Brian Schmidt and Richard Holden addressed the National Press Club jointly this week. The following are full transcripts of the speeches.

Let me take you back to February 1940 to the University of Birmingham. World War II had just broken out, and 38-year-old Marc Oliphant, an Australian-born physicist, who went on later in life to found the ANU Physics department and the Australian Academy of Science, had just had his lab invent the modern microwave resonant cavity, that could create incredibly intense radio-waves in a device of a size such that you could hold it in your hands.

This was a discovery that revolutionised radar – allowing it to be ubiquitous, giving it great precision, and even enabling it to be put onto planes. Oliphant took the invention to the US for mass production. It has been argued that more than any other single thing, this physicist’s invention altered the course of the war in the Allies’ favour, profoundly diminishing the effectiveness of the German Luftwaffe.

But that is not all that happened that February. Two Jewish physicists, who had fled Nazi controlled Europe, Otto Frisch and Rudolf Peierls, had taken up positions in Oliphant’s Lab and were tasked by Oliphant to work on nuclear fission – because the radar work was too top-secret for German nationals to work on. While he focused on radar, Oliphant asked them to calculate how much of the newly discovered element Uranium235 would be required to create a nuclear chain-reaction. The answer they came back with a few weeks later was startling, about 5kgs, and has altered the course of humanity. They had demonstrated that a nuclear bomb was possible – and given the advanced state of physics in Germany at the time, it seemed inevitable the Germans would create one. Oliphant ventured, as with radar, back to the US, this time with the nuclear secret, and thus was born the Manhattan project.

Germany arguably had the most advanced physics research capability in the world in the 1920s and early 1930s – but by 1940, they didn’t. The Nazis drove away all of their Jewish scientists – which were a large fraction of the German scientific endeavour, and treated the scientists who remained largely with contempt as dangerous intellectuals. The refugee scientists took up residence largely in the UK and US, creating a technical ascendency for the allies — whether it be in radar, bomb sites, penicillin, code-breaking or nuclear weapons — and was a major part of the ultimate defeat of the Nazi regime.

We are now seeing how quickly the nature of conflict has evolved in the Russia-Ukraine war, and we can expect new technologies based around small-scale automated machines, hypersonic missiles, and computer warfare to feature prominently if we are to have future conflicts between advanced economies. In such a case, the research capability of a country will be incredibly important at influencing the overall winners and losers, because once the conflict starts — you have what you got — you do not suddenly create the research and researchers – that takes decades. I hope we never get to this state. But nor should we stick our heads in the sand and ignore the possibility.

The much better part of research, however, is the prosperity it brings, through new products and ideas that make lives better. But understanding the research ecosystem remains elusive for much of the public, politicians and even policymakers.

One of the most common conversations I have with people, especially politicians, goes something like this. “Hey, Professor Schmidt, the astronomy you do is really cool – but why does the government pay you to do it?”

It’s a question that ruffles many of my colleagues’ feathers.

“The Universe is beautiful. Understanding it has deep cultural significance. It fills the world’s heart with wonder” …

And indeed those are reasons why I chose to study astronomy when I was 18. But these really are not the reasons why the government funds my research.

The government funds the study of the Universe, ultimately, because the knowledge we create and the people we train create immense value for Australia, and for the world.

Just look to your iPhone as an example. My areas of astro-particle physics provided the breakthroughs necessary to enable

• The World Wide Web and Touch Screen – both done at CERN;
• The Wi-FI done right here in Australian by Radio Astronomers'
• The GPS using precision time clocks in space along with General Relativity; and
• And the ubiquitous camera – the CMOS technology developed for the Galileo Mission to Jupiter.

Our graduates, while many work as academics, even more work in high-tech companies, defence, government and finance. As Richard will soon talk about, their ideas boost productivity.

But as a minister once asked me, “Yeah, but Brian, why do we have to do the astronomy… can’t we just go straight to the good stuff?” It sounds perfectly sensible, but it doesn’t seem to work in practice. The exciting part of innovation is not incremental, it is revolutionary. Yes, we need entrepreneurs to take new ideas and work on the “good stuff”, but we also need to have a sea of ideas that is continuously replenished from which innovators can fish for the next big thing. As Richard will explain, this public-good basic research is a classic market failure, and a place where governments need to intervene.

Let me tell you how it works for me personally. I immigrated to Australia in 1994 because Australia had invested for 50 years in astronomy, and I knew I could competitively do my project to measure the fate of the Universe, based here in Australia at the ANU. It was an environment every bit as good as what I had at Harvard. That basic research program, in addition to winning me a Nobel Prize, put me in close connection with world-leading instrument groups, with national and world leaders, with tech giants, and financiers.

It positioned me to lead the national university for eight years, where we radically overhauled our technology transfer program to emphasise getting our ideas out of the university so Australian society could benefit, and not spend our time killing ideas through a fixation of ensuring future royalty streams would come to the university. This change increased the deals flowing out of the university by an order of magnitude, including two companies that are based on the efforts that went into the Nobel prize=winning detection of gravitational waves from merging black holes (in which I also played a small role).

One of those companies is Liquid Instruments (whose founder Daniel Shaddock is here in the audience today) which is revolutionising measurement and test equipment by replacing the usual intricate array of custom hardware components with software and high-speed computation. It is now manufacturing its products here in Australia, with millions of dollars of sales globally, and is on a path to become a major global tech-firm. When I was asked by the Liquid Instruments Board recently to join them, I knew I had experience that could help them become an iconic global tech-firm, but also had a responsibility to Australia to help make it happen.

So, when astronomers ask the nation to continue to support our world-leading research through investment in the next generation of facilities — and, yes, we know it’s expensive — remember that we provide great value to the nation through a range of spillovers that include some of the most significant Australian innovations, but a range of less direct things with respect to skills, capability, relationships, and public engagement that comes from our global excellence. Our past has demonstrated that public investment was actually useful, and we have plans to be even more useful into the future.

A challenge we have, though, is that the dividends such research pays are measured in decades, not in the time-scale of elections. The public, and the politicians they elect, are impatient, and are prone to create a set of new programs that seem OK, but fail to create the long-term ecosystem from basic research to R&D-intensive companies that Australia needs to boost our productivity.

So rather than just admire the problem, let me outline what I think success might look like.

The first thing is continuity. Research works on decadal-long horizons, and when we improve our sovereign research system, we need to think in those time-frames, not in terms of one-off programs.

In the 13.5 years since I was awarded the Nobel Prize, I have had the privilege to work with 16 different science ministers. The longest serving of those, Ed Husic, is here today, and I want to thank him for his efforts. I am sure that he will continue to help the Parliament shape the innovation ecosystem into the future. To his successor, Tim Ayres, I look forward to working with you, and a genuine ask is for you to serve as minister for at least as long as Ed did. We will not improve our system without continuity.

Secondly, we need to positively engage in creating a comprehensive program across the ecosystem, not a series of one-off policy announcements that last 12 months and leave gaping holes.

I say positively for a reason. For the past two years, as a nation we have spent a great deal of time talking about what we do not like about our universities. I, at least, have heard the message loud and clear. But it is time to focus on what we want out of these institutions as a nation, especially with respect to our sovereign research capability. And this extends to agencies like CSIRO and ANSTO as well.

Right now, Australia’s policy environment does not obviously support our aspirations. For example, AUKUS is not just nuclear subs, but it is also meant to be a comprehensive technology partnership to create advanced capabilities in a range of disciplines that concentrate around the physical sciences and engineering. Similarly, our critical minerals strategy requires a range of expertise cutting across geology, geo-chemistry, and engineering.

As someone who recently finished leading a university that worked in all of these disciplines, let me tell you that current policy environment is forcing universities to divest and do less in these areas, not more. Infrastructure and equipment, materials, and buildings of these subjects are the most expensive of any research areas, and are not paid for by the Commonwealth. The jobs-ready graduate program reduced substantially the resources universities get per student in these areas – if you want a program that creates world-class graduates in these areas of national interest, it’s going to run at a loss. Richard will talk more about this problem.

Finally, we need to spend a lot of time and effort creating R&D intensive companies. This could be new companies, like Liquid Instruments, or it could be getting the right local companies to be prepared to use R&D to grow through innovation – and this usually means thinking globally, rather than concentrating on our domestic market.

Understanding the market failure that is occurring in our innovation ecosystem is a major piece of work, worthy of our best minds, and a long-term comprehensive response is warranted. I do not have a complete set of answers, but I do note that some recent policy interventions have been good, like the recent PhD internship program, which encourages PhD students to spend time in Australian companies. It is good for the students, and with low friction is bringing researchers and companies together more effectively than anything else I have seen. And it’s pretty cheap.

Something that is not cheap is the continually evolving R&D Tax concession, which has not proven to be the panacea which one might hope, given it costs taxpayers each year more than the research funding contained in the ARC, the NHMRC, CSIRO, Defence Science Technology Group, and Medical Research Future Fund combined. It is not that I do not think such expenditure might be warranted, but one should expect results from this level of investment that are not obviously present.

Members of the business community here will be rolling their eyes. “Not another change to the R&D Tax concession!” So while I have earlier emphasised the importance of continuity, I am also reminded of the apocryphal quote (and no, Einstein did not say this) that “Insanity is doing the same thing over and over and expecting different results".

We need to take a big look at the ecosystem, like Robin Batterham did in 2001 with the five-year Backing Australia’s Ability Program. It didn’t get everything right (it is where the R&D Tax concession came from), but it thought through the ecosystem, and made a comprehensive set of policies. What we have failed to do since, is a holistic five-yearly refresh of that program, where we learn what has worked, and discard what hasn’t – it really has been a year-to-year series of wall-paper jobs for the last 20-odd years.

I hope that I have reminded you that our sovereign research capability has enormous consequences for Australia’s future. I would hope that we would never forget this, but I look around and I am scared. The Australian Government investment in its sovereign research capability was one third higher 15 years ago as a fraction of GDP, and in the United States, our largest research partner, the university sector is under siege on multiple fronts, including the Trump administration proposing to immediately halve expenditure in the NSF and NIH – the bedrocks of US research.

Let me remind you what China is up to – they have raised their R&D spend by 8.3% last year, having increased their R&D spend as a function of GDP by more than a factor of five in the time I have lived in Australia. During that same time, Chinese GDP has grown in real dollars by more than a factor of 20 – the two figures are not unrelated! That’s a 100-fold increase, of which many of the benefits to the Chinese nation have yet to accrue.

As I finish and hand over to Richard, I want you to think what their increase and our decrease means for Australia’s future economic and security environment. I find it a sobering thought.

The views expressed in this article may or may not reflect those of Pearls and Irritations.