ideas between stakeholders can occur in a secure environment. To that end, the Committee makes the following recommendations.
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The Committee recommends that the Australia Government prioritise and promote the importance of space science as fundamental to innovation and growth of the Australian space sector. This includes:
specific reference to space science in the Australian Space Agency’s Charter and Australia’s Civil Space Strategy;
examining options for better coordination of space science across Commonwealth and state and territory agencies; and
identifying a set of national space science research and innovation priorities to enable stakeholders to make informed decisions regarding investment and research and development.
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The Committee recommends that the Australia government review the model for research and industry collaboration to ensure that it fosters the best outcomes to support innovation, development of space capability, and industry growth.
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This includes access by academia and industry to cross sector research funding streams and programs.
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The Committee recommends that the Australian Government examine options to protect the intellectual property security of stakeholders within the Australian space industry to ensure that collaboration between academics, industry and government can occur in a secure environment.
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The Committee recommends that the Australian Government consider options for industry to commercialise publicly funded research and development and intellectual property creation in a competitive environment.