Mark Carnegie and Steve Baxter are wrong, we mustn't discount unis in ideas boom

Australian Financial Review
by Clare Harding
Sept 19 2016

High-profile VC Steve Baxter joined M H Carnegie & Co founding partner Mark Carnegie in recently arguing that start-ups and corporates should avoid getting involved with universities.

According to Carnegie, collaborating with universities to commercialise research and ideas isn't worth it, because they are "incredibly cumbersome", and according to Baxter, "not easy" to collaborate with.

In his criticism, Baxter later pointed (on Twitter) to a speech in April by influential VC and Y Combinator co-founder Paul Graham, where the high-profile VC said: "Universities are great at bringing together founders, but beyond that the best thing they can do is get out of the way."

As deputy director of the Melbourne Accelerator Program at the University of Melbourne, which has supported more than 34 start-ups in its accelerator since 2012 and hosted more than 13,000 guests at its pre-accelerator events in the last 18 months alone, I have to disagree with them.

Not only is it my view that universities have a crucial role to play in fostering entrepreneurship to ensure the "ideas boom" lives up to its promise, but it also my belief that universities and existing businesses can, do, and should work collaboratively together.

At the Melbourne Accelerator Program for instance, we've partnered successfully with Australia Post to support small business and to accelerate e-commerce innovation across Australia.

Melbourne Accelerator Program's alumni companies include Brosa (Australia's leading online furniture store), Nura (the company behind headphones that adapt to your hearing, which broke the Australian Kickstarter record by securing more than $2 million in crowdfunding), and Palette (which has partnered with Australian paint firm Dulux to bring its colour-sensing technology to new markets).

It is easy to tell ourselves that the two archetypal worlds of academia's ivory tower and the business world are too different ever to come together.

Trying harder

Certainly, anybody who has tried to bridge the gap knows that it can be difficult. Stories abound of companies that have found universities to be at times bureaucratic and frustrating to negotiate with on intellectual property rights, and OECD data suggests that Australia ranks particularly poorly on measures of university-industry collaboration.

But that doesn't mean it can't work – and it doesn't mean we shouldn't try harder.

It can work. Despite the negative commentary, Australian universities have already done great things: just look at Melbourne drug developer Fibrotech Therapeutics, which was spun out of the University of Melbourne and acquired in 2014 for more than $80 million by Irish pharmaceutical company Shire in one of Australia's biggest biotech deals.

This is important because young companies, including start-ups, created nearly all of the 1.6 million net new jobs in Australia from 2003 to 2014, The Australian Financial Review recently reported.

Change is afoot, and forward-thinking universities across Australia are adapting and embracing the entrepreneurial zeitgeist.

A small sample: the University of Sydney's Incubate program has graduated more than 53 start-ups that are now collectively estimated to be valued at more than $33 million; the University of Newcastle recently began an entrepreneurship programwith corporate accelerator Slingshot; the University of Western Australia's entrepreneurship course is run by another corporate accelerator, Pollenizer; Macquarie University has committed about $7 million to an incubator program and joined forces with major companies to put Sydney's Macquarie Park on the map as a start-up destination; the University of Wollongong recently opened its $18.5 million iAccelerate facility; and Monash University has partnered with Boston-based MassChallenge to give 45 start-ups mentoring and training at a three-day bootcamp.

Then there's us – MAP – whose start-ups have created more than 200 jobs, raised more than $11 million, and generated more than $10 million in revenue since 2012.

But more than that – we are helping change attitudes. On our campus, entrepreneurship is now seen as a viable career option.

Entrepreneurial ecosystem

We form but one part of a flourishing entrepreneurial ecosystem at the University of Melbourne, which includes pioneering initiatives such as the Wade Institute for Entrepreneurship and the M2 Venture Catalyst (a partnership between Melbourne and Monash universities, and the Victorian government).

Fruitful relationships between our peer universities, corporates and other organisations are blossoming all around us – and all over Australia.

The old adage that town is town and gown is gown, and never the twain shall meet, is yesterday's news. What do universities have to offer? In a nutshell: ideas and people.

The research being done in Australia's universities matters: we won't solve our biggest problems without it. A business attitude that seeks to exclude universities from the world of entrepreneurship would shut down a whole range of pathways for amazing ideas to get out into society.

Smart, curious, engaged people from across the world flock to Australia's universities.

They are demanding opportunities to develop entrepreneurial skills. Why? Because the old career certainties are dead.

Arguably, more than any preceding generation, young people will have to create their own jobs (and their new companies will be responsible for creating the jobs of many of their peers). We need to create an entrepreneurial generation.

While I understand Baxter and Carnegie's frustrations, we can't afford to throw the baby out with the bathwater.

Australian universities are demonstrating that they can be great engines of the entrepreneurial boom, and we need to support them every step of the way so that they can play a leading role in creating a vibrant, prosperous future for Australia.

Throwing up our hands and saying, "It's too hard, let's not bother" is defeatist; it certainly isn't entrepreneurial.

Too much is at stake for us to let this opportunity slip.

Dr Clare Harding is deputy director of the Melbourne Accelerator Program at the University of Melbourne.