In my seven years as Fairfax CEO I received one particular phone call that told me a lot about the relationship between Australian business and universities.
An academic was wanting to know what aspects of the rapidly unfolding information and communications technology revolution were keeping me awake at night. It wasn't the conversation itself that was significant, but the fact that this was the only time during my tenure at one of Australia's most influential media companies that a researcher approached me for a first-hand industry view.
It seemed obvious then that this apparent disconnection between Australian business and the tertiary institutions charged with training the next generation of workers and driving a large part of the national research agenda was not productive.
The Rudd government's more recent soul-searching over the future of Australia's chronically underresourced universities - and their role in innovation, and therefore, national prosperity - now has us scrambling to bridge the gap. Many funding mechanisms and policy pronouncements are urging us down the path of greater collaboration, seeking to double interaction over the next decade.
We already know how mutually beneficial the right partnerships can be in linking scientific discovery to real-world application, for example, with ensuing commercial success. But the core questions are: what do business and industry want from Australia's higher education sector, and vice versa?
What business wants, overwhelmingly, are quality graduates with the knowledge and skills to match business priorities and the ability to adapt when circumstances change. Business and industry also need research that fulfils specific commercial ambitions.
Universities also want collaboration. Close links to business inform curriculum development, helping to attract the best students to industry-relevant degrees. Meaningful private sector investment in research pushes discovery out of the lab and into the market. The icing on this cake is corporate philanthropy, which can create innovative research chairs or help get infrastructure plans off the ground.
When the collaborative stars do align, the outcomes can be spectacular. Five years ago, the University of NSW was training engineering cadets on behalf of steel maker OneSteel, when a visiting senior manager was introduced to a novel research project.
The idea was ''green steel''. UNSW professor Veena Sahajwalla had discovered waste plastic and tyres could be "mixed in" with the coke and coal in an electric arc furnace, creating a cleaner, more efficient burn and reducing the electricity required to make steel. It worked in the lab, but the researchers needed an industrial partner for real-world trials. OneSteel's Sydney and Melbourne plants are now manufacturing all their steel products using the UNSW ''polymer injection" green steel method, cutting emissions in one of the world's most polluting industries.
For ''green steel'' the synergy with industry was obvious, and there's a very long list of projects with similar potential. But the bigger picture tells a different story and makes it clear the mantra of collaboration can take us only so far.
Over the past three decades Australia's private sector has moved steadily into research and development, while universities have struggled simply to maintain their share of research and development due to continually declining government funding. Consequently, half of all Australia's R&D is now funded by the private sector and the national ''discovery'' map has shifted, unsurprisingly, towards applied research with clear commercial applications.
This is where our paths do, and indeed should, diverge. The role of universities is to take the risks business and industry cannot afford within short or medium-term profit cycles, to pursue ''blue sky'' knowledge and to nurture a diverse research agenda framed by the common good.
Most discovery is a very long-term game, such as the international quest to build a superfast computer by harnessing the power of atoms. Australian universities are at the forefront of quantum computing technology, but this exceptionally complex research does not lend itself to a simple investment-to-patent- commercialisation chain.
And what of unexpected research spin-offs? We have recently discovered, for example, that a new understanding of toxicity in algal blooms in eastern Australia has potential implications for understanding processes associated with Parkinson's and Alzheimer's disease.
Much of the frontier science and innovation that rightly sits at the top of the federal government's national priority lists does not fit into neat, mutually beneficial university-business tie-ups.
Just over 7 per cent of UNSW's research budget for 2008 came from industry co-contributions to collaborative grants - above the national average. Every cent of this $20 million was welcome, as were the opportunities to listen to our industry and business partners.
But a university the size of UNSW is a $1.4 billion-a-year operation. Even if we do manage to double collaboration, business investment in university-based research will only ever be a selective, profit-driven field. Nor will the private sector ever play a significant role in funding teaching and learning. UNSW has a valuable 400-500 industry-supported places, but ultimately the benefits of education are owned by the graduates who are free to take them anywhere they like. The "payback" from industry scholarships and cadetships is never certain.
The basic issue for universities is the legacy of chronic underfunding and a dysfunctional revenue model that forces us to use teaching income to subsidise research, despite the profound economic and social worth of maintaining a broad, national research agenda. What we need is stable, adequate funding. And business needs to be able to reap the benefits of a world-class higher education system.
Professor Fred Hilmer is UNSW president and vice-chancellor. Before this he was John Fairfax Holdings CEO. He spoke yesterday on university and business collaboration at the Universities Australia Conference 2010 in Canberra.
