Montana-born and Harvard-educated, astrophysicist Brian Schmidt has worked at the Australian National University’s Mount Stromlo Observatory since 1995 and won the Nobel prize in physics in 2011 with two other researchers for showing the expansion of the universe is accelerating, not slowing as previously thought. As well as growing his own wine in the Canberra district, he’s become deeply interested in promoting links between science and business in his new country. Now 48, he becomes the ANU’s vice-chancellor in January, chosen after a worldwide search because of his ideas about enhancing the university experience for students and staff, and deepening the ANU’s engagement with entrepreneurs and policymakers.
Hamish McDonald Does Australia have world-beating technologies?
Brian Schmidt Australia has developed a lot of very interesting things in the high-tech space over the years. In my own area of astronomy, Australia has the very famous wi-fi example. Other things like Google Maps, medical devices like ResMed with sleep apnoea, and CSL, one of the leaders in manufacturing vaccines, Gardasil, and Cochlear doing the bionic ear. It’s a very vibrant market but not as vibrant as it should be.
HM What’s been the typical progression of these ideas and discoveries?
BS Entrepreneurs, often scientists or technologists, taking risk. They come up with an idea, they try to make it work, often not getting the support so they risk house and home to get it across the line. Those are the success stories. There are train wrecks out there which never get publicised. So in almost all cases, except for CSL, a big company, there’s been extreme risk-taking. It wasn’t just easy sailing for Graeme Clark with Cochlear. John O’Sullivan and the others who made wi-fi work put in equity in their own homes. That’s been a standard mode up until five to seven years ago. Then we started getting the idea of venture capital. It’s still very young here, not done on a mass scale. We just haven’t got those centres really bubbling. We don’t have people in and out of industry and academia. We really need a thriving entrepreneurial culture.
HM You read of those who get a great idea going, then somebody in America buys them out and the whole thing shifts over there.
BS That’s the big problem. In Australia they’ll have an idea, get a prototype and grow that. A small domestic market has always been considered a huge weakness for Australia. You can go global pretty quickly, but you have to have the capacity to do that: not only capital but skills. So someone cuts the entrepreneur a cheque, supplies the expertise, and you go off country. We lose the ideas and the money.
HM So what are the institutional gaps and lack of incentives that make that happen?
BS Venture capital funds in Australia tend to be very risk-averse relative to those in the US. They want something a bit further down the line. We have trillions in savings but somehow it doesn’t seem to be possible to raise $150 million locally. They also tend to lack the skills. Venture capital isn’t just the money, it’s the expertise that goes with it. We are also a fairly high tax regime – lower than the US which has other advantages, but less favourable than the UK, Singapore, Hong Kong or Israel.
HM So the investment fund needs to put somebody in to grow the business alongside the scientist or engineer?
BS Yes. You’re going to be the chief technology officer, and we are going to give you a chief executive officer, a chief financial officer and 15 other middle managers who know what they are doing in the space. These guys are all in the [San Francisco] Bay Area. They are not going to move to Australia, so you need to move your company there. It’s of such profound consequences for the future of this country. Not many of our high-tech companies make it to being viable; the ones that do mostly go offshore. [Software developer] Atlassian is the stand-out.
HM Is the problem that our inventors tend to be in institutions such as the universities and government laboratories and think like public-sector employees?
BS That’s not a problem. Many inventors in the US are public-sector employees. But there is the culture of moving around. Here it’s not made easy: the culture here is if you leave, you’re never going to be able to come back. That’s one of the things I want to be able to make possible in the ANU. A piece of paper to say: no problem, you’re gone for three, six, nine months into start-ups, into business, into government, into NGOs and you can come back; we value that experience in what you’re doing. It should be part of being at the university to be able to take three months off to do really highly skilled activity that could make millions of dollars or more than likely go bust. We’re going to get more exciting and interesting people who may look just a little different from the academics of today. It doesn’t mean everyone has to do it but it would be really exciting if at least some people did.
HM Was that part of your pitch for the ANU job?
BS Absolutely. It’s how to get engagement. When I start in January I’ll try to get that bedded down in the culture. It’s harder to do than you might think because it really is seen as a threat to go out and do things. The easiest people are going to be the graduate students who haven’t yet figured out how many publications they need to get a permanent job. Then we can try to bring in some of the expats who’ve been in the US, relatively young ones who’ve been able to do both.
HM America has the military-industrial complex, Israel has something similar, feeding money to cutting-edge research. Do we lack something here?
BS Almost certainly yes. What the US does with the departments that have to do innovative R&D purchases, they mandate that 3 per cent goes into emerging small-time companies. All of our competitors are doing this. As much as it would be nice to have a completely free, open and transparent market, that’s not the way the world is. So if we choose to only buy without looking at how it feeds into the domestic business environment we will be disadvantaged because other people do not have such an enlightened view.
HM Can Australia get this business and technological expertise from other sources, such as India and China?
BS Our system is very good at delivering skilled workers when we need them. We have very strong and supportive communities in this country for people from around the world. Immigrants find life in Australia actually pretty good right now so that makes us an attractive destination for high-risk migrants. That’s a huge luxury that this country has. But we’ve got to have the right companies. We’re not a low-cost country so we’ve got to be in the high value-add part. Not cheap cars but really expensive electric cars, if you’re going to make cars. We need to be doing things at the cutting edge, like Cochlear.
HM What else do you look to achieve at the ANU?
BS A very strong undergraduate and graduate experience, an education that is world-class no matter how you define it. I came through Harvard: we’re not quite there yet, but we’re closer than people realise. Changing the culture of how we work and engage: we want to be in the centre of making sure the government has the best possible advice on policy. We are the national university, we need to be in there working with other national institutions. Making sure our research is second to none. Taking risks on young people who have great ideas.
This article was first published in the print edition of The Saturday Paper on October 24, 2015 as "Shooting for the sky".
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