5 Improving institutional management of research and research training

5.1 Ensuring the excellence of Australian research and research training is a task which is shared between the Government, funding agencies and universities. Governments and funding agencies have a responsibility to ensure that funding arrangements, incentive structures and regulatory arrangements enable the generation of high quality research outcomes. Institutions have the key responsibility to create the conditions and manage the resources entrusted to them to achieve the best possible research performance.

Facilitating commercialisation

5.2 Universities can play a key role in facilitating the generation of economic activity and the development of new spin-off enterprises, both in their local region and nationally. There are enormous potential benefits to institutions, researchers and Australian society from linkages between universities and others which create the conditions for the effective commercialisation of discoveries.

5.3 Elements of a positive environment for commercialisation include the existence of employment arrangements which facilitate the movement of researchers between universities and firms, remuneration and incentive arrangements which ensure that researchers share in the benefits flowing from commercialisation of their work, and clear institutional policies on commercialisation including the management of intellectual property.

5.4 The performance of universities in these areas is mixed. There are, of course, many examples of innovative approaches to support the commercial exploitation of good ideas: e.g. the work of the Photovoltaic Special Research Centre at The University of New South Wales, which is now at the forefront of international developments in solar cell technology. We need a more pervasive entrepreneurial culture which positively encourages the commercial development of research discoveries and effective links with the business sector, together with transparent institutional structures and management arrangements which support such a culture. We should ensure, for example, there are not unnecessary barriers which prevent researchers from holding equity in companies, or from performing research in the private sector, while holding staff positions. Greater and more creative use could be made of decentralised industrial relations arrangements to tailor terms and conditions of employment and reward structures to suit the particular circumstances and needs of collaborative ventures involving institutions and business partners.

Improving transparency and accountability

5.5 Accountability in terms of both planning and reporting is an important element of good management. Transparency in the setting of institutional goals and strategies for research and research training and public reporting about measures of success in achieving those goals are key elements of a management culture focussed on performance.

Research and Research Training Management Plans

5.6 Universities currently do not have to report publicly on their plans for the use of public funding for research and research training, nor on the measures they use for assessing their success in achieving their goals.

5.7 As a means of giving impetus to strategic management by institutions and to facilitate the transfer of good practice across the system, the Government proposes that institutions be required to develop strategic Research and Research Training Management Plans. These plans would become a condition of receipt of block research funding and funding for postgraduate training. Such a requirement provides a clear signal of the emphasis placed by the Commonwealth on effective and efficient management of research and research training by institutions and accountability for the use of public resources.

5.8 These plans will also help to improve the internal linkages that institutions make between their research activity and the environment they establish for research training. No institution, however large, can support high quality research or research training across all potential areas of research activity. There are benefits to be gained from clear definition of priorities and the concentration of resources in areas of strength as too wide a spread of activity inevitably results in a thin spread of resources with consequential effects on quality.

5.9 There should be no single, preferred model to which plans should aspire. Most institutions already engage in a process of research planning. Research and Research Training Management Plans will build on the processes already in place. They would provide the opportunity for institutions to articulate their diverse strategies, and approaches to both research and research training, their criteria for success and achievements against these criteria. Diversity would be actively encouraged, consistent with the particular strengths of individual institutions.

5.10 Research and Research Training Management Plans would be public documents and would form the basis for a strategic discussion between institutions and the Commonwealth on the strategies proposed to manage research and research training and institutions' performance. The intention of these arrangements is to focus on directions and strategies, rather than detailed procedures. Information requirements are outlined in Chapter 7.

Funding research: ensuring incentives are appropriate

5.11 Funding formulae have a considerable impact on behaviour. Quite rationally, institutions seek to structure their affairs to score well against the measures included in formulae in order to attain a greater share of available funds. One area in which incentive structures need to be reviewed is the formula for allocation of block research funds.

5.12 Currently, considerable resources in the form of the Research Quantum component of the operating grant, as well as research HECS exemption scholarships, Australian Postgraduate Awards (APA) (which provide stipends for research students) and the RIBG Programme are allocated by formula.

5.13 The formula which allocates the Research Quantum, Research HECS exemptions and Australian Postgraduate Awards (known as the Composite Index) contains both an input component in the form of research income (80 per cent) and output components in the form of research publications (10 per cent) and higher degree research completions (10 per cent). The input component of the Composite Index attributes to a dollar of national competitive grant funds twice the weight of a dollar gained from other sources.

5.14 The higher weighting attributed to national competitive grants income creates a direct financial incentive for institutions to seek to win competitive grants, at the cost of pursuing linkages with users which generate other income streams. Universities which have made the decision to focus their research effort on links with their regional economies and communities, rather than winning competitive grants, are particularly disadvantaged. This is inappropriate in an environment in which universities should be encouraged to diversify their sources of funding and engage more closely with the national innovation system.

5.15 The publications component of the Composite Index has been subject to a range of criticisms since its implementation in 1995. These concern the reliability of the information provided by institutions, the costs of data collection and the incentives created by the inclusion of a publications component in the index.³⁶ It seems likely that the publications component of the Composite Index has stimulated an increased volume of publication at the expense of quality due to the view that every publication is associated with additional funding through the Research Quantum. This is not in the best interests of Australian research.

5.16 On these grounds, the Government proposes to equalise the weight given to national competitive grants and other research income and to drop the publications measure in any future indices used to allocate block research funds.³⁷ In addition, the definition of research income should be refined to include consultancy income which contributes to innovation. The formula will better reflect and reward universities' ability to attract research income from a diverse range of sources.

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