2002 ANNUAL REPORT - Back to Contents Page

Message from the Chair
As the custodians of taxpayer and industry funds, the Corporation has a special obligation to ensure that our annual investment of around $25 million per annum produces significant returns to those that fund the investments – industry and the broader Australian community.
An investment dollar in research has challenges - high risk, long lead times, uncertain targets. Much of the research funded by RIRDC is undertaken in the public sector - State Departments of Agriculture, Universities and CSIRO - for potential users in the private sector, usually the farming community. RIRDC’s challenge is to encourage a seamless partnership between research activities and their application, because this partnership determines the returns that will be generated by our research investments.
Over the past year the Board has focused on several aspects of maintaining and improving this partnership.
Appointment of a new CEO
A key strategic responsibility of a Board is to appoint and oversee the operation of the chief executive. Early in 2001–02 the Managing Director, Mr Peter Core, signalled that he would leave the Corporation in mid 2002 after serving six years in the position. In seeking a new Managing Director, our goal was to make an appointment who could maintain what we believe to have been existing strengths – the close links between RIRDC and its partners in government, in R&D provider organisations, and in industry. Our new Managing Director, Dr Simon Hearn, comes with long experience of working with rural industries and in government processes, as well as recent experience with RIRDC, and we look forward to the contribution that he will make to the corporation’s partnerships when he takes up duty in July 2002.
Guiding principles for commercialisation
RIRDC has supported adoption of research outputs through working very closely with industry, particularly at the start of the process when projects are selected and at the end via a strong communications effort. In 2001–02 the Board challenged Corporation managers to form a greater focus on commercialisation within its strategies to support adoption.
The Board’s aim was not listing IP rights on a register (although we do now have a register). It was to take advantage where possible of the profit motive inherent in the commercialisation process, to reinforce RIRDC’s initial R&D investment and foster adoption. An active interest in commercialisation possibilities is particularly important because the research process in Australia is so often in the public sector.
To assist the Corporation's management, the Board drew up a set of principles to foster commercialisation pathways in RIRDC operations (see box). For each and every funding proposal, a potential adoption pathway needs to be articulated. Where that is likely to involve IP commercialisation, appropriate arrangements have to be put in place to ensure that the research outputs are able to be protected.
This rebalancing of our adoption pathways - the first steps of which we took in 2001–02 - will challenge our thinking, but it is vital that we continue to develop our management processes in relation to industry change and growth if we are to strengthen returns on our investments.
Developing R&D priorities
RIRDC’s priorities have been guided by our industry partners, by the views of our Portfolio Minister, and through the input of senior managers. The Board provides the strategic overview on priorities as one of the prime functions in our governance framework. A new five year plan for 2002–2007 has been released.
The Federal Government has signalled that it wants more focus in its research investment. First steps have been taken in the Australian Research Council; the Government’s Chief Scientist in consultation with key stakeholders is now developing further steps. During 2002–03, I expect that Government decisions will give greater clarity to the research priorities of public sector investments. This Corporation will need to review its alignment with those directions, in consultation with the Portfolio Minister and our industry partners. I draw your attention to the possibility that this process, along with the opportunity to incorporate the views of newly joined Board members, may lead to early revision of our recently released five year plan.
Supporting the contribution of Industry Advisory Committees
RIRDC has been well served by Industry Advisory Committees whose members play a key role in identifying R&D priorities, selecting projects, overseeing their outcomes, and communicating with the relevant industry about the R&D program. In 2001–02 the Board initiated meetings with the Chairs of the Advisory Committees to better integrate our efforts as new RIRDC policies (such as commercialisation) and new priorities (including the Federal Government’s R&D priorities) emerge.
The Board – a value adder
RIRDC has a performance culture across the agency and, in the 2001–02, we put in place a reporting framework for the Board itself. The framework has three dimensions captured in agreed templates, and implemented through a process of confidential feedback to the Chair. Firstly, we review the operations of the Board against identified performance indicators. Secondly, each director assesses the performance of each fellow director. And thirdly, each director self assesses their own performance.
All directors accepted the spirit in which the exercise was undertaken - that all parts of RIRDC must value add. With the framework now in place, we will continue to finetune our performance systems. I expect undertaking the review in the later part of 2002–03 will be an important step in developing the capacity of the new Board.
Handling change : a new Board and a new CEO
RIRDC achieved much in 2001–02; this Annual Report is testament to Corporation’s efforts. But 2001–02 had other challenges that I hope were nearly invisible to our industry partners, research providers and clients. As previously mentioned, we were seeking a new managing director. In addition, we were aware that significant changes to the membership of the Board were likely after June 2002.
I am immensely proud of the way the Corporation has handled this transition period. It demonstrates its strong foundations. We start 2002–03 with a majority of new Board members and a new Managing Director, but with confidence that change will bring new insights and better ways of doing things.
For my own part, I will miss the contributions of the outgoing Managing Director and Directors. Peter Core has been outstanding in his leadership within RIRDC and in RIRDC’s relations with its key partners. Our outgoing Board members, John Herbert, Margaret Britz, Paul Donaghue, and George Gardiner, have brought enthusiasm, breadth of insight and essential experience to the RIRDC Board. It has been a real pleasure to work with all of them and to enjoy their friendship.
As Board members we have been fortunate to have a senior management group that understands good governance and works in partnership with the Board on the basis of full transparency and honesty. We have been well served in 2001–02 by the quality and timeliness of their inputs.
I want to thank all the staff of the Corporation for their efforts in 2001–02. As in previous years they have given fully to the task of helping to build a more profitable, dynamic and sustainable rural sector.
Beth Woods
Chair

Commercialisation:
Commercialisation is defined as the exploitation of the various forms of Intellectual Property together with product pricing and other arrangements to achieve utilisation and adoption of research and development.

The Outgoing Managing Director's Report
This is my last report for the Corporation. After six years with the RIRDC team, I left the Corporation on 3 July 2002. So, in that context, I want to use this opportunity to not only focus on our achievements in 2001–02 but also put it in a broader time frame. My successor – Dr Simon Hearn – will also sketch his agenda for the Corporation.
In a real sense, 2001–02 has been a period of transition from a management perspective. Our corporate systems are now mature due largely to our dedicated team. While there was some inevitable staff turnover – three new staff out of a full time staff complement of fifteen – these changes were seamless, partly because we recruited well and, more so, because of the professionalism of all the staff.
Our management agenda for 2001–02 had four strands to it:

supporting the Board in its push for greater clarity in our commercialisation policy and the development and implementation of its performance evaluation framework at the Board level

continuing to maintain a single minded focus on our core business of managing and funding priority research and translating results into practical outcomes for industry development

maintaining our internal management and information systems at ‘best practice’ to support our core business

ensuring that the changeover of Board membership and appointment of the new Managing Director was seamless from an external perspective

On our core business – getting the right priority research done and adopted, 2001–02 was another significant year. Our charter is so broad that any summary listing doesn’t do justice to our efforts. All of our funded outputs are important but in terms of those with broader industry impact they included:

a series of research reports to position Australia and the Cairns Group for the new Trade Round

the development of new environmental management systems for Australian agriculture

an Australian guide to using trees for healthy catchments and productive farms ‘Trees, Water and Salt’

the Re-use Potential of Agri-industry Wastes

the finalisation of the Rural and Regional Guide to E-commerce.
In 2001–02 the Corporation had close to 600 projects under contract and finalised around 200 reports on completed projects. So the above listing is a very small component of our work. The details are in our operational report that follows so I will not dwell here.
But new technologies, new products and new ways of producing them are at the heart of agricultural and regional prosperity. Having been with the Corporation for six years, I am now more convinced than ever that our research portfolio must be not only developed in partnership with industry but have clearly defined adoption pathways built in early. It’s the networks that are vital – from inception to adoption.
It is here that we have a special challenge because nearly all our biological research is done in public sector organisations. That is how it has always been and probably always will be. And while it is, we have a special obligation to foster the public-private pathways and networks. This has been central to the way we have done business and, I hope, how it will continue to be.
At the centre of these pathways and networks, for us, has been the Internet. Over the past six years, I have been privileged to have oversighted the Corporation at a time when the Internet and all its applications have become mainstream to our daily lives. For us, the Web is at the centre of our communications and information systems. www.rirdc.gov.au is now recognised as the first stop point for our latest research and, in 2001–02, we were finally successful in using the Internet as an access vehicle to our project management database for our external managers. In a broader context, it was a small step but one that underlined the inevitability of web enabled technologies going across all corporate systems.
In my view, the Corporation has achieved much but there is much still to be done. New profitable diversification options are essential to rural industries and the innovation ethic that will keep them profitable and enhance their sustainability. And it is now more clearer than ever that our production systems have challenged our environment in areas like land degradation, salinity, and the health of our river systems. We are now only starting to understand the longer-term consequences of what we have done to our rural landscape. RIRDC has a heavy obligation to get it right for the next and subsequent generations.
I want to finish with a special thanks to the RIRDC team. They are a first class group committed to what the Corporation has been set up to do. The CEO is responsible for the Corporation but I would not have wanted to do the job without them. It’s been a real pleasure. Thank you.
Peter Core
Outgoing Managing Director
July 2002

Incoming Managing Director’s Report
As the incoming Managing Director of RIRDC I feel privileged to join a diverse and active team of research managers. RIRDC has a well qualified and experienced team which has worked with a wide range of funding partners and research providers to deliver significant research and development outcomes for its stakeholders.
It is my intention and responsibility to work with the staff and Board of RIRDC to extend and build onto this important performance base to help address the economic, environmental and social requirements and aspirations of rural and regional Australia. This requires well developed and focussed programs and projects for each category of research and development.
The volatile nature of Australian agriculture, fisheries and forestry will inevitably continue into the future. While climatic and economic variations will continue to be major influences, the sources of volatility have become more numerous. Changing and diversified consumer requirements, cost-price pressures, currency fluctuations, environmental problems, structural change in agribusiness, new international agricultural protection and production subsidies are a few examples of the challenges and opportunities that face Australian rural industries and researchers in the years ahead. RIRDC will address these matters in a proactive and timely manner, recognising that demands and expectations will vary as circumstances change.
Clearly the need for new products, new markets and new processes will be a major focus for public and private sector research organisations. RIRDC will work actively with its partners and stakeholders in both the public and private sectors to address this focus with relevant priorities, objectives and delivery mechanisms to meet our common goals. The means by which we achieve these goals will in turn be enhanced by further exploiting the linkages and interdependencies within and across rural industries in Australia.
Technological advance and innovation is a fundamental source of economic and productivity growth. It is essential to maintaining profitability and competitiveness in rural industries as the pace and range of new technologies increase. It is also important for RIRDC and its partners to recognise that a convergence of new technologies is emerging both within agriculture and in the non agricultural sectors. Non agricultural technologies can benefit rural industries, and agricultural advances can equally have beneficial wider applications. Extending our linkages and networks to harness these research synergies is an important future possibility and ambition.
Information extension and adoption of research results must remain as a cornerstone of RIRDC’s operations. An indispensable aspect of this endeavour will be the need to further address commercialisation and the associated IP management issues. The previous RIRDC Board has established key principles for commercialisation of research results. I look forward to working with RIRDC and the new Board in implementing these principles, bearing in the mind the overarching principle that we should facilitate adoption by commercialisation only where that is in the interests of stakeholders.
RIRDC’s active and innovative publication record must also be continued with flexible and adaptive management to meet future stakeholder requirements. Open and up to date communication and consultation systems will remain essential to achieving this end in close cooperation with our industry partners and stakeholders.
Finally the strong culture of governance, performance evaluation and accountability prevailing in RIRDC has been instrumental in securing the Corporation’s reputation and achievements. Management will work with the Board of RIRDC to maintain this essential aspect of our operations.
Simon Hearn
Incoming Managing Director
September 2002

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