Chapter Synopses

Introduction

Bibliography

Preliminary

Appendices

Chapter 2: The Extended Wear Contact Lens Project

Dr Adrian Hunter, Head of R&D at Ciba Vision, led the development of the Extended Wear Contact Lens as a joint project of Ciba Vision, Novartis Central laboratories, CSIRO and the CRC for Vision. The lens was regarded as the ‘holy grail’ of optometry: a contact lens that could be left on the eye for 30 days without removal, and without causing redness, swelling or irritation. These lenses have very high oxygen transmissibility and do not stick to the eye. This ensures the eye receives adequate oxygen while the wearer is asleep, when closed eyelids, reduced tear flow and reduced eye movement inhibit oxygen flow. This chapter is an overview of the project.

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Chapter 3: GBC Scientific Equipment

GBC Scientific Equipment was founded in 1978 to manufacture Atomic Absorption Spectrometers (AAS)—devices that use the absorption of light to measure the concentration of a particular metal within a sample. Founded on little more than three colleagues’ shared belief in the viability of the technology, and the recognition of a clear position in the market, GBC survived early financial trouble and ongoing internecine struggles to become a major player in the global market for atomic analysis instruments. Despite institutional barriers that inhibit its exports, GBC continues to operate as a manufacturer, designer and exporter of high-technology scientific instruments.

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Chapter 4: Compumedics

Compumedics supplies to a global market advanced devices for diagnosing sleep-related conditions. Founders David Burton and John Murray devised the first system to digitally capture data, store it and conduct a preliminary analysis of data from sleep apnoea patients, obviating doctors’ reliance on analogue chart recorders. Burton and Murray’s first system was installed at Melbourne’s Epworth Medical Centre in 1988 and proved to be a huge success. Subsequently, Burton shrunk the system, made it portable and began to look overseas for further commercial opportunities. This chapter presents the history of the development of Compumedics and its expansion into the global sleep disorders market.

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Chapter 5: The Falcon™ Gravity Gradiometer Project

The Falcon™ Gravity Gradiometer detects gravity anomalies: differences in the size of the gravitational force between two locations. It can be used to map mineral and hydrocarbon deposits. Falcon is the result of a 10-year, US$30 million collaborative development project conducted by BHP Billiton and Lockheed Martin, and has been hailed as the most significant development for fifty years in mining exploration, promising enormous savings in time and cost for exploration geophysics. BHP Billiton’s innovative and collaborative approach to the development of Falcon resulted in a world-leading technology, which far exceeds industry expectations and provides BHP Billiton with a massive lead in the exploration of mineral deposits.

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Chapter 6: Ausmelt

Ausmelt develops technology for use in the mining and metallurgy industries. It was originally incorporated to commercialise the top submerged lance smelter, developed by company founder Dr John Floyd in the late 1960s and refined over the next decade. The smelter used an upright cylindrical smelting bath with a vertical submerged lance through which gases were applied to the ore. Floyd’s approach was faster, contained the reaction better, produced higher quality reaction products and could deal with more difficult ore bodies than traditional techniques. While the company’s technology is seen as one of the most important innovations in metallurgy in the past fifty years, the company has been, at best, moderately successful commercially.

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Chapter 7: Computershare

Computershare, the largest operator of share registries in the world, started as a partnership between Chris Morris ands Ken Milner in 1978. The company was established to provide specialist computer bureau services to Australian share registrars. It subsequently expanded internationally; first by buying and operating registry management organisations, and then by enhancing the services it offered to the companies whose registries it managed. Its technology and services are at the forefront of the global industry, and Computershare supports over 100 million share-holder accounts globally.

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Chapter 8: The VESDA™ Device

The VESDA™ smoke detector works by continually drawing air into a pipe network and then into a laser detection chamber. Developed by Melbourne-based company IEI Pty Ltd, VESDA smoke detectors are significantly more sensitive than traditional smoke detectors, and so are used extensively in applications where very early detection of fires is valued—such as in computer centres, art galleries and high-technology manufacturing. This chapter traces the detectors, from their origins in bushfire research at the CSIRO through their development at IEI Pty Ltd, and the acquisition and eventual sale of that company by Vision Systems.

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Chapter 9: Proteome Systems

Proteome Systems is a listed Australian biotechnology company, founded in 1999. By 2003, Proteome Systems was the largest privately held Biotechnology Company in Australia, and had developed a range of products that spanned the length of protein analysis. The company sold Proteomic analysis platforms, the component instruments within the platform, and consumables. It also had a host of drug discovery and diagnostics programs in niche disease areas, provided consulting services and had partnerships with major international companies. Apart from a small sales presence near Boston, all of the company’s operations were located in Sydney. This chapter discusses the history of the company up to its listing on the stock market.

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Chapter 10: Micronisers

Nanotechnology is an emerging family of technologies enabling the manipulation of matter at the atomic level. Nanotech devices are so small they are almost impossible to conceive—the nanometer (nm) measures just one billionth of a metre (10–9 m). Micronisers Pty Ltd, an independent nanotechnology company located in Melbourne, has been developing and commercialising nano-sized particles since 1987, and specialises in advanced milling and chemical processes to produce products at the molecular level: nano-sized and sub-micron particles for use in the plastics, personal care, textile, coatings, veterinarian and pharmaceutical industries.

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Chapter 11: Kinacia

Researchers at Monash University ascertained that blood clots with different mechanisms in constricted arteries and at wound sites. Kinacia sought to develop drugs that would prevent the formation of clots in arteries—a major source of heart attacks and strokes—while not exposing patients to the increased general risk of haemorrhage associated with existing anti-clotting drugs such as Warfarin™. Although Kinacia was successful in developing several high-potential drug candidates, the business failed. The IP was eventually sold to Astra Zeneca at a deep discount to the money invested. This chapter documents the company’s life up to the decision to suspend a clinical trial.

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Chapter 12: International Catamaran

International Catamaran (Incat) created a new category of ships—lightweight, high-speed catamarans propelled by water jets rather than propellers. The boats are large, fast and highly manoeuvrable. They can enter a port, unload and reload and leave again in twelve minutes. The Hobart-based company has built more than 40 per cent of the world’s vehicle and passenger ferries more than 70 metres in length. Incat grew at a tremendous rate until the severe downturn in tourism and travel following the terror attacks on 11 September 2001 left it with excess inventory and reduced prospects. It traded through receivership and the loss of about 75 per cent of its staff to return to approximately its former size.

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Chapter 13: Analysis

This chapter draws together the eleven cases examined in the previous chapters, and presents arguments about the management issues across them. It finds that there are a number of issues endogenous to the companies, but that many of these are driven, in large measure, by issues outside the company, such as the behaviour of directors and financiers.

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Chapter 14: A Venture Capital Perspective

Malcolm Thornton draws on his experience as a venture capitalist to amplify and extend the key findings from the cases in the book in four areas: technology versus market orientation, the Australian market, risk management, and internationalisation. He argues that the firms analysed here had difficulty addressing both a market and a technological need simultaneously, and that they tended to be excessively technology-focused; that the Australian market is concentrated and easily accessible, but that its geographical isolation presents problems to a globally focussed venture; that a high level of capital risk can deter investment in Australian start-ups; and that the challenges of internationalisation can end up dominating a company, often marginalising the Australian operation.

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Chapter 15: The Innovation Challenge for Australian Business

Rowan Gimore notes that the pathologies associated with poor innovation observed in the case studies presented in the book are consistent with his experience, and places particular emphasis on poor market orientations and poor innovation governance. He then makes suggestions as to how these issues might be resolved. He sees an important role for deliberate government policies to create value chains—ensuring that the full set of requisite and complementary inputs for emerging industries are available in the market. He also argues that governments should have programs to strengthen companies. Finally, he argues that Australian companies should be encouraged to engage in more collaboration in their innovation activities.

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Chapter 16: Australian Innovation Issues

George Pappas argues that Australia faces a long-term risk by not having a rate of industry creation through innovation to match its international peers, for two reasons. First, resource booms do not last forever. Second, despite the resource boom, it still has a high trade deficit. He asks whether we can do something about it. His answer is 'probably yes'—but that it will require a fundamental change in the risk tolerance for innovative businesses from Australia's largest companies and investment institutions.

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Chapter 17: The Puzzle of Innovation in Australia

The orthodox view is that modern successful economies are built on innovation. Ian Heath explores whether, given the success of Australia’s economy over the past few decades and our relatively modest innovation achievements as measured by patenting, we should broaden our understanding of innovation. It is suggested that in Australia our economic success seems to be built on broader types of business innovation, particularly in the services sector. This sort of business innovation is generally excluded from the classic proxy measures for innovation (patenting), but does seems to be clearly reflected in trademark databases. While the case studies in the book fit the more classic technological improvement and patenting paradigm, they also illustrate that success is often linked more with business approaches to marketing and markets than just technological innovation.

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Chapter 18: Questioning 'Innovation Policy' Orthodoxy

Evan Thornley argues that if governments are going to intervene directly to help innovative ventures, it can work to increase the number of new ventures created, try to ensure new ventures have the right skills and resources, and demolish pernicious barriers. More important, however, are the things it can do indirectly. In particular he emphasises that governments can stimulate the private sector by maximising competition, pricing externalities, reducing and correctly pricing adverse risk and maximising information flows. Furthermore, governments can do a number of things in their core operations to stimulate innovation.

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Chapter 19: Towards an Agenda for Australian High-Technology Innovation

This chapter summarises the arguments in the analysis chapter and the commentaries, and draws them together to make four suggestions for improvement of the innovation performance of Australian companies: the provision of high-quality training, reconceptualising and focusing on the way corporate-level and board-level governance of innovation occurs, the creation of new vehicles that will improve risk management, and addressing a widespread aversion to believing that we are capable of acting on a world stage.

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