So tough to be average

Up to the global financial crisis (GFC), the rise in Australia's business expenditure on R&D (BERD) drove Australia's catch up with the average that countries in the OECD spend on R&D relative to their GDP.

However, since 2008-09 the ratio of BERD to GDP has been in steady decline, and according to recent data by the Australian Bureau of Statistics this negative trend continues despite absolute increases in spending. During 2013-14, expenditure on R&D by Australian businesses increased by around 3% to $18.85 billion, while BERD as percentage of GDP fell from 1.23% in 2011-12 to 1.19% in 2013-14.

And this has become a drag on Australia's overall spending on R&D by businesses, government, private non-profit and higher eductation sectors. Thus Australia's R&D intensity, measured as gross expenditure on R&D (GERD) as a proportion of GDP, also fell slightly, from 2.13% in 2011-12 to 2.12% in 2013-14.

There are some interesting positives in the business landscape, though. While overall growth in spending on R&D has not yet recovered to pre-GFC levels, businesses are ramping up the amount of human resources they devote in this area. In 2013-14 businesses had almost 79 thousand person years of effort (PYE) devoted to R&D, an increase of 21% from 2011-12

Importantly, there was a 23% increase in the PYE by researchers, suggesting that business is investing more in this, by OECD standards, notoriously underrepresented species of workers in Australia's private sector.

But it may be the structural changes the Australian economy is going through in the moment that mainly account for this. With the end of the mining boom, BERD in the mining sector is falling (down 31% in 2013-14), while the traditionally R&D strong sectors, Manufacturing (up 8%) and Professional, scientific and technical services (up 32%) are ramping up their effort.

As a result, Manufacturing has shaken off the challenge by Mining and is again the top spending sector, now followed by the professional, scientific and technical services sector.

It reflects the current structural shift in Australia's economy, which until quite recently was heavily dominated by its resources sector.

This is also apparent in that by far the largest relative increase in BERD occurred in activities categorised as pure basic research (up 43%), although this type of activities are still making up less than 1% of total BERD.

But businesses also spent more on strategic basic research (up 4.6%) and applied research (5.3%), which now together account for 38% of total BERD.

By contrast, BERD targeting experimental development, which is typical for Mining, rose only slightly by 1%, although it still makes up around 60% of total BERD.

While these figures are in line with what we know about the current changes in Australia's economy. However, they also demonstrate that much of Australia's decade long catch-up with BERD of other innovation leaders in the OECD was on the back of a very volatile sector that now comes off the boil.

The fall in GERD was still relatively mild, and this can be attributed to our higher education sector. Here spending on R&D rose by $1 billion to $9.9 billion, an increase in spending of 11% from 2011-12 levels. But as the public purse tightens, these increase are unlikely to be sustained, which leaves the question who is going to fill the gap left by tottering miners.

Worryingly, Australia is again losing ground against competitor nations as across the OECD the trend is turning again into positive terrain.

In its latest (2015) update of main science and technology indicators, the OECD estimates that in 2013 R&D spending rose by 2.7% in real terms from 2012 levels, with growth driven by strong increases in BERD (up 3.5%). As a percentage of GDP, average GERD remained at 2.4%, which compares to Australia's 2.1%.

All connected in WA

According to Cisco's estimates, the value resulting from IoE activities in Australia could be more than US$74 billion over the next 10 years through cost savings, productivity gains, new revenues and improved citizen experiences.

Curtin and its foundation partner Woodside Energy have committed $30 million to the new industry and research collaboration hub, with the aim to create a state-of-the-art 'connected community' that shares solutions between astronomy and radio physics, oil and gas, finance, transport and government.

The centre will be home to over 80 researchers, and provide links to advanced facilities and a global industry network.

Speaking at the centre's launch, the state's premier Colin Barnett pointed out that at present only two per cent of all things that could be connected were connected.

"With all these devices producing information, finding innovative solutions to create meaning from and extracting value from them will be a competitive advantage."

The Internet of Everything...

... aims for the intelligent connection of people, process, data and things.

As Cisco describes it, the IoE  is bringing together people, process, data, and things to make networked connections more relevant and valuable than ever before-turning information into actions that create new capabilities, richer experiences, and unprecedented economic opportunity for businesses, individuals, and countries .

The concept builds on the 'Internet of Things' by adding network intelligence and security.

Click image to enlarge

The implementation of the Square Kilometre Array will be a major driver of the state's data intensive science capabilities. But Mr Barnett highlighted that improved connectivity, support and service delivery will also benefit other major economic activities occurring in very remote areas, from resources projects through to the delivery of Government services.

The IoE centre will have an important role to play in engaging the state's small and medium enterprises with large company problems, Mr Barnett said.

Later in the year, a second hub will be established in Sydney at Sirca, a not for profit company established by collaborating Australian and New Zealand universities to develop relevant global data and advanced tools supporting financial research and innovation.

Stately budgeting

Hey big spender

However, according to the first budget by NSW treasurer Gladys Berejiklian, debt levels will still increase from $6.7 billion or 1.3% of Gross State Product (GSP) to $15.8 billion or 2.6% of GSP over the forward estimates. This is because the government plans to reinvest proceeds of previous asset sales into capital expenditure.

With plenty of money coming in, unemployment low and the economy growing at above trend, the government can look forward to surplusses for years to come, with $713 million estimated for 2015-16.

Growth of both expenses and revenues are forecast to average 2.8% over the four years to 2018-19, while the treasurer still made new savings totalling $1.1 billion. The governmet's still relatively conservative approach reflects the fragility of its fortunate fiscal position: stamp duty is a very volatile source of income.

Still, conservative does not mean frugal, with record expenditure in areas such as health ($19.6 billion in 2015-16) and schools ($12.4 billion in 2015-16). Notably, the government will invest a total of $68 billion over four years in infrastructure projects, including $38 billion over four years for roads and transport.

There are also $1.3 billion for initiatives supporting primary industries, much of which will target water reform.

But there are only few new investments targeting areas of R&D and innovation. They include:

An additional $159 million over four years will be invested in medical research in NSW:

• $10 million over four years to support 66 PhD and post-doctorate fellowships,
• $40 million over four years of a new Health Services Research Support Program;
• $25 million over four years for paediatric research facilities;
• $20 million over four years for research into medical cannabis;
• $10 million for Neuroscience Research Australia (NeuRA) to complete refurbishment of the Margarete Ainsworth building at Randwick and enhance the work of NeuRA and the Schizophrenia Research Institute;and
• $10 million to the University of Sydney Westmead precinct redevelopment to create an innovation hub connecting research, education and health services.

In total over $1 billion over four years will be spent on medical resarch in NSW.

• $18 million in 2015-16 for the Research Attraction and Acceleration Program;
• ongoing support for the Innovate NSW program which supports small and medium enterprises to collaborate with industry and end-users; and
• ongoing support for five industry-led Knowledge Hubs to drive collaboration and innovation in key industry sectors.

The economy barely grew in 2014-15, according to budget estimates by 1.3%, and significant challenges are ahead such as the closure of Holden's car manufacturing plant and falling commodity prices. Nevertheless, gross state product (GSP) is projected to grow by 2% in 2015-16, although this is still well below the national average of near 3%.

After years of deficit following the GFC, the government expects a surplus of $43 million in 2015-16, with $961 million forecast across the forward estimates.

Net government debt will peak at $6.5 billion in 2016-17 and then fall to $5.8 billion in 2018-19. This equates to 30% of total government revenue [This comparison provided in the budget is considered more meaningful than the often used debt/GST ratio. According to the Centre for Independent Studies, net debt averaged around 21% of government revenue accross Australian states in 2012-13.]

A series of measures, including tax deductions totalling almost $670 million over the forward estimates, are to reduce the costs for businesses in the state. The changes, the "most comprehensive tax reforms in South Australia's history", mostly concern changes to aspects of stamp duty, which are ongoing and could return almost $2.5 billion to businesses and the community over the next decade.

As part of the package, the government also aims to boost the state's mineral resources and energy sector by extending the current concessional stamp duty for exploration tenements to retention tenements, before abolishing it altogether by July 2018. According to treasurer Tom Koutsantonis, this will remove another impediment to exploration and investment.

The government will also create an Industry Attraction Fund, for which it has allocated $15 million, and a number of other initiatives designed to make the state more business friendly. In total, these measures are going to cost an estimated $985 million over four years, including targeted investments of $165 million over four years in road infrastructure.

A budget highlight also the $8 million provided for the Goyder Institute of Water Research. The money will be matched with in-kind contributions from research partners for research on irrigation efficiencies, water quality and environmental watering requirements in preparation for the impacts of climate change. The government estimates that the research will result in current and future benefits worth around $500 million.

Mandated fueling

In New South Wales, current legislation requires that 6% of the total volume of petrol sold in the state is made up of ethanol. But experience with this mandate has been mixed, because there remains a substantial gap between ambition and reality - a graph displayed on the NSW Government's Trade & Investment webiste shows that ethanol accounted for less than 4% in every quarter of the year's 2008 to 2014. And since 2013, the share of ethanol is actually in decline.

Use of ethanol-blended fuel in NSW: Click image to enlarge

In Queensland, ethanol-blended fuel has been available at petrol stations for more than a decade, but the 10% ethanol mix with unleaded petrol sold as E10 has also not been popular with the sunshine state's motorists. In 2013-14, ethanol accounted for only around 1.2% of the combined volume of sold regular unleaded petrol and E10, and there is even a downwards trend in the use of ethanol-blended petrol.

The new Queensland Government is determined to turn this around.

In a discussion paper released in June, it details plans for a phased-in approach, with intially a 2% ethanol-blended petrol option. The government also considers to include an ethanol-blended biodiesel option.

At present, the Queensland biofuel industry is based on sugarcane (molasses) and grain (sorghum, with two operating ethanol plants having a combined capacity of 140 megalitres per year. Three ethanol plants are proposed which could lift production capacity by a further 230-290 megalitres of fuel grade ethanol. There is also one biodiesel factory, which uses tallow and used cooking oil to produce around 30 megalitres of biodiesel per year.

The potential value of the industry for Queensland is significant. A joint study by Deloitte Access Economics and the Queensland University of Technology projected that bio-refining in all its forms could contribute more than $1.8 billion in gross state product to the state.

Radiating approval

The area containing the Kintyre deposit was in fact excised from the National Park in 1994, while compensatory land was added to the park. The former state government's decision was based on the Kintyre deposit being entirely outside of the Rudall River watershed, and that ecosystems involved are well represented elsewhere in the national park.

But even with the substantial conditions attached to the environmental approvals, opponents remain unconvinced. Their concerns include the long-term radiation of the ore, but also the risks associated with the mine's activities for ground water, permanent water holes, ephemeral rivers and salt lakes in the region. They also point to the risks associated with the transport of the mine's products to South Australia's port in Port Augusta.

However, industry stakeholders, backed by the Western Australian government, are determined to capitalise on the continued growth of nuclear power generation worldwide (see insert). Through its firm support for the industry, the state government also hopes to gain a competitive edge over other states led by government's less committed to exploiting their uranium potential. Just a year ago the former Queensland Government lifted the state's 32-year ban on uranium mining. According to recent media reports, the new Labor government has plans to go full circle by reversing the decision.

However, this is not yet assured, and it would be in stark contrast to the current pro-uranium stance of the Labor Government in South Australia. There a Royal Commission is about to investigate whether broadening the scope of the nuclear industry could deliver benefits for the state (and according to the Australian Government's 2015 Energy White Paper, the conclusions of the Royal Commission will also feed into the development of a federal nuclear industry policy).

The WA Government lifted the ban on uranium mining in 2008, and has since invested more than $300 million in uranium exploration, with an eye on potentially lucrative growth of demand for uranium in Asia, including India (see insert).

And while the International Energy Agency's 2014 World Energy Outlook still notes an uncertain future for nuclear power (see also insert), WA's uranium mining is gaining momentum with four projects now in the advanced stages of development. They include:

• Kintyre Uranium Project: located in the East Pilbara and owned by a joint venture of Cameco (operator, 70%) and Mitsubishi (30%);
• Yeelirrie Uranium Project: proposed for one of Australia's largest undeveloped uranium deposits in the Northern Goldfields region, the project is owned by Cameco - is yet to obtain environmental approval;
• Wiluna Uranium Project: the most advanced WA uranium project, with owner Toro Energy Limited having received state and federal environmental approval for the mining of two deposits, Centipede and Lake Way, around 30 kilometres south of the mining town of Wiluna; and
• Mulga Rock Uranium Project: located 240 kilometres north-east of Kalgoorlie in the Great Victoria Desert, the project is owned by Vimy Resources and yet to receive environmental approval.

Still riding the waves

The power plant with a capacity of 700 kilowatt took around ten years to build at a cost close to $100 million. Both the Western Australian and Australian Government contributed significantly, with $10 million from the state's Low Emissions Energy Development (LEED) program and $13 million from the Australian Renewable Energy Agency (ARENA).

(Click image to enlarge)- CETO Power and Freshwater technology

So far the news continue to be good. Thus, according to recent company updates, the three installed CETO 5 units have now accumulated more than 7,500 continuous operating hours, during which they had to sustain up to 4 metre high waves. The company was also able to retrieve a unit validating its 'hot swap' maintenance strategy.

Given their strong support of the project, both state and federal government's will be pleased with the progress.

And while Prime Minister Tony Abbott is ostensibly hostile towards renewable energies, his Energy Minister Ian Macfarlane sent a message of praise at the wave project's launch, describing it as "great evidence of a commercial success in renewable energy".

However, with less than 1 megawatt (MW) capacity, the PWEP is not a commercial project. Instead its primary objective is to demonstrate the principle viability of the technology and the gained experience will now feed into a four times bigger plant. While also located off Garden Island, it will employ three next-generation CETO 6 units, which each have a targeted capacity of 1MW.

A major difference to PWEP is that the units will be further out in deeper water, with a power generation system offshore inside a buoy, rather than onshore as with the CETO 5 technology. According to the company, the ability to move into deeper, more distant to shore wave resources increases the size of the commercial market for CETO.

Expected to go on-grid in 2017, this project will put the commercial viability of the technology to the test. The company says, with 3 MW capacity at a capital cost of $25 million it will be three-times cheaper on a dollar per MW basis than the PWEP project.

Again, the Australian Government is heavily involved with a $11 million from ARENA and a five year $20 million loan facility from the Australian Clean Energy Finance Corporation. And the Australian Department of Defence is again sole customer for the produced energy.

The support may be well placed. Thus, Carnegie was recently selected from over 1,500 different sustainable projects for the shortlist 100 of the 2016 Sustainia Award.

And the international reach is growing. The company has established subsidiaries in the UK, Ireland and Chile, and it recently announced a collaboration agreement with Chile's private/public innovation centre Fundacion Chile for potential wave energy projects in Chile and Peru.

Thrilling drilling in SA

South Australia has not given up on the dream the state could one day match WA's mining success - despite major setbacks, such as in 2012 the disappointment with BHP's decision not to risk an Olympic Dam expansion.

Click image to enlarge a map with funded project locations

In pursuit of kick-starting a mining boom in the state, the SA government set up a Plan for Acclerating Exploration (PACE) in 2004, which successfully spurred investment and was built upon in 2010, with the launch of a broadened scheme, PACE2020.

Since 2013, it includes the PACE Frontiers initiative, which aims to reduce the high investment risk associated with new exploration projects in South Australia.

Funded with a total of $8 million until 2018, PACE Frontiers also provides direct financial support for frontier exploration projects, such as through the PACE Discovery Drilling 2015 program.

While this program targets new exploration projects across South Australia, a complementary PACE Mineral Systems Drilling program focusses on projects in the Gawler Craton, a region covering almost half a million square kilometres of the state's centre. It includes the highly prospective Eastern Gawler Craton Olympic Domain, a region of high investment risk because of the deep cover (overburden) that overlays potential resource - and the Western Gawler Craton-Eucla Basin, one of Australia's greatest yet largely unexplored geological frontiers.

Budgeted statesmanship

A $24 million over four years investment into exploration and mining development underpins the government's declared "unflinching" support for the mining sector. It includes improvements in geoscience information services, such as a comprehensive three dimensional geological model of the state, and a renewed commitment to the relocation of Mineral Resources Tasmania (MRT) from Hobart to Burnie, Tasmania's port city on the state's north west-coast.

Burnie's economic health is tied to the state of its forestry industry and to mining. Most of Tasmania's mining activity takes place in the state's west coast, with mining products then shipped out from Burnie. With the region's forestry industry in a downturn and unemployment rates among the highest in the state, the government hopes to stimulate mining through the closer proximity of the MRT and its around 40 staff members to the industrial activity - a belief that is not shared by the state's opposition.

While giving this message of support for the region's struggling economy, the government confirmed that there will be no further funding for Forestry Tasmania. The state-owned enterprise, which relies on the exploits from around 800,000 hectares of public production forest, has been running at a loss for years and after it reported an after tax loss of $43.1 million for the year 2013-14, Forestry Tasmania's survival is now under serious threat.

It has been questioned, though, why the enterprise is in so much trouble, having repeatedly been bailed out by the Tasmanian taxpayer in the past. Thus, the Independent Member for Denison, Andrew Wilkie, recently called for a Royal Commission into the financial dealings of the business.

The state government has indicated that for Forestry Tasmania to enter a path of long-term sustainability its operations will need to be downsized, and this was followed by the ABC reporting in May that staff at Forestry Tasmania's Camdale and Smithton operations in the state's north-west have already been invited to apply for voluntary redundancies.

The budget papers highlight how much of the state's wellbeing depends not only on mining royalty income generally, but in fact on one commodity: iron ore, which contributed 57% of Western Australia's total mineral sales value in 2014-15.

Mining royalty income accounts for around 14% of total government revenue, but is expected to decline by 17.3% as lower iron ore prices on world markets outweigh the state's increases in ore production.

Even the depreciation of the Australian dollar against the US dollar won't save the day for WA, while lower prices for liquid natural gas and oil add to the government's finanical pain.

It is unsurprising that the government continues to lament the low share it receives from the national GST revenue. Based on recommendations by the Commonwealth Grants Commission the state will get just 30% of its population share of the national GST grant pool in 2015-16.

Despite the financial constraints the WA Government is now under, there are some noteworthy initiatives in the 2015-16 budget. They include:

• $21.6 million over five years in new funding for the Pawsey Supercomputing Centre will support a variety of scientific research disciplines requiring high-level computational, visual and data management resources, such as Australia's participation in the Square Kilometre Project (SKA).
• $44 million in 2015-16 for Australia's first full scale groundwater replenishment scheme, the construction of which started in October 2014. The new scheme is to replenish an aquifer with wastewater treated to drinking water quality. In total the project is estimated to cost around $124.6 million and will supply up to 20% of Perth's drinking water needs.

Specific funding initiatives also include the $20 million Boosting Grains and Research Development and the $15 million Northern Beef Futures project. These projects are part of a larger $300 million Seizing the Opportunity Agriculture program, which is supported by the State Government's Royalties for Regions program and comprises 15 individual projects.

The key figures in the first budget of Victoria's new government include a projected operating surplus of $1.2 billion (a cumulative surplus of $5.8 billion is estimated for the forward estimates period), which is forcast to reduce government debt to 4.4% of gross state product in 2015-16.

Victoria's economic growth is expected to improve to 2.5% in 2015-16.

While this implies favourable conditions, the state is still challenged by relatively high unemployment of 6.25% forecast for 2015-16. Hence, the government's declared focus is on job creation.

As part of the initiative and as promised in the election, the government has earmarked $60 million for the establishment of a 'start-up' initiative. It will assist entrepreneurs with their business cases, intellectual property and financial management, and their dealings with governments, with the broader objective to take the state's best ideas "from conception to completion, from mind to market" (Premier Andrews).

• Medical technology and pharmaceuticals;
• New energy technology;
• Food and fibre processing;
• Transport, defence and construction technology;
• International education; and
• Professional services.

The assistance will cover expenditures that are not 'business as usual' and can deliver benefits to the company/companies or the state/region. The money provided will be on a co-contribution basis, with up to $500,000 for projects by single companies and up to $1 million for collaborative projects.

To support businesses targeting overseas markets the budget is providing $6 million for the establishment of Victorian Government Business Offices in South America, Singapore and Turkey. There also $12 million set aside for an inbound trade mission program aimed at attracting international investors to the state.

But while the budget supports the sector with a total of $202 million over the forward estimates, most of the money is set aside for existing art infrastructure and state-owned cultural assets, such as $55 million towards the redevelopment of the State Library.

There are also $26.5 million allocated for small to medium arts and cultural organisations, education, youth and multicultural arts programs, and there will be $20 million for regional arts and creativity funds.

Notably absent, though, are initiatives targeting areas with a high capacity for driving innovation, such as design, including industry design, and IT, software and computer services.

Basking energy

27 March 2015 - The largest solar photovoltaic (PV) research facility in the southern hemisphere was officially launched at the Gatton campus of the University of Queensland (UQ).

Arial view of the Gatton research facility

Image source: University of Queensland

With 37,000 thin-film photovoltaic panels from American company First Solar and a capacity of around 3.3 megawatt (MW), it indeed boasts the state's largest solar array, and for the univsersity it is adding to its 1.22 MW solar roof top system at St Lucia, also the largest of its kind in Australia.

The Gatton facility features another superlative: for the first time in Australia multiple PV mounting technologies including fixed-tilt, single-axis and dual-axis tracker technologies can be operated side-by-side in the same field and inform electrical and economic performance.

Researchers will be able to investigate the efficient integration of solar energy generated from large scale solar systems into the electricity grid. With a 600 kilowatt, 760 kilowatt-hour Kookam lithium phosphate ion battery storage array soon to be installed by Mpower they will also be able to study the potential value of short- and medium-term energy storage with batteries.

The Gatton solar research facility is a key component of a $40.7 million grant UQ and its partner, the University of New South Wales, received from the Australian Government's Education Investment Fund (EIF) in 2012.

Location of solar projects in relation to mean annual solar radiation levels

image: solar map of annual radiation levels by CRES, ANU

The grant was primarily meant to establish a pilot plant for two large scale photovoltaic power plants AGL Energy Limited is constructing in New South Wales, at sites in Nyngan and Broken Hill.

With a combined capacity of 159MW, it is to date Australia's largest solar project, and estimated to cost well over $450 million. The project was selected for funding under the previous Solar Flagships program and is supported to the tune of $166.7 million through the Australian Renewable Energy Agency (ARENA). A further $64.9 million contributed by the New South Wales Government.

According to a company statement in May, the 102MW Nyngan Solar Plant is on track to be fully operational by July this year, while at its 53MW Broken Hill plant the first solar PV modules from project partner First Solar are now installed.

Manufactured dreaming

South Australia's manufacturing industry has fallen on hard times, but the state government hopes for a phoenix like rise from the ashes in the form of a high-value goods exporting industry. Its defiant 'yes, we can - even in SA' attitude towards the idea of an advanced manufacturing industry in the state was also encouraged by Adelaide's former Thinker in Residence Professor Göran Roos, who canvassed a future of opportunity for exporters of high value-added products in the state.

The vision draws from the success of others, including countries in the European manufacturing belt - Germany, Switzerland, Sweden, Finland, Austria, Denmark and the Netherlands. Indeed, these countries recovered much better from the Global Financial Crisis than other advanced economies without a strong high-value manufacturing base.

Image of the Tonsley construction site (top) and an artists impression of the site at completion.

image provided by The Lead South Australia

The state's Manufacturing and Innovation Minister Susan Close recently remarked that Germany's Industrie 4.0 initiative, "a major driving force behind a transformation of Germany's manufacturing sector", could be a model for transforming the industry in South Australia.

Of course, this largely ignores the significant historical differences between the two economies, with Germany having a long tradition of producing high-value technological products going back a century and more.

Still, the determination for a remake of the SA's manufacturing sector is conjuring possible paths to make utopia become reality.

An example for this is the transformation of an abandoned vehicle manufacturing plant to a collaborative education, university research and industry precinct just a short bike ride away form Adelaide's CBD.

Adelaide's Flinders University has been a major driver in the Tonsley Park development, also because of its proximity with its main campus being just a few kilometres further out of the city - for once, it seems, the young university at the southern outskirts of the capital finds itself right in the epicentre of development.

Flinders has invested $120 million in establishing its new Tonsley campus, where it will co-locate the School of Computer Science, Engineering and Mathematics with its Medical Device Research Institute and the Centre for Nanoscale Science and Technology. It will also have there its commercialisation agent, Flinders Partners and its New Venture Institute, which connects the university to business and entrepreneurs.

The initiative was welcomed by the federal Industry and Science Minister Ian MacFarlane, who said at the opening that the new facility was an illustration of both the changing nature of global manufacturing, as well as the opportunities for growth in Australian jobs and industries.

There is also the aura of a global player, which was brought in with the Australian arm of German firm Siemens. The company is currently constructing a Turbomachinery Services Workshop at Tonsley.

Other players found on site are still more local, including medical technology firm Hills Industries, medical device company Signostics, innovative data service provider Tier5, and smart energy company ZEN Energy Systems.

In May, Innovyz, which is mentoring upcoming entrepreneurs, opened its new offices at Tonsley. The company has so far assisted more than 40 companies in raising committed funds of close to $20 million. Alongside Innovyz, the nations peak body for the simulation community, Simulation Australasia, relocated to the new precinct further broadening the spectrum of represented technologies now including mining and resources, clean technology and renewable energy, medical devices, and software and simulation.

Stately aid

November 2015 - Following the closure of car manufacturing plants in Victoria and South Australia, federal and state governments implemented assistance programs designed to milden the economic and social impact on the states and to set their manufacturing businesses onto a more sustainable path (see also our story 'Eternal transition').

Recent investments include government assistance for Victorian businesses under the Geelong Region Innovation and Investment Fund (GRIIF) and the Next Generation Manufacturing Investment Program (NGMIP).

Announced in November, the new rounds of grants together worth $39 million are expected to leverage around $120 million in total investment.

The first round of the NGMIP also delivered for South Australia, with 15 companies in the State receiving grants together worth $28.8 million, potentially resulting in $73 million in total investment in high value manufacturing projects.

A further $5 million was then contributed by Alcoa in 2014, following its decision to close the Port Henry aluminium smelter.

In its third round the GRIIF delivered grants totalling $11.2 million, with three of the seven successful projects accounting for almost all of the available funding ($9.8 million):

• Air Radiators - $3.3 million for the establishment of a purpose build facility to manufacture large, industrial aluminium heat exchangers;
• Associated Kiln Driers Pty Ltd t/a AKD Softwoods - $3.5 million for the installation of the latest sawmilling technology and an upgrade of the company's dry mill; and
• M.C. Herd Proprietary Limited - $3.0 million for the construction and commissioning of a semi-automated stock cutting room for meat products.

Previous rounds of the scheme have provided $17 million, with major recipients including Australian Lamb Pty Ltd; Cotton On Clothing Pty Ltd and carbon fibre wheel producer Carbon Revolution Pty Ltd.

The provided assistance for Victoria's high value manufacturing industry is estimated to leverage $75 million in total investment, with successful project including:

• HeiQ Australia Pty Ltd - $1.26 million for establishing an industrial scale manufacturing facility for short polymer fibre (SPF) materials;
• Marand Precision Engineering Pty Ltd - $5.0 million to expand its capacity to manufacture and assemble vertical tails for the Joint Strike Fighter F35;
• Bombardier Transportation Australia Pty Ltd - $3.2 million to expand its rail vehicle manufacturing capacity and capability at its site in Dandenong;
• Reinforced Concrete Pipes Australia (Vic) Pty Ltd - $2.61 million for the first Australian deployment of innovative new generation dry cast technology; and
• Turrisi Enterprises Pty Ltd - $1.58 million for an advanced caravan chassis and suspension manufacturing facility at Campbellfield Victoria.

Successful applications from South Australian companies include:

• Ahrens Group Pty Ltd (SA) - $3.00 million for the establishment a flat bottom silo manufacturing operation in South Australia;
• Levett Engineering Pty Ltd - $1.6 million including for expanding high value manufacturing capacity to meet existing contracts for components of the F35 Joint Strike Fighter;
• SA Structural Pty Ltd - $1.26 million for the installation and commissioning of a copying machine to cut steel using the dual thermal processes of high definition plasma, where extreme precision & quality finish is required;
• Seeley International Pty Ltd $4.95 million for the establishment of the high volume Climate Wizard heat exchanger and cooler production facility.
• Mexican Express Pty Ltd - $1.65 million for commissioning the first aseptic horizontally formed, filled and sealed facility in Australia;
• Mayne Pharma International Pty Ltd - $4.0 million to increase the existing capacity of its spray coating facility with the purchase of a new fluid bed spray coater, which will be used to apply coatings to medicine; and
• BAE Systems Australia Limited - $2,48 million to establish a complex mill turn capability in hard metals and expand high-value manufacturing activities to encompass engine components for the Joint Strike Fighter.

Logging into the future

Australia's forest and wood products industry recognises that it needs to shift its focus away from traditional markets towards new emerging opportunities, including a growing bio-economy.

The use of timber is again in fashion as a sustainable construction material. For example, Australia has recently followed international trends with a change in its National Construction Code, which will now allow timber to be used in the construction of buildings up to eight storeys high - the previous limit was up to three storeys.

New materials are also finding a way into the supply chain, such as cross laminated timber and Glulam, which is manufactured by bonding together smaller pieces of timber using durable durable, moisture-resistant structural adhesives.

But while this presents new opportunities, businesses in the sector face the challenge of integrating and managing a supply chain that is becoming more complex.

There is also a need for greater sophistication in how the industry specifies wood for architectural and engineering purposes.

Officially opened in January, the new ARC centre will support this transition, with its main focus being directed on training a highly qualified workforce, including industry-ready higher degree by research graduates and postdoctoral fellows.

It will also establish innovative processes the industry can use to assess the characteristics of forest resources and to then pass these along the supply chain to their final application, for example in a commercial building.

Weedy bits

December 2015 - The Australian and Queensland Government's have announced $15 million worth of projects to combat the impacts of pests and weeds on the state's farming industry.

Agricultural Minister Barnaby Joyce said in a statement that major pests are estimated to cost the Australian agricultural industries $740 million each year in livestock losses, and weed management has been estimated to cost Australian farmers more than $3 billion each year.

The funded projects will take a multi-pronged approach, undertaking a range of activities such as cluster fencing, baiting and trapping, and weed management of the key pest plant prickly acacia.

The successful applicants are:

• Southern Downs Regional Council;
• South West NRM Ltd;
• Goondiwindi Regional Council;
• Maranoa Regional Council;
• Quilpie Shire Council;
• Central Western Queensland Remote Area Planning and Development Board; and
• Desert Channels Queensland.