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2. Year in Review
Chair's Report
RIRDC is about innovation and its implementation in its diverse stakeholder industries. With this diversity there is no single approach which suits everyone. Our industry specific committees continue to be the key to ensuring that our investments are focusing on longer term industry needs.RIRDC’s role is to assist diverse rural industries face the challenges of producing for a global market place. Challenges facing our industries this year have ranged from an outbreak of Newcastle disease affecting the chicken meat and egg industries to the continuing effects of the Asian crisis. The long term challenge for all industries is to produce more sustainably in a fragile landscape.
Current projects cover a broad spectrum
Our investment portfolio is extensive - from specialist technical research developing vaccines and sophisticated diagnostic tools to market oriented research on trade issues relating to the millenium round of WTO negotiations and research seeking new markets and new products for Australian and international consumers.
The Joint Venture Agroforestry Program (with LWRRDC and FWPRDC) is now fully operational and we are investigating opportunities to work in collaboration with other agencies to address the problems of dryland salinity. RIRDC continues to support activities assisting producers to utilise electronic communication and to build leadership and learning capacities, and supports rural communities in issues such as health and safety.
Our strategy is to work closely with our industry partners
RIRDC Advisory Committees with predominantly industry members guide R&D investment decisions related to programs or specialist areas within programs. We rely on the contribution of these committees to identify opportunities for future development. Their success, and the effectiveness of the management and staff of RIRDC, is reflected in excellent results recorded in a survey of RIRDC stakeholders. These results, in combination with those from previous surveys, suggest a steady improvement to a high level of satisfaction of key clients.
Building on previous successesThe goal of RIRDC's Board is to build on the success achieved to date. Major Board activities have focused on three areas – our strategic directions, our communication and commercialisation strategies, and our accountability. Stimulated by a Board trip visiting new industry projects in Tasmania, we have begun a process to review the strategic directions of our activities in support of new and emerging industries.
RIRDC’s new communication strategy is designed to target the outcomes of projects and programs to the specific relevant audiences. Communication activities have been repositioned from a corporate activity to an activity within each program. Sales of the publications and products arising from funded projects are increasing and these items are now available for electronic purchase.
A new commercialisation strategy has been developed and a three party contract has been designed to encourage commercial partners to become involved in research activities with RIRDC and research providers.
In relation to accountability, the Board has worked through new requirements under the Commonwealth Authorities and Companies Act 1997 legislation and the guidelines for the report of operations. We have also aimed to ensure that opportunities are taken for collaboration with other rural R&D corporations, and RIRDC seeks synergies with government programs such as Supermarket to Asia.
Valuable contributions by people
RIRDC depends on the contribution of excellent people.
Several Board members reached the end of their terms in June 1999. I would like to thank Dr Martin Barbetti, Mr Sam Catalano, Mr Peter Chapman and Ms Jan Davis for their valuable contribution to RIRDC’s development.
I would also like to acknowledge the contribution of Graham Kleinschmidt who has completed a long and valuable period as Research Manager for the Honeybee sub-program. David Evans, who retired as a full-time Research Manager, continues to work with RIRDC in contract roles for the New Plant Products and Wildflowers sub-programs.
Looking to new possibilities
The RIRDC Board has been considering how we can foster creativity and innovation within our programs. We take seriously RIRDC’s role to look beyond the horizon to new possibilities. It is clear to us, as it is to our rural stakeholders, that the future cannot be built on doing “more of the same”. Finding new opportunities and identifying where they fit is how RIRDC can contribute to a more profitable, dynamic and sustainable rural sector.
Professor Beth Woods
Chair
Managing Director's Report
The Corporation performed strongly in 1998/99 but there is room for further improvement. More than three quarters of our surveyed stakeholders judge our overall performance as good or excellent. Between 1995 and 1999, those judging our performance as excellent doubled.The Corporation has the widest industry coverage of any research and development corporation in our Minister's portfolio. This is reflected in the Annual Report. Not only does it account in a meaningful way for our investments in the equine, rice and wildflower sub-programs - to name three of more than 20 - but this diversity also reflects the way we do business.
Serving IndustryIn 1998/99 , we continued to strengthen linkages with our specific industries to ensure that investment priorities were driven by industry needs – both short and long term. Our management team worked continuously to develop the partnerships between the research provider and these industry priorities.
Our system of industry advisory committees is central to our operation as is the separate financial reporting provided for each of our contributor industries.
During 1998/99, the Corporation team and its industry partners finalised the strategic planning frameworks for a number of sub-programs. We are now at a point where nearly all of our sub-program areas have their own planning framework, which spell out their investment priorities.
Our investment portfolio covered more than 600 contracted projects in 1998/99 with annual outlays of around $22 million. We provide the stewardship for these stakeholder funds and make no excuse for requiring research providers to adhere to their contractual obligations.
A central element of these contractual obligations is reporting outcomes. All of our portfolio investments are now supported by annual progress reports or final reports, most of which are accessible on our website. Just as important, is the transparent network that enables industry and key stakeholders to get in contact with the prime research provider.
Serving the BoardThe Board performs vital compliance and performance roles and, in 1998/99, the management team continued to ensure that all our operations were transparent and accountable. As the Board’s chief executive, the managing director put additional effort into ensuring that the compliance requirements of the new Commonwealth Authorities and Companies Act 1997 were met.
This compliance agenda was a key focus in 1998/99 and, in the period ahead, the management team will redouble its efforts to support the Board in its strategic performance agenda.
Surfing our WebsiteDuring 1998/99, the Corporation oversighted more than 600 projects across 21 program areas. Short summaries of each of these projects (current and completed ones as at 30 June 1999) are available in both hardcopy and on our Website at www.rirdc.gov.au/comp99/contents.html
This end of year project level stocktake is now in its second year and not only provides operational transparency but also provides an essential key contacts roadmap for those wanting to take 'next steps'.
Our Website also holds free downloadable copies of nearly all the final reports received in 1998/99. (see www.rirdc.gov.au/reports/Index.htm
What about the Payoff?
Returns on the research dollar are not easy to measure. But we have worked with our counterpart Corporation for the grains industry – the Grains Research and Development Corporation – to finalise an evaluation framework which we are now using for our portfolio.
We have a rolling four-year evaluation program covering our four principal program areas. This evaluation has been done at arms length (by the Centre for International Economics) and, in 1998/99, Program 3 ‘Established Industries’ was covered. The Corporation has published two reports which provide details of these evaluation results.
Of the 14 projects taken for detailed evaluation, the results showed that all but two projects were found to have rates of return in excess of our Five Year Strategic Plan performance target of 25 per cent. Examples of rates of return of more than 100 per cent were lucerne hay management technology extension, rice harvester efficiency research and research on diets for moulted laying hens.
Research is inherently risky so it is unrealistic to expect all our investments to produce payoffs. And to pursue low risk research investments may simply lead to low payoffs. Also, the process of innovation — actually putting ideas to work — is highly complex and involves many variables over which we have little or no influence. Some major variables that influence innovation are summarised in the chart below.
Education, business culture, attitudes to risk taking and availability of venture capital as well as intellectual property and a competitive environment are all important, along with research and development if successful innovation is to occur. While the Corporation has little influence over these variables, wider appreciation of their importance is more likely to foster a higher level of innovation and hence payoff.
The Innovation Cycle
A wide appreciation of the innovation process and posing the question ‘What is the payoff?’ are important elements of research management. A good example of this is research that led to the award-winning new rice variety released in April 1999 that was developed specifically for the high quality Japanese market.
In this case, the Corporation’s management team was able to focus the research providers on a specific industry problem that had a commercial payoff. Also, in this case the payoff was high due to the increase in the production possibilities across the whole industry.
Even though research is but part of the innovation process the overall message from our evaluation remains: over the portfolio, a research dollar pays a higher return than mainstream investments.
A Framework for Board OperationsOur Operations
Every second year the Corporation surveys its key stakeholders and clients to monitor performance. The first survey was done in 1995 and the second in 1997. The third survey was completed in May 1999 and the key findings from those surveyed were that our service levels improved again in 1999. In fact, more than 75 per cent of respondents rated our overall performance as excellent or good.
Areas where we still need to improve include the design of our homepage and the integration of our databases to ensure that we can target our research products for maximum payoffs.
The Corporation has published a report, titled Through the Looking Glass, which compiles and presents the results of the three surveys. Phone 02 6272 4819 for a copy.
Excellent Good Satisfactory Poor Yr 95 97 99 95 97 99 95 97 99 95 97 99 % 12 14 24 55 46 57 25 37 16 8 3 3
Percentage of respondents rating RIRDC performance as ‘excellent’ over the three surveys
Y2K Issues
In 1998/99 the Corporation put a heavy focus on the Y2K issues. Our corporate systems have been upgraded and tested in the context of the Board-approved Y2K Compliance Strategy. Not including staff time, we spent $5100 in 1998/99 on this project. While we do not anticipate problems, a disaster recovery plan has been drawn up in accordance with government requirements.Our Y2K Disclosure Statement under the terms of the Year 2000 Information Disclosure Act 1999 is at Appendix 2 .
Our Cost Effectiveness
In an agency like the Rural Industries Research and Development Corporation, the cost effectiveness of our services is always a question that is difficult to answer. It would be easy for us to say that our costs are ‘right’ and point to the investment returns of the portfolio. But benchmarking has its place, particularly in an agency that operates away from competitive pressures and with no clear cut bottom line.
In February 1999, the Corporation joined in a study of four Research and Development Corporations to benchmark our costs. The results showed us as being the lowest cost research manager. Clearly ‘cost’ is not the only parameter. In a real sense, the right level of costs depends on the benefits of the management processes.
While the benefits remain hard to quantify, the Corporation will, in 1999/2000, continue to put pressure on costs to the extent necessary for us to operate in the bottom 25 per cent cost quartile for all Research and Development Corporations.
The Year Ahead We will continue to serve the Board so that it can carry out its governance responsibilities.
We will continue to ensure that industry stakeholders remain pivotal to our strategic directions and individual decisions that support those directions.
As a service provider we will operate as a commercial entity, not an institution. Our headquarters is the hub of a network, not the top of a hierarchy. It will be a rapid response clearing house that delivers.
In signing off this part of the report, I would like to thank the Board for its support and all the staff for their commitment in contributing to our successes in 1998/99. It is the inherent quality of our people that enables us to look confidently to the future as we pursue our corporate vision of a more profitable, dynamic and sustainable rural sector.
Post 1998/99 Developments
New Directors: On 1 July 1999 the Parliamentary Secretary announced some membership changes to the Board. Four Directors retired – Dr Martin Barbetti, Mr Sam Catalano, Mr Peter Chapman and Ms Jan Davis. Four new Directors were appointed for three years from 1 July 1999. They are:
New Minister: On 20 July 1999, the then Minister for Agriculture, Fisheries and Forestry, the Hon. Mark Vaile, MP, was sworn in as the Minister for Trade. The Hon. Warren Truss, MP, was appointed as our new Portfolio Minister on this same date.
- Ms Helen Cameron who brings to the Board commodity production, finance and marketing skills;
- Professor Rob Clark who has an academic background complemented by his ownership of a horticultural enterprise;
- Dr Paul Donaghue who recently retired as Chief Scientist of Orica (formerly ICI); and
- Dr George Gardiner who is the Chairman of the Ord River District Cooperative.
Peter Core
Managing Director
