Cochlear chairman Rick Holliday-Smith (pictured above) says the government needs to increase the Research and Development Concession beyond the current $100 million cap on R&D expenditure, especially for advanced manufacturing companies, if it is to keep larger successful companies Australia-based.
Holliday-Smith’s comments came as part of his 2015 Chairman’s Address to the Cochlear Annual General Meeting on 20 October 2015, which took place as the Australian Securities Exchange in Sydney.
In his speech, Holliday-Smith recalled the founding of Cochlear over three decades ago in Australia. The history of the company has involved a mix of innovative academic research, government funding and strong commercial partnering. Over the years, Cochlear has become a success story, a local company which has transitioned to a global advanced manufacturing company.
Today, Cochlear employs some 2,800 people from over 75 nationalities, with operations in 20 different countries.
“The question today is: How can Australia continue to encourage new similar success stories while at the same time ensuring that companies like Cochlear continue to be Australian based,” Holliday-Smith said.
According to Holliday-Smith, the Federal Government is on the right track with its latest conversation about the importance of innovation to drive long-term growth for Australia, but it needs to invest in innovation – especially given the effort being made overseas to compete in enhancing, developing and attracting research and development activities.
The government should therefore focus on establishing and maintaining a globally competitive framework with a focus on anchoring advanced manufacturing capabilities in Australia.
“We would recommend the Government to reward appropriately defined innovative companies for their incremental R&D spend by increasing the R&D concession for additional R&D expenditure,” he said.
“Specifically, we think the current $100 million cap on R&D spend qualifying for the current incentive should be raised for advanced manufacturing companies. As it now stands, Cochlear is bumping into this artificial cap and there is an incentive to perform additional R&D abroad where we qualify for similar or even enhanced incentives.”
Holliday-Smith also pointed to the key parts played by the academia in nurturing innovation. Specifically, there must be an effective interplay between commerce, academia and government.
For example, Cochlear is headquartered within the Hearing Hub located on the campus of Macquarie University. This hub allows over 2,500 academics, businesses and hearing health professionals to collaborate with each other, creating a competitive advantage for Australia.
“Cochlear strongly urges all parties to continue to strengthen and develop these alliances. We need to ensure there is focussed and scaled effort,” Holliday-Smith said.
“It should mean Government oriented funding, including into tertiary education and research, should have a clear objective of creating collaborative centres of excellence. It should also have a clear objective of keeping as much of the ensuing value and work opportunity in Australia.”