A Model for the Commonwealth Commercialisation Institute

I’ve prepared a paper on the issues facing Australian commercialisation and on how I believe the nascent Commonwealth Commercialisation Institute can solve them. The paper was submitted to the Australian Federal Department of Innovation, Industry, Science & Research in July 2009 and I’ve set the bulk of it out below.


The aim of the paper is to put forward a proposal regarding the role of the Institute and how it can add continuing value to the Australian entrepreneurial ecosystem.

The Gap
While Australia has an abundance of intellectual property raw materials and an entrepreneurial culture, it severely lacks a sustainable entrepreneurial ecosystem for translating these resources into refined products.
The set of market failures facing Australian entrepreneurs and start-ups, collectively termed ‘the Gap’, include  lack of funding mechanisms and business building skills. Over the past decade this Gap has grown wider and the demand for a resolution has increased exponentially.

Minding the Gap: The CCI
The CCI can significantly address these market failures and create a solid bridge across the Gap by providing a concerted solution set designed to establish and maintain an Australian entrepreneurial ecosystem.

This paper recommends that the CCI focus on three key initiatives to maximise its impact:

1. Entrepreneurship Conservatory:- developing a results-based set of training programs for upskilling entrepreneurs using a real time, interactive pedagogy that will form the basis for a ‘science of startups’;

2. Advanced Commercialisation Unit:– developing a suite of grants, mentoring and funding activities designed to derisk and progress the development of IP and startups; and

3. Entrepreneurship Research & Policy Unity:– conducting research and informing policy that broadens Australia’s understanding of the drivers of innovation and that advances entrepreneurship.

Together, these three initiatives will create a virtuous circle, an ecosystem, of entrepreneurship that will lead to a step change improvement in the success of Australian entrepreneurs and high growth, scale companies.


This paper has been prepared by Randal Leeb-du Toit in his private capacity. His interests, affiliations and experience are set out for the purposes of transparency and to provide context for the submissions being made.

Randal, a qualified lawyer, is a multi-faceted entrepreneur and seasoned technology investor. He has had over twenty years first-hand involvement in strategy, investment oversight and operations with over a dozen high technology ventures and multinationals in Australia, USA, Europe, Asia and Africa. He has recently returned to Australia after a stint as CEO of a software company headquartered in Silicon Valley. He currently commercialises technology from, inter alia, the Australian School for Advanced Medicine and the Institute of Human Cognition and Brain Science and is a co-founder of Innovation Bay, an invite-only business network.

Randal was the executive charged with commercialising research from NICTA, a flagship ARC Centre of Excellence backed by the Federal Government, with six universities and four state government partners. He created an entrepreneurial culture and put in place a stage gated commercialisation process and IP management system, which included a proof of concept grant scheme, internal fund and Entrepreneur in Residence Program. He spun out a number of venture-backed companies that collectively employ close to 100 staff globally.

He was also CEO of an early stage venture capital and incubation firm, an intrapreneur within one of the world’s largest business publishing houses, an adviser to News Corporation’s Fox Interactive Media and has been chairman and on the board of numerous companies.


The Australian commercialisation landscape is rich in the basic resources required to achieve results. Australians are curious by nature and driven to create solutions to problems. This culture of entrepreneurship has resulted in a rich tapestry of invention over the years.

Fueled by this culture, the government has been fantastically supportive of fundamental research with organisations such as the Australian Research Council providing many millions of dollars towards furthering research. The country has 37 universities and a number of major public research institutes such as the CSIRO, centres of excellence like NICTA and 48 Cooperative Research Centres.

However, it is in translating this research to market that Australia has been somewhat less successful to date and where there is a strong need for a concerted solution. The federal government and various state governments have supported initiatives in this area – the Building IT Strengths incubator program, Pre-Seed Funds, Innovation Investment Fund program, COMET and the Commercial Ready Program have all produced an array of positive results. The main issue is that these programs have been ad hoc, applied disparately, and as a result they have not sufficiently produced a sustainable entrepreneurial ecosystem.

Take for example the Innovation Investment Fund Program. Initially, under this program there were a number of venture capital firms operating in Australia. Over the years though the number of funds has dwindled, with most funds either ceasing to operate all together or moving off into the private equity sector. Only a few of those that have remained have been able to achieve sufficient return on investment from their portfolios to enable them to raise subsequent funds and increase their funds under management. This has lead to a severe shortage of venture capital in Australia.

The universities and research institutes have received mixed results from their efforts in commercialising their research. The shining light, in having created a sustained and expanding infrastructure, is Uniquest, the technology transfer vehicle for the University of Queensland. Not only has Uniquest created a healthy pipeline of spin out companies and licensing deals, but they have applied their hub and spoke model into other institutions, such as the University of Wollongong.

All too often however, researchers are not sufficiently motivated and incentivised to progress their outputs further than academic papers or conference proceedings. When they do, there are insufficient mechanisms to assist in achieving market validation or delivering proof of concept – essential gates towards receiving meaningful commercialisation funding and ultimately productising their intellectual property.

When researchers and entrepreneurs are able to sufficiently progress their ideas to the point where they would be ready to secure external funding this is for the most part, not obtainable due to a lack of viable funding operators. As mentioned above, there are not many venture capital funds currently operating in Australia.

Another potential source of funds is via high net worth angels. While there is some activity in increasing the number, sophistication and firepower of angel investors, this is still a largely untapped resource for early stage funding in Australia.

Similarly, there is minimal upskilling of entrepreneurs in the country and where such education is carried out it follows an outdated pedagogy that does not accord with the nature of entrepreneurial endeavors, and achieves lacklustre results as a consequence.

Within this landscape, there are a number of pain points that have been exhaustively discussed by others. Collectively these market failures add up to what is called the Gap that yaws wide between early stage ideation and funding and more established venture capital and development.

Acknowledging this collective Gap, this paper posits the view that a concerted solution set is required to create a sustainable entrepreneurial ecosystem in Australia. Providing this concerted approach via one organisation, the Commonwealth Commercialisation Institute will greatly increase the probability of success in this endeavour.


In essence, the mission of the CCI is:-   To improve entrenpreneurship.

By tackling the following goals in a concerted way, the CCI will achieve its mission:
1. Increasing the understanding within Australia of entrepreneurship and commercialisation;
2. Substantially advancing commercialisation and entrepreneurship education and training pedagogy and content;
3. Fostering a culture of commercialisation and promoting entrepreneurship-friendly policies; and
4. Creating a sustainable and concerted approach to facilitating the commercialisation of new and advanced technologies by entrepreneurs and others, which show great promise for improving the economic, environmental and social welfare of Australia.

It is the core submission of this Paper, that the CCI can most effectively achieve its goals and mission by focusing its activities within three key initiatives:
A.  Entrepreneurship Conservatory
B.  Advanced Commercialisation Unit
C.  Entrepreneurship Research & Policy Unit

A. Entrepreneurship Conservatory

Akin to the concept of a conservatory of music, the aim of the Entrepreneurship Conservatory is to provide a unique and dynamic environment within which entrepreneurs can collectively and collaboratively learn while and by doing as they perform and produce their art of entrepreneurship.

This immersive, integrated, iterative and networked pedagogy fits within the fundamental design principle of the Conservatory, namely to establish a program calibrated to the real life, real time entrepreneurial process, rather than following traditional, static forms of instruction.

The Conservatory is results-based and its goal is to assist Australia prepare more entrepreneurs who anticipate the highest possible rates of success measured, in part, by the creation of larger numbers of new businesses that foster wholly new industries.

The Conservatory will draw from innovative models such as the Kauffman Foundation’s Laboratory for Enterprise Creation, private sector accelerators and a range of programs that support entrepreneurs like Y Combinator, Seedcamp and the Founder’s Institute.

In doing so the Conservatory will build up a comprehensive and cohesive set of programs. The Conservatory will also act as a test bed for the CCI to formulate a fundamental knowledge base for teaching and progressing entrepreneurship in Australia that will become a referenceable ‘science of startups’ and will lead to an acceleration in the number and success of high growth, scale companies.

B. Advanced Commercialisation Unit

The Advanced Commercialisation Unit is focused on derisking and progressing the development of intellectual property and startups through various forms of grants, mentoring and funding mechanisms such as increasing the number of sophisticated angel investors and experienced early stage funds.

B.1 Public Research
The CCI explores ways to enable higher levels of entrepreneurship through the commercialisation of university and public research institute-based technologies by partnering with these institutions, industry and philanthropists to ensure more effective translation of research to market.

One of the methods the CCI will employ is to create Proof of Concept centres attached to various public research institutes. These centres recognise the significant lack of funding and expertise available for early stage entrepreneurs within such institutes to prove the concepts of their innovations as a precursor to progressing to market.

The centres will provide:
* expert assistance; and
* seed funding, in the form of market validation grants and proof of concept grants that can be used towards creating a working prototype.

Not only will the CCI establish such centres in partnership with public research institutes, but it will also crystallise best practices, monitor outcomes and facilitate networking amongst the centres.

B.2 Private Funding
The CCI will work with high net worth individuals and various angel networks and associations to formulate a program of accreditation and deeper sophistication amongst this essential element of the entrepreneurial ecosystem.

The aim is to deepen the pool of active angels, create better efficiencies in their funding methods and ultimately assist them to deliver better return on investment for the private capital they are deploying, while also increasing the pool of mentors for nascent entrepreneurs.

B.3 Institutional Funding
The CCI’s aim with regards to institutional funding is to get well trained managers into the market so that they produce higher return on investment, and give potential institutional limited partners, such as superannuation funds greater comfort in deploying capital into the venture capital sector of the alternative assets arena.

The first mechanism the CCI will utilise is the creation of a Fund of Seed Funds. Suitable managers will be identified who can create a series of seed funds. It is anticipated that partnerships will be formed with well established funds in Silicon Valley who can provide an initial impetus of experience into these funds.

In addition, the CCI will implement a fellowship program through which recipients will undertake a 24 month educational program of immersive training with partner venture capital firms. As the Australian seed funds gain track record and experience, the fellows will spend an increasing portion of their time immersed in these funds as well. This program is designed to educate and train emerging leaders in venture capital and will feature a structured curriculum that includes a tailored learning plan, mentoring, peer learning and industry-specific development.

C. Entrepreneurship Research & Policy Unit

The CCI will conduct and fund research that contributes to a broader understanding of the drivers of innovation and that best advances entrepreneurship.

This unit will be informed by activities in both the Conservatory and the Advanced Commercialisation Unit and, in turn, as a ‘science of startups’ crystallises, the unit will be able to guide these two units.

In addition, the unit will provide funding for and manage a number of post doctoral research grants to further Australian research in the ‘science of startups’.

The unit will also formulate empirical data and findings that can be used by the Federal Government as the basis upon which to set policy in the areas of innovation and commercialisation.

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4 thoughts on “A Model for the Commonwealth Commercialisation Institute

  1. I think the author’s recommendations are very laudable, however, I would suggest that his three tier approach should be tailor made to suit each member state’s needs. For example, in dealing with my country Ghana, I would advise the CCI, to lay much more emphasis on his second point, that deals with grants mentoring and funding activities.

  2. Thanks for your comment, Sarah. This paper was specifically written for the Australian market, but I see no reason why a customized model could not be applied in other countries.

  3. Pingback: metarand » Blog Archive » US Leads The Way With New Office For Entrepreneurship & Innovation

  4. For Australian companies there has always been market failure associated with extending their busiesses internationally. The market failure is partly due to the tyranny of geographic distance as well as the same cultural hurdles anyone will face when selling into a different culture. However, as someone who has been involved in helping Australian commercial interests bridge those gaps for all of my career, I think that there is also a case for the Institute to help bridge the geographic and cultural market failure associated with commercialising technology and innovation internationally.

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