Better management of innovation and commercialisation – by Mobin Nomvar

Manufacturing for Australia’s self-sufficiency is a must. Here Dr Mobin Nomvar Founder & MD of Scimita Ventures, examines how we can build on innovation to scale as a nation.

In recent years, major conflicts have broken out in Ukraine, a major wheat producer, which together with attacks on ships passing through the Suez Canal and the Red Sea have significantly affected global supply chains.

Impacts on the timely delivery of goods and materials worldwide, along with the Covid-19 pandemic, have sparked debate in Australia around self-sufficiency and sovereign capability – as a nation, we are particularly exposed to global trade.

As we have traditionally excelled as a supplier of raw and processed resources, Australia has one of the lowest capacities to manufacture goods in the developed world.

Australia is facing a crisis if it can’t move up the innovation and manufacturing value chains and start creating these critical, nation building finished goods itself.

In some areas this has been a goal of the Albanese Labor government, with $4 billion earmarked to expand the production of critical minerals, a National Reconstruction Fund established and cash invested in projects supporting recycling and the energy transition. Just two weeks ago, the government also promised $1 billion to boost solar panel production in a Solar Sunshot programme.

There are almost innumerable benefits to investing in sovereign capabilities around manufacturing including:

• Economic diversification and resilience
• National security and defence
• Innovation and high-value jobs
• And Economic complexity and growth.

Many gaps across Australia’s economy

Australia’s challenges with sovereign production run deeper than military and energy infrastructure.

The underlying cause of this is what we call a capability ‘valley of death’. There are two scales of readiness towards a business being able to turn innovation into new products and services: One is Technology Readiness Levels (TRL) and the other is Commercial Readiness Levels (CRL).

Both of these are nine-point scales that plot technical and commercial readiness for launch. In Australia, there are substantial skills gaps in moving innovation through the TRL 3-7 and CRL 1-7 ranges, and this needs to be addressed.

One of the leading reasons for this valley of death effect is that, in many cases, entrepreneurs and innovators are unaware of the assessment process required.

Discussions around entrepreneurship in Australia talks a lot about building moats, TAM SAM and SOM, building the MVP, and many more stages of building a startup.

But the TRL and CRL of the product itself is often overlooked, even within technical fields.

Ultimately what this means is that too many technologies launch with poor commercial capabilities behind them, and the innovation then struggles to convert into a sustainable business model.

Other inhibiting factors include:

• Lack of Integration: There’s a disconnect between the technological development stages and the commercialisation process and no clear path to market adoption
• Insufficient Support: Startups and businesses may lack the necessary support, such as funding, mentorship, and strategic partnerships, to navigate the complex journey from a high TRL to a high CRL
• Market Dynamics: The Australian market is often risk-averse, a barrier to the adoption of new technologies compounded by a manufacturing sector that is transitioning from traditional industries to advanced manufacturing
• And Policy and Legislation: While there are initiatives like the National Reconstruction Fund (NRF) aimed at bolstering manufacturing, policies and legislation may not always provide the clarity or support needed for businesses to confidently invest in advancing their TRL and CRL.

Australia has the natural resources, one of the most educated populations in the world, plenty of space and an appetite for innovation and creative business.

The next step, to solve our manufacturing sovereignty issues and start to advance as a complex economy, is to embed better processes around measuring TRL and CRL.

Picture: Dr Mobin Nomvar