00:00:02
Speaker 1: Welcome to the Business of Tech powered by two Degrees Business, where we dig into the forces shaping the future of technology, innovation and the digital economy. If you missed last week's episode, boy it was a good one. One of our best grating episodes to date. It's all about the AWS debarcle around the launch of their data center region in Auckland. I'll put a link to it in the show notes. Definitely worth the listen anyway. I'm Peter Griffin and today I'm talking to a leading figure from Australia science sector about how the country is reshaping its science and innovation efforts based around advanced technologies like quantum computing, artificial intelligence, clean tech and advance manufacturing. Doctor Kathy Foley has a career spanning over forty years at CSIRO, the Commonwealth Scientific and Industrial Research Organization. She started as a research scientist and a board member of CSIRO. Along the way, she helped come up with quantum based technology that allowed the mining industry to identify mineral deposits deep underground. That was a real game changer for the mining sector. Kathy also served as Australia's Chief Scientists during the Scott Morrison government and then part of the Anthony Albanesi government as well. She's seen as a central figure in bringing some cohesion to Australia's fragmented efforts in quantum computing, to the extent that Australia is now a significant player in that area of tech, with around fifty spin off companies, including PSI Quantum, which has received state and federal investment to the tune of around a billion dollars. It's setting out to build a functional quantum computer in quite a short time frame. Kathy offered some unique insights into how Australia turned scientific breakthroughs like the technology underpinning Wi Fi in quantum sense, into multi billion dollar industries, leveraging government strategy, standards and entrepreneurial thinking. There are some hard won lessons from Australia for US as we grapple with scaling up our own tech sector, breaking down silos and research, and unlocking the value in innovation. Kathy shares what worked across the Tasman from building global supply chain niches to evolving the culture between academia and industry, and addresses the roadmap New Zealand can use to punch above its weight and feels like quantum AI and clean tech. So here's Kathy Foley, who I caught up with recently when she paid a visit to Wellington. Kathy Foley, Welcome to the Business of Tech. Thanks so much for coming on. Great to see you in New Zealand.
00:02:51
Speaker 2: It's wonderful to be here. Actually really enjoyed just flying in last night.
00:02:55
Speaker 1: You're visiting DoD Wall's people here. Robinson Research Institution also involved in you were the Chief Science Advisor for four years and spanned two Australian governments Scott Morrison and then Anthony Albanesi administration. So that would be interesting to the political elements of science funding and that, so maybe we can touch on that. But really, Keen, nineteen eighty five you joined CSIROS. That's a forty year career at CSIRO, this incredible organization at the center of science in Australia, and you were a researcher before that as well, have done everything from fundamental research through to you were a chief scientist off CSIRO and now on the board off IT. It take us back to your early days of science. What got you into science and the sort of area that you sort of specialized in early on.
00:03:46
Speaker 2: Well, I guess I've always been interested in science, so just personally, I'm not good at spelling in English and all the sorts of things that young girls are meant to be, especially coming from a Catholic comment school. So science was my happy place, along with math, and I just found it. I was encouraged by teachers at school and always thought it'd be great to be a scientist, but not knowing any because I come from a middle class professional family. My dad was an accountant, my mum was an architect, so back in the sixties and seventies that was pretty unusual. So came from a pretty privileged background, but I didn't know science. They all thought I was a bit weird and I was going to be a school teacher. But when I was at university, I was really encouraged and ended up doing this sorts of things to do honors year, won a scholarship, did a PhD. I applied for a job in the newspaper and got one at CSIRO. Was what would be called a post doc, was called research fellow. It was a three year job and then eventually it was extended, and then I applied for an indefinite appointment in CSIRO, which by the way, I got when I was seven months pregnant back in nineteen eighty nine, which is unheard of, and that having a secure job meant that I was able to really pursue a career.
00:04:57
Speaker 1: And what was your main research focus you joined CSRO.
00:05:01
Speaker 2: So when I started CSRO is actually working on amorphous metals and magnetism. I had done my PhD in night Tried semiconductors. Now night tried semiconductors are the materials that are in white light emitting diodes. And when I was doing that work, I was one of the first researchers working on it, doing very early fundamental work, and that eventually led to other people published papers.
00:05:23
Speaker 3: Other people in Japan.
00:05:24
Speaker 2: Took it up, and thank goodness, we've got white light emitting diodes now because they're big energy save us.
00:05:29
Speaker 1: In the eighties here those opto electronics. You're working on things that go into bicodes, your blu ray players.
00:05:37
Speaker 3: So well that they were things where that.
00:05:41
Speaker 2: The applications of something like a white a light emitting diode and the whole photonics that was really critical. And I suppose the thing which was interesting was I was interested in solid state and then when I went to CSRO, I worked in in magnetism and then in eighty six eighty seven there was a discovery ofhigh temperature superconductive so I was selected to join a team to work on developing the material making devices and from that took very new discovery which was done of course in other countries, but got the Australian version of it. We got to a point where we developed a device that can detect very small magnetic fields and that can be used from anything from measuring your heart or your brain through to eventually mineral expiration, which is where we commercialize the system.
00:06:28
Speaker 1: Oh yeah, and obviously Australia's ground zero for that sort of stuff. So Kathy, take us through that. How you do that? How you can sort of basically see through the Earth's crust using these super conducting sensors.
00:06:41
Speaker 2: So a superconducting sensor just measures magnetic fields, and we forget we liven on a big bar magnet the earth. So North and South Pole, which everyone's familiar with. What we were doing was at that time to working with PHP and originally we were developing a device to detect defect in steel because at that stage It was also still manufactured before they spun it out to bloscope, and we detected with a very preliminary device. It was pretty one of the first squid devices made using this high temperature material. And high temperature I should say it means it was cool with liquid nitrogen, not liquid helium, so minus two hundred degrees it operatesor BHP got us to present that to their annual review of all their research they did within the company back then in the late late nineteen eighties, and they said, oh, this is really interesting. We've been trying to get one of these devices to work for mineral expiration. And the idea being that if you put a big loop of wire on the top of the surface of the earth, pulse a current, and when you pulse the current through a wire, it creates Eddy currents in everything, and then those Eddie currents have their own magnetic field, and when you turn their current pulse it the current happens in the Eddy current happens, and if there's a conductor or all body, and then it dies away. And what we were able to do was use the magnetic sensor to detect that dying Eddy current in an all body and how slowly it died away, gave you an idea of how deep it was and also what the quality of it was, and you could move this across the top of the Earth and be able to map out up to two kilometers below the earth in some cases not always.
00:08:28
Speaker 3: But the other thing that's really important is.
00:08:29
Speaker 2: Australia got that old red soil, which everyone knows that is.
00:08:33
Speaker 3: Terrible for mineral expiration from the surface.
00:08:36
Speaker 2: Because it's like having an RS screen there, so you can't it's very conducting. They call it a conducting overburden, and so these systems could see through that because of the we were measuring the magnetic field directly, as opposed to other techniques which measured the variation of the magnetic field with time, and they just screwed up with everything that was in the environment. And as a consequence, we're able to see things which couldn't be seen previously.
00:09:03
Speaker 1: And you know that led to the mining companies having the ability to much more easily see, Okay, there are deposits, they might be quite deep, and there's a lot of really deep deep mining in Australia, but they could actually identify it, and so in terms of speeding up the discovery of mineral resources and there I mean that created billions of dollars in value.
00:09:25
Speaker 2: Yeah, So to be honest, some of our work, you know how a mining industry, like any industry, has its high as and lone and when it was in a low we actually started doing some of our research with Canadian mining companies. And there's a company back then which has changed its name multiple times. It probably doesn't even exist anymore. But up in the Raglan in the Polar region, they got to a point where they're looking for nickel sulphides and they reduced their exploration costs by about thirty percent because they could go through and get the shape and the depth and then be able to drill holes to get know where it was. Because usually go through into a map, then you go through and do drilling, and the drilling is very expensive and quite often the drill holes tell you nothing. But they were able to every time get it right in the center of where they needed to find the order posit, and it meant they could get into mines much faster.
00:10:21
Speaker 3: An example happening.
00:10:22
Speaker 2: With BHP with a silver mine up in Cannington in Queensland, and they again they had this was We didn't discover that mine, but we were just used as a trial and they thought it was too that it was two separate loads or all bodies next to each other, and they were about to drill in between them. No, sorry, they thought it was a single load. I'm not going to drill down the middle. But we showed it was two loads, and if they drilled, they would have gone right through the middle of it and that would have missed.
00:10:52
Speaker 3: Both of them.
00:10:53
Speaker 2: And because they said let's just move it a certain distance, I went through the middle of the of the silver deposit. It meant that they found it was a really good silver deposit. They're able to delineate it really carefully just with that system, and it brought the mine on site eighteen months early. And back in their nineties everyone forgets about. The mining companies had difficulties. They invested a lot into copper in Chile and BHP wasn't doing very well. The first shipment of Cannington silver from that mine, which we help bring online eighteen months early, I paid their salary bill one month.
00:11:29
Speaker 3: So you know, these things have a flow on effect.
00:11:32
Speaker 2: Where a technology that started with me playing around with single grain boundary doing fundamental work led to know, really supporting a company to be financially viable in a downtime, helping things come online fast. Now got a life of its own. There's about thirteen land M systems and they're used commercially, even though it's old technology and now looking to be upgraded with a whole lot of new, up to date quantum stuff. It is a quantum device. It's one where we really need to upgrade the electronics. And I know I'm not part of my old team are now working on upgrading that. But what we've seen is it's delineated or discovered billions of dollars worth of minds.
00:12:13
Speaker 1: That's incredible and sort of around the same time, some of your colleagues and another part of CSIRO were working on radio telescopes and some of the technologies they came up with to facilitate their research underpins what we use as Wi Fi.
00:12:29
Speaker 2: Now, that's a really interesting story because it goes back to nineteen eighties, late eighties where CCRO used to be in the early eighties a university without students. You could describe it as McKinsey's consulting company came through at the request of the government to do a review and they said, look to be more engaged with industry.
00:12:49
Speaker 3: You need to pull thirty percent of.
00:12:50
Speaker 2: It's finding a way and make it earn that money by engaging with industries. So you can imagine doing it overnight in a budget cycle was catastrophic for the organization. But over a twenty year period we finally learned how to do that and engage. Because csro's purpose is to solve the greatest challenges to help Australia this successful country. But we've always had a strong astronomy aspect in it, even though it's seen as fundamental work. Australia's in a really good place on the Southern Hemisphere. It's quite electromagnetically. It's radio astronomy that it's involved with, so it's got really good and ability to design antennas and all the electronics and signal processing that goes with that. And that was a consequence of the During World War II CSRO there wasn't a defense research organization and and CSRO did the government's defense research and they developed a version of radar and when well the warfare, he said said, what do we do with is now? Let's point at the sky and that was radio astronomy being discovered by Ruby Payne Scott. You know, the team there said what can we do. We've going to earn some money, let's do some solve one really big problem. Wouldn't it be great if you could actually work out how you can separate out signals so that you didn't have to have wires and have a wireless communication. And so they did that saying well, we've got this background of fundamental work and experience, how do we actually turn that to solve this particular problem. So it wasn't a Eurecam moment. It was actually a project which over a very long period of time. These things don't happen straight away. And there's a great picture which Bob Freighter puts he called it's a cosmic geneology. He's got things going everywhere, were educating people with PhDs, having different different research projects that sort of built up the capability and eventually they came up with a solution.
00:14:36
Speaker 3: It was patented.
00:14:37
Speaker 2: But the thing was really important was engaging with international standards. So Dave Skillen, who was a mcquarie University professor in electronics who was collaborating with this team because he was part of the team that educated some of the researchers that developed the technology, and he's spun out a company called Radiata. It was brought up by Cisco Systems and then it commercialized Wi Fi in the USA. And the thing was really critical was they really pushed hard for it to be accepted as the Tripoli standard. Thank goodness he did, because it's a high quality capability, which meant that you know, when you go overseas and you've got to have different powerpoints for plugs for different things, or even with our mobile phones, you've got to use different jacks. Imagine if we'd had different Wi Fi systems everywhere and every time you get to a different place, you'd have to use a different Wi Fi, I'd be unworkable. By getting that international standard right with the best quality thing our process or technology means that it's been ubiquitously used.
00:15:34
Speaker 1: And the great thing about that, you know, that is the ultimate example. And what you did with squid Off the whole point of CSIRO. And we had at the time the DSII, the Department of Scientific and Industrial Research, which then split in the early nineties into these Crown Research organizations. It was the commercialization of fundamental research. And the great thing about that, you know, for CSIRO is probably still getting royalties from.
00:15:59
Speaker 3: Not because the patterns run out, but.
00:16:02
Speaker 1: For probably twenty or thirty years it would have been a lucrative stream back to the country.
00:16:08
Speaker 2: We had to fight legal battles, so CESRO actually went to court in the US. It was quite controversial at the time to protect the IP and the reason that was important was to show that the rule of law with patenting internationally can be upheld and therefore patents are worth it because they're really only licensed to sue really, so that was really important. But it took a lot of guts, I think to do that, and as a consequence, they went through a whole lot of the different companies who were using that White Fi technology while it was still under patent to therefore get royalties in response, and with that it allowed us to set up a whole lot of different programs across the country. Those funds were followed back into government revenue. What they did were put into a special funding pool, which led to for example, setting up main Sequences, which is a venture capital which is funded by well start off with Wi Fi funds, some federal government money and it's a very successful venture capital, which is a little bit like what Israel did in the seventies. We're invest very early with patient capital. Also bring in a whole lot of entrepreneurialism into the research sector so that you can help commercialize and translate stuff that was set up by Malcolm Turnbull government. And it's been they've had multiple funding rounds. Now it's a very successful, very successful venture capital and it's now the government doesn't put money in because people put money in because it's so successful and it raises it's funding independently, so.
00:17:43
Speaker 1: That model has been really successful. CSIRO is seen as a really important part of the research landscape in Australia. What was it like over sort of forty years of being involved in the organization the ev and flow of polot. It seems that there was always a commitment to fundamental research and spending a decent amount of money. I think Australia spends more on R and D than the New Zealanders as a percentage of GDP, It's probably low compared to Israel in the US, but there's always been that commitment, whether it's been a left leaning or a right leaning government.
00:18:20
Speaker 2: Some people would question that at the moment, the government's undertaking a strategic examination of research and development, and what we've found is that Australia has the highest investment in research from the university sector because of their international students.
00:18:36
Speaker 3: It's the highest in the OECD.
00:18:38
Speaker 2: The government investment is about a little bit below average. It has dropped a bit in recent times in real terms a bit under two percent, and someone might even have dropped even.
00:18:49
Speaker 3: More than that.
00:18:50
Speaker 2: But there's the biggest problem for us is the industry investment in research development or business expenditure and research development is the lowest in the OECIT.
00:18:59
Speaker 3: So that is a huge problems for Australia. Lovet yes, where a.
00:19:02
Speaker 2: Country of small medium enterprises like ninety nine percent most of them have got like seventy percent have lessened to twenty people. So you can imagine their investment in innovation is not where it needs to be and that's a focus on the government at the moment.
00:19:17
Speaker 3: A lot of it is because of it's a service.
00:19:19
Speaker 2: A lot of those small medium enterprises a service, you know, our bars, coffee shops, that sort of stuff. But the innovative companies are beginning to grow and that's why things like quantum has been really important AI deep tech and the recognition that we've had a bit of a bifurcation where you've got amazing research. Australa has always done really well. Everyone talks about hitting you know what is it hitting above its way? That's it punching above its way and it has, but that's where it stayed. And we haven't been so good at transitioning things out of the university sector into turning it into industry. University people being universities industry people in the universe. He even public funded agencies like CESO, there's not much movement between them. And so one of the things that the Turnbull government did in twenty sixteen, and this wasn't popular, He almost lost the election over it.
00:20:12
Speaker 3: He set up in December twenty sixteen the.
00:20:16
Speaker 2: National Innovation and Science Agenda, and he set up main Sequence Ventures investment into Michelle Simmons's quantum computer, setting up the on program, which is an entrepreneurial program which Larry Marshall, who is the CEO of CSR at the time, to try and create entrepreneurialism within scientists and that's been hugely successful.
00:20:37
Speaker 3: And there were some other things as well.
00:20:39
Speaker 2: But the thing that was interesting was the electorate hated it and he almost lost the next election because people saw innovation was going to take their jobs. But holding in there we've seen as a real shift so that we're beginning to see and it's been painful and we're not there yet, but at university professors thinking that where instead of having just an academic perspective, you see, how can they spin out companies, how can they turn their great research into opportunities for creating new businesses. So we've got a remarkable number of startups and the quantum area is the one we're focusing on.
00:21:12
Speaker 1: It Well, that's from the outside has been incredible to watch sort of from the Turnbull government and actually before you know there was significant investments into quantum, but that's really accelerated to the extent that we've had Psygh Quantum, a huge government investment into this one really promising startup that is looking to build quantum computers artificial intelligence as well. And now we've got in the wake of COVID, a big push on advanced manufacturing, clean tech in Australia and cyber a lot of money relative to New Zealand's going into cyber and so you were there as Chief Science Advisor in the Scott Morrison government towards the end of his tenure Albanisi government as well. From your perspective, what explained this sort of ongoing commitment was it that fact that politicians across the aisle realize we've got a problem with our small and medium sized businesses here. They're not spending enough, they're not commercializing science to enough of a degree to shift the needle for the economy. We need to resource this properly.
00:22:16
Speaker 3: Well.
00:22:16
Speaker 2: Look, successive governments have been worried about that, and especially when you're a science advisor, your role is to just provide the evidence, and the evidence is stuck. You know, Australia didn't have much new to the world innovation in its products that it's exporting. If you look at Australia's economic complexity, we are sort of one hundred somewhere between ninety seventh and one hundred and second. It's a Harvard measure saying how complex is your economy? And because we're so dependent on agriculture and on mining, and it means that although we've got deep complexity in our ability to extract them and be globally competitive. What we're not doing is adding value to them, so that we're not realizing it's almost like producing the materials but then shipping it off somewhere else for someone else to get the value from it. And as we see the energy transition, Australia is very dependent on fossil fuels, so we have to transition oury economy. I mean, just to give you an idea of what being one hundred and second is, Yemen, Bikina.
00:23:24
Speaker 3: Faso, Bangladesh.
00:23:27
Speaker 2: Okay, So it sounds ridiculous that Australia should be ranked there, but that's because we've got huge volumes.
00:23:35
Speaker 3: We've been a prostrous nation.
00:23:36
Speaker 2: We've not really had a technical recession for decades. I'm getting on to forty years now, and that's because we've been so lucky that we've been able to use our mineral deposits and basically ship them to mostly China and wreck the benefit from that. So that's possibly made us a little bit lazy as well, and as a consequence, we haven't really had the desperate need to turn our research into dollars.
00:24:04
Speaker 3: But that's changing. We have to really get to.
00:24:07
Speaker 2: A point where if we're going to be a prosperous nation in twenty fifty where we lose at least sixteen percent, which is about between one hundred and fifty and three hundred billion dollars of our exports because of no one's going to buy our coal, our thermal coal, oil gas. We're going to reduce circular economy, econom iron ore, that sort of thing. Even some of the critical minerals used for batteries will be recycled.
00:24:31
Speaker 3: We've got a bit of a runway.
00:24:32
Speaker 2: So how can we make that great research turn into prosperity we like in Australia. Look, if you go through looking at successive governments have recognized this. How they've gone about it has been slightly different, and there's always tweaking around the edges, but saying the quantum areas in some here this week for quantum.
00:24:50
Speaker 3: One of the things is.
00:24:51
Speaker 2: Interesting was when I became true scientists, I raised the issue that with the Prime Minister saying quantum is a really big opportunity. The AI was just sort of beginning and said, well, quantum is. We've got strength in that we've been investing in fundamental research for twenty five years for the istering research Council through numerous centers of excellence, we've funded about a billion dollars worth of fundamental research since about two thousand and we're beginning to see the odd spinout company. There's a real opportunity for us to have an industry. We're one of the best in the world in the research. Let's turn that into an industry. And to be honest, in the four years I was chief signed as we turned it into an industry and there were a couple of things that we needed. First of all, when I was in CSORROW, we did a roadmap to show the value proposition. So Larry Marshall, who is the Chief executive at the time, funded a roadmap being done through an ability to do these sort of roadmaps within CSRO the technoeconomic stuff which is very important. So we're able to get the value proposition and you know, sixteen thousand jobs, billions of dollars worth of increased at GDP is pretty easy. Well, the Morrilton government said let's start doing a strategy and then they lost the election. We got an Albanesi government and then Minister Husick, who was the Minister at the time, said I'm all in and so we had a National Committee Quantum Committee. We developed a strategy and then the Government Department of Industry, Science and Resources had the whole branch of that implementing that quantum strategy. And I guess you had a lunatic chief science like me running around the country sprooking out saying this is really important.
00:26:31
Speaker 3: And if I go back to twenty ten, when I was.
00:26:35
Speaker 2: In the austrain Institute of Physics was saying we're doing their decaybal plants and there's no industry for physics in Australia.
00:26:43
Speaker 3: That was just so wrong.
00:26:44
Speaker 2: What we didn't realize was what it means to take our research. And we've seen a lot of Australia's physics research line up behind quantum.
00:26:53
Speaker 3: Quantum is quite a horizontal.
00:26:55
Speaker 2: It's got photonics, it's got semiconductors, it's got classic quantum computing sensing and things. And so what we've seen is a real focusing down on as a research community saying this is important. People now doing PhDs saying I'm spinning out a company, and some of those companies have been very successful. There's one which came out of University Queensland and these PhD students sold the company for forty million dollars recently.
00:27:20
Speaker 1: So credible is that one?
00:27:22
Speaker 3: Is it?
00:27:22
Speaker 1: Control? Are is another wall?
00:27:24
Speaker 3: No? No, that's some Key Control Control.
00:27:28
Speaker 2: So Key controls another big company. It's it's come out of Sydney University. There's been I think about fifty startup companies, been forty and fifty happening all the time.
00:27:37
Speaker 3: I've lost count credible and so kids are doing their PhDs.
00:27:40
Speaker 2: Knowing where I'm going to spin out a company when I finish this and then partner because it's not like they're building a whole quantum computer. I've got some quantum computers being built, but they realize they're part of the supply chain because there's a big global, big global effort, and so there's there's a need for so many different bids.
00:27:59
Speaker 3: No one place is going to do it all, no one country.
00:28:02
Speaker 1: And I think that's the opportunity for New Zealand. Interested in your view what our relative strengths are both in quantum man and in the superconducting space as well. But we have to remember we're very small. But as you say, there's going to be a big supply chain for quantum computers, quantum sense and quantum communications, So if we can specialize in particular niches that aren't being filled overseas, and I think what you said that works so well in Australia. You know that mapping of what the opportunities are, and I feel in some of these areas we haven't. For instance, in artificial intelligence, we just had a national strategy put out there, but it was sort of criticized because I think there wasn't much depth to it where you were actually saying this is the opportunity for New Zealand. It was they want adoption of artificial intelligence, but they've sort of said we're not necessarily going to be developers of AI, which seems to be a lost opportunity.
00:28:57
Speaker 3: So there's a couple of things there.
00:28:58
Speaker 2: The first one is developing software is really cheap in anyways, so it's an easy way in. But the other is also AI is dependent on training and algorithms and stuff which are very culturally based. Really every country needs to have a version of AI just so.
00:29:14
Speaker 3: It's got its cultural stuff that's in there.
00:29:17
Speaker 2: You've got a strong sort of First Nations culture here as well, So how do you get make sure that's part of your AI training that it means that, and then you've got the whole issues of IP and ownership and that which is a very different cultural perspective. So that New Zealand has been such a leader in Mari culture and adoption and being able to bring knowledge systems alongside more Western approaches, there's something really huge opportunity there to lead the.
00:29:47
Speaker 3: World on that.
00:29:49
Speaker 2: As well as you know just what it is to be in New Zealand, just like it is what it is to be in Australian is very different to what it is to be a Silicon valley.
00:29:57
Speaker 3: Dude, Yeah, that's right.
00:30:00
Speaker 2: Doing their algorithm development, So these sorts of things really are very culturally based because you AI is basically a big statistical model that trains and uses the whole stuff that they can access, which they choose because of the algorithms that they develop to be able to pull out information and from that get a statistical approximation based on what's been going before. So, I mean, when you think about it as extraordinary how humans have been able to create that something, AI has the ability to really have a huge uptick in productivity in so many ways, just even just from able to synthesize information. Here's a whole lot of information. Can you bring it together? And that's where AI can be great. If you're asking you to questions which sort of says how I'm trying to find something new or pull together information if you look at where it pulls it from. It doesn't necessarily pull it from your own area. You can ask it to and there's all different models that you have to learn how to engage with them, and that and itself will be I think a high level professional role is how to actually talk to an AI and put the prompt sense so that you're able to get the best out out of an AI system. That in itself will become a very highly sought after professional role.
00:31:20
Speaker 1: Absolutely, and you've got the national AIC into in Australia, quite a bit of investment going into AI available for startups. The different dynamic you have in Australia is the States and they're all quite competitive as well, so they will put on their own R and D tax incentives and that they're all competing with each other to host labs and that sort of thing. Has that as a chief science advisor because they all have their own chief science advisors as well. Does that complicate things or does that actually improve things.
00:31:50
Speaker 3: Oh, look, it complicates and improves.
00:31:52
Speaker 2: So each state and territory's got a different demographics, different environment, different weather, different industry focus. So even though it looks like you've got a bit of everything everywhere, what you'll find is each state and territory has got their own thing which is appropriate for their area. The Chief Scientists of the States and Territories, along with the New Zealand Chief Scientists or Science Advisor get together regularly the Forum of Australian Chief Scientists, we should say in New Zealand and in fact I believe their meeting in Sydney next week and we became a really close cohort and we're able to share information. But the other is also showing how it works.
00:32:28
Speaker 3: Together and quite.
00:32:30
Speaker 2: Often you can do an awful lot without investment by just making sure you've got coordination, planning and optimizing and where your focus should be so that you're able to turn You know, when you've got a small envelope of money, you've got to work out how do I use it well and get a big leverage from it. And that's always the challenges, saying how can I take this dollar and turn it into five dollars by partnering, by getting others to put money in. And that's probably the biggest challenge for New Zealand is to say, well, how can we levery your investment?
00:33:01
Speaker 3: And quite often.
00:33:02
Speaker 2: Leveraging requires you to just be constant, play the long game. The second is that you just settle and deal with the structures so that then you're able to navigate things so that people aren't having every time they're out contact with you. It's not a new face or a new organization.
00:33:20
Speaker 1: Look, you're meeting our Prime Minister's Chief Science Advisor, John Rosche's relatively new to the position. Any sort of words of advice or thoughts about what worked well for you as chief Science Advisor and your forty years of working at CSIRO. You talked about turning one dollar into five dollars. That's really the remit he has. He comes from an agricultural background and we've done very well in that space. But in terms of the more sort of advanced technologies that you've specialized in, how do we get this right?
00:33:51
Speaker 2: Well, I think the first thing is it's not the role of chief scientists to tell the government what to do. What's really important is to provide the options, evidence based strategic thinking in terms of what if how can we coordinate, bring things together, use a convening power to bring people together to work together. That's what I found worked really well because when I took over, Australia was seems very fragmented and a bit of a mess in quantum to be honest, and very disorganized, and people fighting amongst themselves, and just by being there and bringing people together, working through and saying, look, let's look at the bigger picture, where us against the world, not us against each other within the country, and also having good something to sell, which is so that it's what the last thing you ever should do with the government in my experiences, go out and say.
00:34:41
Speaker 3: I need money.
00:34:42
Speaker 2: What you need to say is I've got a vision and we've got the evidence to show how we can get to that vision over to you, and they'll either say that it's run with it or not. We elect governments, I think you have to always respect, particularly liberal democracies, that you have to respect the people have been elected, They've been elected for a purpose, and what you're there to try and do is to support them in what they were elected for, but making sure that they can see what the options are and what the consequences are.
00:35:12
Speaker 1: What the consequences that are. Having something to sell bottom line is really important. And we've had we've had great academic outputs, lots of research papers.
00:35:22
Speaker 2: New Zealand is an amazing country. When you go back from Rutherford. Oh well dogs see you've got some amazing work in se conducting power lines and tapes and magnets and stuff like that. And what I always say is, you know a fewer bigger things, focus on things where you've got strengths. You don't it to be your things to everybody, but identify where your strengths are and then turn that into global market supply chains.
00:35:52
Speaker 1: And that point about there is a global supply chain in quantum, in AI, in clean tech, and particularly in things like clean tech and manufacturing where the Australian government has said we want to rebuild Australian manufacturing. We want to build EV batteries in Australia, solar panels.
00:36:09
Speaker 2: So not EV batteries but probably stationary batteries.
00:36:12
Speaker 3: Yeah, so I think which.
00:36:15
Speaker 1: Are for power plants and that's sort.
00:36:16
Speaker 3: Of yeah, that's right.
00:36:17
Speaker 2: Yeah, so you know, things on vanadium flow batteries are sorts of things and making the most of some technology. But the thing that I think that's really important is, you know, the strain promises here over the weekend. I suspect that there's real opportunity to for Australian New Zealand to partner more and say let's hold hands across the ditch and be able to see where we.
00:36:39
Speaker 3: Can support each other at bit more.
00:36:40
Speaker 2: And that's what I'm hoping we'll be able to do this week too, because there's some real strengths in New Zealand which we don't have in Australia. So I'm hoping we can in my unofficial capacity as quantum enthusiasts, see how we can make sure that we can link those up.
00:36:53
Speaker 1: Yeah, and helping out Robinson Research Institute as an advisor. I just had around seventy million in it into that organization. So there is ye green shoots happening.
00:37:04
Speaker 3: It's exciting times.
00:37:05
Speaker 1: Thanks so much, Kathy, really appreciate you coming on the business of Tech.
00:37:08
Speaker 3: Lovely talking to you.
00:37:09
Speaker 1: Thanks, thank you. So there you have it, some great insights from Kathy Foley. Australia, as Kathy pointed out, has a bit of runway. Thanks to its vast mineral wealth to transition its economy away from fossil fuels, but it faces many of the problems that we do. Most businesses there are small and medium sized, so it's hard for them to invest a lot in R and D and cutting edge technologies that will define the twenty first century. Australia is reviewing its approach to R and D to address some of the issues holding back innovation in Australia. That's a process we've just been through. The key takeaway from Kathy from me is that areas like quantum tech require a complex supply chain. No company or country can do it all themselves, so that's an opportunity for New Zealand. But as she said, you know, being really deliberate in knowing where you can add value to that supply chain and being able to articulate that to the government when you ask for a taxpayer dollars is absolutely crucial. The Robinson Research Institute were obviously really successful at that. Recently they got seventy million dollars in funding for their superconducting and magnetic research. CSIRO has been successful in making the case for investment in the areas like quantum cybersecurity and AI and has done a lot to improve the relationship between the research sector and Australian businesses, so there are some useful pointers there as our own reorganized research sector with its new remit of supporting economic growth starts to take shape. Thanks for listening to the Business of Tech. If you found Cathy Foley's insights on innovation strategy, commercialized and cross tasmin collaboration as interesting as I did, make sure to share the episode and subscribe if you haven't, on iHeartRadio or your favorite podcast app for more deep dives into the business of tech. Next week, what's going on in tech recruitment at the moment as AI becomes pervasive in software developments, and what happens when AI is tasked with analyzing your job application. That's next Thursday. I'll catch you then.
Speaker 1: Welcome to the Business of Tech powered by two Degrees Business, where we dig into the forces shaping the future of technology, innovation and the digital economy. If you missed last week's episode, boy it was a good one. One of our best grating episodes to date. It's all about the AWS debarcle around the launch of their data center region in Auckland. I'll put a link to it in the show notes. Definitely worth the listen anyway. I'm Peter Griffin and today I'm talking to a leading figure from Australia science sector about how the country is reshaping its science and innovation efforts based around advanced technologies like quantum computing, artificial intelligence, clean tech and advance manufacturing. Doctor Kathy Foley has a career spanning over forty years at CSIRO, the Commonwealth Scientific and Industrial Research Organization. She started as a research scientist and a board member of CSIRO. Along the way, she helped come up with quantum based technology that allowed the mining industry to identify mineral deposits deep underground. That was a real game changer for the mining sector. Kathy also served as Australia's Chief Scientists during the Scott Morrison government and then part of the Anthony Albanesi government as well. She's seen as a central figure in bringing some cohesion to Australia's fragmented efforts in quantum computing, to the extent that Australia is now a significant player in that area of tech, with around fifty spin off companies, including PSI Quantum, which has received state and federal investment to the tune of around a billion dollars. It's setting out to build a functional quantum computer in quite a short time frame. Kathy offered some unique insights into how Australia turned scientific breakthroughs like the technology underpinning Wi Fi in quantum sense, into multi billion dollar industries, leveraging government strategy, standards and entrepreneurial thinking. There are some hard won lessons from Australia for US as we grapple with scaling up our own tech sector, breaking down silos and research, and unlocking the value in innovation. Kathy shares what worked across the Tasman from building global supply chain niches to evolving the culture between academia and industry, and addresses the roadmap New Zealand can use to punch above its weight and feels like quantum AI and clean tech. So here's Kathy Foley, who I caught up with recently when she paid a visit to Wellington. Kathy Foley, Welcome to the Business of Tech. Thanks so much for coming on. Great to see you in New Zealand.
00:02:51
Speaker 2: It's wonderful to be here. Actually really enjoyed just flying in last night.
00:02:55
Speaker 1: You're visiting DoD Wall's people here. Robinson Research Institution also involved in you were the Chief Science Advisor for four years and spanned two Australian governments Scott Morrison and then Anthony Albanesi administration. So that would be interesting to the political elements of science funding and that, so maybe we can touch on that. But really, Keen, nineteen eighty five you joined CSIROS. That's a forty year career at CSIRO, this incredible organization at the center of science in Australia, and you were a researcher before that as well, have done everything from fundamental research through to you were a chief scientist off CSIRO and now on the board off IT. It take us back to your early days of science. What got you into science and the sort of area that you sort of specialized in early on.
00:03:46
Speaker 2: Well, I guess I've always been interested in science, so just personally, I'm not good at spelling in English and all the sorts of things that young girls are meant to be, especially coming from a Catholic comment school. So science was my happy place, along with math, and I just found it. I was encouraged by teachers at school and always thought it'd be great to be a scientist, but not knowing any because I come from a middle class professional family. My dad was an accountant, my mum was an architect, so back in the sixties and seventies that was pretty unusual. So came from a pretty privileged background, but I didn't know science. They all thought I was a bit weird and I was going to be a school teacher. But when I was at university, I was really encouraged and ended up doing this sorts of things to do honors year, won a scholarship, did a PhD. I applied for a job in the newspaper and got one at CSIRO. Was what would be called a post doc, was called research fellow. It was a three year job and then eventually it was extended, and then I applied for an indefinite appointment in CSIRO, which by the way, I got when I was seven months pregnant back in nineteen eighty nine, which is unheard of, and that having a secure job meant that I was able to really pursue a career.
00:04:57
Speaker 1: And what was your main research focus you joined CSRO.
00:05:01
Speaker 2: So when I started CSRO is actually working on amorphous metals and magnetism. I had done my PhD in night Tried semiconductors. Now night tried semiconductors are the materials that are in white light emitting diodes. And when I was doing that work, I was one of the first researchers working on it, doing very early fundamental work, and that eventually led to other people published papers.
00:05:23
Speaker 3: Other people in Japan.
00:05:24
Speaker 2: Took it up, and thank goodness, we've got white light emitting diodes now because they're big energy save us.
00:05:29
Speaker 1: In the eighties here those opto electronics. You're working on things that go into bicodes, your blu ray players.
00:05:37
Speaker 3: So well that they were things where that.
00:05:41
Speaker 2: The applications of something like a white a light emitting diode and the whole photonics that was really critical. And I suppose the thing which was interesting was I was interested in solid state and then when I went to CSRO, I worked in in magnetism and then in eighty six eighty seven there was a discovery ofhigh temperature superconductive so I was selected to join a team to work on developing the material making devices and from that took very new discovery which was done of course in other countries, but got the Australian version of it. We got to a point where we developed a device that can detect very small magnetic fields and that can be used from anything from measuring your heart or your brain through to eventually mineral expiration, which is where we commercialize the system.
00:06:28
Speaker 1: Oh yeah, and obviously Australia's ground zero for that sort of stuff. So Kathy, take us through that. How you do that? How you can sort of basically see through the Earth's crust using these super conducting sensors.
00:06:41
Speaker 2: So a superconducting sensor just measures magnetic fields, and we forget we liven on a big bar magnet the earth. So North and South Pole, which everyone's familiar with. What we were doing was at that time to working with PHP and originally we were developing a device to detect defect in steel because at that stage It was also still manufactured before they spun it out to bloscope, and we detected with a very preliminary device. It was pretty one of the first squid devices made using this high temperature material. And high temperature I should say it means it was cool with liquid nitrogen, not liquid helium, so minus two hundred degrees it operatesor BHP got us to present that to their annual review of all their research they did within the company back then in the late late nineteen eighties, and they said, oh, this is really interesting. We've been trying to get one of these devices to work for mineral expiration. And the idea being that if you put a big loop of wire on the top of the surface of the earth, pulse a current, and when you pulse the current through a wire, it creates Eddy currents in everything, and then those Eddie currents have their own magnetic field, and when you turn their current pulse it the current happens in the Eddy current happens, and if there's a conductor or all body, and then it dies away. And what we were able to do was use the magnetic sensor to detect that dying Eddy current in an all body and how slowly it died away, gave you an idea of how deep it was and also what the quality of it was, and you could move this across the top of the Earth and be able to map out up to two kilometers below the earth in some cases not always.
00:08:28
Speaker 3: But the other thing that's really important is.
00:08:29
Speaker 2: Australia got that old red soil, which everyone knows that is.
00:08:33
Speaker 3: Terrible for mineral expiration from the surface.
00:08:36
Speaker 2: Because it's like having an RS screen there, so you can't it's very conducting. They call it a conducting overburden, and so these systems could see through that because of the we were measuring the magnetic field directly, as opposed to other techniques which measured the variation of the magnetic field with time, and they just screwed up with everything that was in the environment. And as a consequence, we're able to see things which couldn't be seen previously.
00:09:03
Speaker 1: And you know that led to the mining companies having the ability to much more easily see, Okay, there are deposits, they might be quite deep, and there's a lot of really deep deep mining in Australia, but they could actually identify it, and so in terms of speeding up the discovery of mineral resources and there I mean that created billions of dollars in value.
00:09:25
Speaker 2: Yeah, So to be honest, some of our work, you know how a mining industry, like any industry, has its high as and lone and when it was in a low we actually started doing some of our research with Canadian mining companies. And there's a company back then which has changed its name multiple times. It probably doesn't even exist anymore. But up in the Raglan in the Polar region, they got to a point where they're looking for nickel sulphides and they reduced their exploration costs by about thirty percent because they could go through and get the shape and the depth and then be able to drill holes to get know where it was. Because usually go through into a map, then you go through and do drilling, and the drilling is very expensive and quite often the drill holes tell you nothing. But they were able to every time get it right in the center of where they needed to find the order posit, and it meant they could get into mines much faster.
00:10:21
Speaker 3: An example happening.
00:10:22
Speaker 2: With BHP with a silver mine up in Cannington in Queensland, and they again they had this was We didn't discover that mine, but we were just used as a trial and they thought it was too that it was two separate loads or all bodies next to each other, and they were about to drill in between them. No, sorry, they thought it was a single load. I'm not going to drill down the middle. But we showed it was two loads, and if they drilled, they would have gone right through the middle of it and that would have missed.
00:10:52
Speaker 3: Both of them.
00:10:53
Speaker 2: And because they said let's just move it a certain distance, I went through the middle of the of the silver deposit. It meant that they found it was a really good silver deposit. They're able to delineate it really carefully just with that system, and it brought the mine on site eighteen months early. And back in their nineties everyone forgets about. The mining companies had difficulties. They invested a lot into copper in Chile and BHP wasn't doing very well. The first shipment of Cannington silver from that mine, which we help bring online eighteen months early, I paid their salary bill one month.
00:11:29
Speaker 3: So you know, these things have a flow on effect.
00:11:32
Speaker 2: Where a technology that started with me playing around with single grain boundary doing fundamental work led to know, really supporting a company to be financially viable in a downtime, helping things come online fast. Now got a life of its own. There's about thirteen land M systems and they're used commercially, even though it's old technology and now looking to be upgraded with a whole lot of new, up to date quantum stuff. It is a quantum device. It's one where we really need to upgrade the electronics. And I know I'm not part of my old team are now working on upgrading that. But what we've seen is it's delineated or discovered billions of dollars worth of minds.
00:12:13
Speaker 1: That's incredible and sort of around the same time, some of your colleagues and another part of CSIRO were working on radio telescopes and some of the technologies they came up with to facilitate their research underpins what we use as Wi Fi.
00:12:29
Speaker 2: Now, that's a really interesting story because it goes back to nineteen eighties, late eighties where CCRO used to be in the early eighties a university without students. You could describe it as McKinsey's consulting company came through at the request of the government to do a review and they said, look to be more engaged with industry.
00:12:49
Speaker 3: You need to pull thirty percent of.
00:12:50
Speaker 2: It's finding a way and make it earn that money by engaging with industries. So you can imagine doing it overnight in a budget cycle was catastrophic for the organization. But over a twenty year period we finally learned how to do that and engage. Because csro's purpose is to solve the greatest challenges to help Australia this successful country. But we've always had a strong astronomy aspect in it, even though it's seen as fundamental work. Australia's in a really good place on the Southern Hemisphere. It's quite electromagnetically. It's radio astronomy that it's involved with, so it's got really good and ability to design antennas and all the electronics and signal processing that goes with that. And that was a consequence of the During World War II CSRO there wasn't a defense research organization and and CSRO did the government's defense research and they developed a version of radar and when well the warfare, he said said, what do we do with is now? Let's point at the sky and that was radio astronomy being discovered by Ruby Payne Scott. You know, the team there said what can we do. We've going to earn some money, let's do some solve one really big problem. Wouldn't it be great if you could actually work out how you can separate out signals so that you didn't have to have wires and have a wireless communication. And so they did that saying well, we've got this background of fundamental work and experience, how do we actually turn that to solve this particular problem. So it wasn't a Eurecam moment. It was actually a project which over a very long period of time. These things don't happen straight away. And there's a great picture which Bob Freighter puts he called it's a cosmic geneology. He's got things going everywhere, were educating people with PhDs, having different different research projects that sort of built up the capability and eventually they came up with a solution.
00:14:36
Speaker 3: It was patented.
00:14:37
Speaker 2: But the thing was really important was engaging with international standards. So Dave Skillen, who was a mcquarie University professor in electronics who was collaborating with this team because he was part of the team that educated some of the researchers that developed the technology, and he's spun out a company called Radiata. It was brought up by Cisco Systems and then it commercialized Wi Fi in the USA. And the thing was really critical was they really pushed hard for it to be accepted as the Tripoli standard. Thank goodness he did, because it's a high quality capability, which meant that you know, when you go overseas and you've got to have different powerpoints for plugs for different things, or even with our mobile phones, you've got to use different jacks. Imagine if we'd had different Wi Fi systems everywhere and every time you get to a different place, you'd have to use a different Wi Fi, I'd be unworkable. By getting that international standard right with the best quality thing our process or technology means that it's been ubiquitously used.
00:15:34
Speaker 1: And the great thing about that, you know, that is the ultimate example. And what you did with squid Off the whole point of CSIRO. And we had at the time the DSII, the Department of Scientific and Industrial Research, which then split in the early nineties into these Crown Research organizations. It was the commercialization of fundamental research. And the great thing about that, you know, for CSIRO is probably still getting royalties from.
00:15:59
Speaker 3: Not because the patterns run out, but.
00:16:02
Speaker 1: For probably twenty or thirty years it would have been a lucrative stream back to the country.
00:16:08
Speaker 2: We had to fight legal battles, so CESRO actually went to court in the US. It was quite controversial at the time to protect the IP and the reason that was important was to show that the rule of law with patenting internationally can be upheld and therefore patents are worth it because they're really only licensed to sue really, so that was really important. But it took a lot of guts, I think to do that, and as a consequence, they went through a whole lot of the different companies who were using that White Fi technology while it was still under patent to therefore get royalties in response, and with that it allowed us to set up a whole lot of different programs across the country. Those funds were followed back into government revenue. What they did were put into a special funding pool, which led to for example, setting up main Sequences, which is a venture capital which is funded by well start off with Wi Fi funds, some federal government money and it's a very successful venture capital, which is a little bit like what Israel did in the seventies. We're invest very early with patient capital. Also bring in a whole lot of entrepreneurialism into the research sector so that you can help commercialize and translate stuff that was set up by Malcolm Turnbull government. And it's been they've had multiple funding rounds. Now it's a very successful, very successful venture capital and it's now the government doesn't put money in because people put money in because it's so successful and it raises it's funding independently, so.
00:17:43
Speaker 1: That model has been really successful. CSIRO is seen as a really important part of the research landscape in Australia. What was it like over sort of forty years of being involved in the organization the ev and flow of polot. It seems that there was always a commitment to fundamental research and spending a decent amount of money. I think Australia spends more on R and D than the New Zealanders as a percentage of GDP, It's probably low compared to Israel in the US, but there's always been that commitment, whether it's been a left leaning or a right leaning government.
00:18:20
Speaker 2: Some people would question that at the moment, the government's undertaking a strategic examination of research and development, and what we've found is that Australia has the highest investment in research from the university sector because of their international students.
00:18:36
Speaker 3: It's the highest in the OECD.
00:18:38
Speaker 2: The government investment is about a little bit below average. It has dropped a bit in recent times in real terms a bit under two percent, and someone might even have dropped even.
00:18:49
Speaker 3: More than that.
00:18:50
Speaker 2: But there's the biggest problem for us is the industry investment in research development or business expenditure and research development is the lowest in the OECIT.
00:18:59
Speaker 3: So that is a huge problems for Australia. Lovet yes, where a.
00:19:02
Speaker 2: Country of small medium enterprises like ninety nine percent most of them have got like seventy percent have lessened to twenty people. So you can imagine their investment in innovation is not where it needs to be and that's a focus on the government at the moment.
00:19:17
Speaker 3: A lot of it is because of it's a service.
00:19:19
Speaker 2: A lot of those small medium enterprises a service, you know, our bars, coffee shops, that sort of stuff. But the innovative companies are beginning to grow and that's why things like quantum has been really important AI deep tech and the recognition that we've had a bit of a bifurcation where you've got amazing research. Australa has always done really well. Everyone talks about hitting you know what is it hitting above its way? That's it punching above its way and it has, but that's where it stayed. And we haven't been so good at transitioning things out of the university sector into turning it into industry. University people being universities industry people in the universe. He even public funded agencies like CESO, there's not much movement between them. And so one of the things that the Turnbull government did in twenty sixteen, and this wasn't popular, He almost lost the election over it.
00:20:12
Speaker 3: He set up in December twenty sixteen the.
00:20:16
Speaker 2: National Innovation and Science Agenda, and he set up main Sequence Ventures investment into Michelle Simmons's quantum computer, setting up the on program, which is an entrepreneurial program which Larry Marshall, who is the CEO of CSR at the time, to try and create entrepreneurialism within scientists and that's been hugely successful.
00:20:37
Speaker 3: And there were some other things as well.
00:20:39
Speaker 2: But the thing that was interesting was the electorate hated it and he almost lost the next election because people saw innovation was going to take their jobs. But holding in there we've seen as a real shift so that we're beginning to see and it's been painful and we're not there yet, but at university professors thinking that where instead of having just an academic perspective, you see, how can they spin out companies, how can they turn their great research into opportunities for creating new businesses. So we've got a remarkable number of startups and the quantum area is the one we're focusing on.
00:21:12
Speaker 1: It Well, that's from the outside has been incredible to watch sort of from the Turnbull government and actually before you know there was significant investments into quantum, but that's really accelerated to the extent that we've had Psygh Quantum, a huge government investment into this one really promising startup that is looking to build quantum computers artificial intelligence as well. And now we've got in the wake of COVID, a big push on advanced manufacturing, clean tech in Australia and cyber a lot of money relative to New Zealand's going into cyber and so you were there as Chief Science Advisor in the Scott Morrison government towards the end of his tenure Albanisi government as well. From your perspective, what explained this sort of ongoing commitment was it that fact that politicians across the aisle realize we've got a problem with our small and medium sized businesses here. They're not spending enough, they're not commercializing science to enough of a degree to shift the needle for the economy. We need to resource this properly.
00:22:16
Speaker 3: Well.
00:22:16
Speaker 2: Look, successive governments have been worried about that, and especially when you're a science advisor, your role is to just provide the evidence, and the evidence is stuck. You know, Australia didn't have much new to the world innovation in its products that it's exporting. If you look at Australia's economic complexity, we are sort of one hundred somewhere between ninety seventh and one hundred and second. It's a Harvard measure saying how complex is your economy? And because we're so dependent on agriculture and on mining, and it means that although we've got deep complexity in our ability to extract them and be globally competitive. What we're not doing is adding value to them, so that we're not realizing it's almost like producing the materials but then shipping it off somewhere else for someone else to get the value from it. And as we see the energy transition, Australia is very dependent on fossil fuels, so we have to transition oury economy. I mean, just to give you an idea of what being one hundred and second is, Yemen, Bikina.
00:23:24
Speaker 3: Faso, Bangladesh.
00:23:27
Speaker 2: Okay, So it sounds ridiculous that Australia should be ranked there, but that's because we've got huge volumes.
00:23:35
Speaker 3: We've been a prostrous nation.
00:23:36
Speaker 2: We've not really had a technical recession for decades. I'm getting on to forty years now, and that's because we've been so lucky that we've been able to use our mineral deposits and basically ship them to mostly China and wreck the benefit from that. So that's possibly made us a little bit lazy as well, and as a consequence, we haven't really had the desperate need to turn our research into dollars.
00:24:04
Speaker 3: But that's changing. We have to really get to.
00:24:07
Speaker 2: A point where if we're going to be a prosperous nation in twenty fifty where we lose at least sixteen percent, which is about between one hundred and fifty and three hundred billion dollars of our exports because of no one's going to buy our coal, our thermal coal, oil gas. We're going to reduce circular economy, econom iron ore, that sort of thing. Even some of the critical minerals used for batteries will be recycled.
00:24:31
Speaker 3: We've got a bit of a runway.
00:24:32
Speaker 2: So how can we make that great research turn into prosperity we like in Australia. Look, if you go through looking at successive governments have recognized this. How they've gone about it has been slightly different, and there's always tweaking around the edges, but saying the quantum areas in some here this week for quantum.
00:24:50
Speaker 3: One of the things is.
00:24:51
Speaker 2: Interesting was when I became true scientists, I raised the issue that with the Prime Minister saying quantum is a really big opportunity. The AI was just sort of beginning and said, well, quantum is. We've got strength in that we've been investing in fundamental research for twenty five years for the istering research Council through numerous centers of excellence, we've funded about a billion dollars worth of fundamental research since about two thousand and we're beginning to see the odd spinout company. There's a real opportunity for us to have an industry. We're one of the best in the world in the research. Let's turn that into an industry. And to be honest, in the four years I was chief signed as we turned it into an industry and there were a couple of things that we needed. First of all, when I was in CSORROW, we did a roadmap to show the value proposition. So Larry Marshall, who is the Chief executive at the time, funded a roadmap being done through an ability to do these sort of roadmaps within CSRO the technoeconomic stuff which is very important. So we're able to get the value proposition and you know, sixteen thousand jobs, billions of dollars worth of increased at GDP is pretty easy. Well, the Morrilton government said let's start doing a strategy and then they lost the election. We got an Albanesi government and then Minister Husick, who was the Minister at the time, said I'm all in and so we had a National Committee Quantum Committee. We developed a strategy and then the Government Department of Industry, Science and Resources had the whole branch of that implementing that quantum strategy. And I guess you had a lunatic chief science like me running around the country sprooking out saying this is really important.
00:26:31
Speaker 3: And if I go back to twenty ten, when I was.
00:26:35
Speaker 2: In the austrain Institute of Physics was saying we're doing their decaybal plants and there's no industry for physics in Australia.
00:26:43
Speaker 3: That was just so wrong.
00:26:44
Speaker 2: What we didn't realize was what it means to take our research. And we've seen a lot of Australia's physics research line up behind quantum.
00:26:53
Speaker 3: Quantum is quite a horizontal.
00:26:55
Speaker 2: It's got photonics, it's got semiconductors, it's got classic quantum computing sensing and things. And so what we've seen is a real focusing down on as a research community saying this is important. People now doing PhDs saying I'm spinning out a company, and some of those companies have been very successful. There's one which came out of University Queensland and these PhD students sold the company for forty million dollars recently.
00:27:20
Speaker 1: So credible is that one?
00:27:22
Speaker 3: Is it?
00:27:22
Speaker 1: Control? Are is another wall?
00:27:24
Speaker 3: No? No, that's some Key Control Control.
00:27:28
Speaker 2: So Key controls another big company. It's it's come out of Sydney University. There's been I think about fifty startup companies, been forty and fifty happening all the time.
00:27:37
Speaker 3: I've lost count credible and so kids are doing their PhDs.
00:27:40
Speaker 2: Knowing where I'm going to spin out a company when I finish this and then partner because it's not like they're building a whole quantum computer. I've got some quantum computers being built, but they realize they're part of the supply chain because there's a big global, big global effort, and so there's there's a need for so many different bids.
00:27:59
Speaker 3: No one place is going to do it all, no one country.
00:28:02
Speaker 1: And I think that's the opportunity for New Zealand. Interested in your view what our relative strengths are both in quantum man and in the superconducting space as well. But we have to remember we're very small. But as you say, there's going to be a big supply chain for quantum computers, quantum sense and quantum communications, So if we can specialize in particular niches that aren't being filled overseas, and I think what you said that works so well in Australia. You know that mapping of what the opportunities are, and I feel in some of these areas we haven't. For instance, in artificial intelligence, we just had a national strategy put out there, but it was sort of criticized because I think there wasn't much depth to it where you were actually saying this is the opportunity for New Zealand. It was they want adoption of artificial intelligence, but they've sort of said we're not necessarily going to be developers of AI, which seems to be a lost opportunity.
00:28:57
Speaker 3: So there's a couple of things there.
00:28:58
Speaker 2: The first one is developing software is really cheap in anyways, so it's an easy way in. But the other is also AI is dependent on training and algorithms and stuff which are very culturally based. Really every country needs to have a version of AI just so.
00:29:14
Speaker 3: It's got its cultural stuff that's in there.
00:29:17
Speaker 2: You've got a strong sort of First Nations culture here as well, So how do you get make sure that's part of your AI training that it means that, and then you've got the whole issues of IP and ownership and that which is a very different cultural perspective. So that New Zealand has been such a leader in Mari culture and adoption and being able to bring knowledge systems alongside more Western approaches, there's something really huge opportunity there to lead the.
00:29:47
Speaker 3: World on that.
00:29:49
Speaker 2: As well as you know just what it is to be in New Zealand, just like it is what it is to be in Australian is very different to what it is to be a Silicon valley.
00:29:57
Speaker 3: Dude, Yeah, that's right.
00:30:00
Speaker 2: Doing their algorithm development, So these sorts of things really are very culturally based because you AI is basically a big statistical model that trains and uses the whole stuff that they can access, which they choose because of the algorithms that they develop to be able to pull out information and from that get a statistical approximation based on what's been going before. So, I mean, when you think about it as extraordinary how humans have been able to create that something, AI has the ability to really have a huge uptick in productivity in so many ways, just even just from able to synthesize information. Here's a whole lot of information. Can you bring it together? And that's where AI can be great. If you're asking you to questions which sort of says how I'm trying to find something new or pull together information if you look at where it pulls it from. It doesn't necessarily pull it from your own area. You can ask it to and there's all different models that you have to learn how to engage with them, and that and itself will be I think a high level professional role is how to actually talk to an AI and put the prompt sense so that you're able to get the best out out of an AI system. That in itself will become a very highly sought after professional role.
00:31:20
Speaker 1: Absolutely, and you've got the national AIC into in Australia, quite a bit of investment going into AI available for startups. The different dynamic you have in Australia is the States and they're all quite competitive as well, so they will put on their own R and D tax incentives and that they're all competing with each other to host labs and that sort of thing. Has that as a chief science advisor because they all have their own chief science advisors as well. Does that complicate things or does that actually improve things.
00:31:50
Speaker 3: Oh, look, it complicates and improves.
00:31:52
Speaker 2: So each state and territory's got a different demographics, different environment, different weather, different industry focus. So even though it looks like you've got a bit of everything everywhere, what you'll find is each state and territory has got their own thing which is appropriate for their area. The Chief Scientists of the States and Territories, along with the New Zealand Chief Scientists or Science Advisor get together regularly the Forum of Australian Chief Scientists, we should say in New Zealand and in fact I believe their meeting in Sydney next week and we became a really close cohort and we're able to share information. But the other is also showing how it works.
00:32:28
Speaker 3: Together and quite.
00:32:30
Speaker 2: Often you can do an awful lot without investment by just making sure you've got coordination, planning and optimizing and where your focus should be so that you're able to turn You know, when you've got a small envelope of money, you've got to work out how do I use it well and get a big leverage from it. And that's always the challenges, saying how can I take this dollar and turn it into five dollars by partnering, by getting others to put money in. And that's probably the biggest challenge for New Zealand is to say, well, how can we levery your investment?
00:33:01
Speaker 3: And quite often.
00:33:02
Speaker 2: Leveraging requires you to just be constant, play the long game. The second is that you just settle and deal with the structures so that then you're able to navigate things so that people aren't having every time they're out contact with you. It's not a new face or a new organization.
00:33:20
Speaker 1: Look, you're meeting our Prime Minister's Chief Science Advisor, John Rosche's relatively new to the position. Any sort of words of advice or thoughts about what worked well for you as chief Science Advisor and your forty years of working at CSIRO. You talked about turning one dollar into five dollars. That's really the remit he has. He comes from an agricultural background and we've done very well in that space. But in terms of the more sort of advanced technologies that you've specialized in, how do we get this right?
00:33:51
Speaker 2: Well, I think the first thing is it's not the role of chief scientists to tell the government what to do. What's really important is to provide the options, evidence based strategic thinking in terms of what if how can we coordinate, bring things together, use a convening power to bring people together to work together. That's what I found worked really well because when I took over, Australia was seems very fragmented and a bit of a mess in quantum to be honest, and very disorganized, and people fighting amongst themselves, and just by being there and bringing people together, working through and saying, look, let's look at the bigger picture, where us against the world, not us against each other within the country, and also having good something to sell, which is so that it's what the last thing you ever should do with the government in my experiences, go out and say.
00:34:41
Speaker 3: I need money.
00:34:42
Speaker 2: What you need to say is I've got a vision and we've got the evidence to show how we can get to that vision over to you, and they'll either say that it's run with it or not. We elect governments, I think you have to always respect, particularly liberal democracies, that you have to respect the people have been elected, They've been elected for a purpose, and what you're there to try and do is to support them in what they were elected for, but making sure that they can see what the options are and what the consequences are.
00:35:12
Speaker 1: What the consequences that are. Having something to sell bottom line is really important. And we've had we've had great academic outputs, lots of research papers.
00:35:22
Speaker 2: New Zealand is an amazing country. When you go back from Rutherford. Oh well dogs see you've got some amazing work in se conducting power lines and tapes and magnets and stuff like that. And what I always say is, you know a fewer bigger things, focus on things where you've got strengths. You don't it to be your things to everybody, but identify where your strengths are and then turn that into global market supply chains.
00:35:52
Speaker 1: And that point about there is a global supply chain in quantum, in AI, in clean tech, and particularly in things like clean tech and manufacturing where the Australian government has said we want to rebuild Australian manufacturing. We want to build EV batteries in Australia, solar panels.
00:36:09
Speaker 2: So not EV batteries but probably stationary batteries.
00:36:12
Speaker 3: Yeah, so I think which.
00:36:15
Speaker 1: Are for power plants and that's sort.
00:36:16
Speaker 3: Of yeah, that's right.
00:36:17
Speaker 2: Yeah, so you know, things on vanadium flow batteries are sorts of things and making the most of some technology. But the thing that I think that's really important is, you know, the strain promises here over the weekend. I suspect that there's real opportunity to for Australian New Zealand to partner more and say let's hold hands across the ditch and be able to see where we.
00:36:39
Speaker 3: Can support each other at bit more.
00:36:40
Speaker 2: And that's what I'm hoping we'll be able to do this week too, because there's some real strengths in New Zealand which we don't have in Australia. So I'm hoping we can in my unofficial capacity as quantum enthusiasts, see how we can make sure that we can link those up.
00:36:53
Speaker 1: Yeah, and helping out Robinson Research Institute as an advisor. I just had around seventy million in it into that organization. So there is ye green shoots happening.
00:37:04
Speaker 3: It's exciting times.
00:37:05
Speaker 1: Thanks so much, Kathy, really appreciate you coming on the business of Tech.
00:37:08
Speaker 3: Lovely talking to you.
00:37:09
Speaker 1: Thanks, thank you. So there you have it, some great insights from Kathy Foley. Australia, as Kathy pointed out, has a bit of runway. Thanks to its vast mineral wealth to transition its economy away from fossil fuels, but it faces many of the problems that we do. Most businesses there are small and medium sized, so it's hard for them to invest a lot in R and D and cutting edge technologies that will define the twenty first century. Australia is reviewing its approach to R and D to address some of the issues holding back innovation in Australia. That's a process we've just been through. The key takeaway from Kathy from me is that areas like quantum tech require a complex supply chain. No company or country can do it all themselves, so that's an opportunity for New Zealand. But as she said, you know, being really deliberate in knowing where you can add value to that supply chain and being able to articulate that to the government when you ask for a taxpayer dollars is absolutely crucial. The Robinson Research Institute were obviously really successful at that. Recently they got seventy million dollars in funding for their superconducting and magnetic research. CSIRO has been successful in making the case for investment in the areas like quantum cybersecurity and AI and has done a lot to improve the relationship between the research sector and Australian businesses, so there are some useful pointers there as our own reorganized research sector with its new remit of supporting economic growth starts to take shape. Thanks for listening to the Business of Tech. If you found Cathy Foley's insights on innovation strategy, commercialized and cross tasmin collaboration as interesting as I did, make sure to share the episode and subscribe if you haven't, on iHeartRadio or your favorite podcast app for more deep dives into the business of tech. Next week, what's going on in tech recruitment at the moment as AI becomes pervasive in software developments, and what happens when AI is tasked with analyzing your job application. That's next Thursday. I'll catch you then.
