In this two-part blog entry, Professor of Practice Mark Morris discusses what innovation means in accounting, as well as what a career in accounting entails today, together with Leigh Conlan from Specialist Accounting Services. Leigh is also a La Trobe Business School graduate graduating in 1982 with a Bachelor in Economics.
Mark Morris: I am pleased to introduce Leigh Conlan of Specialist Accounting Services to discuss the recent government innovation statement and incentives that the government has introduced for both private and research organisations in respect of R&D. Leigh, Good morning.
Leigh Conlan: Good Morning Mark.
Mark Morris: Now Leigh, I understand you run a consultancy practice in the R&D space and you advise a broad range of clients.
Leigh Conlan: That’s correct Mark, we run a specialist practice service and in fact, operate under a company name Specialist Account Services Pty Ltd.
Mark Morris: That’s great Leigh. Tell me about some of your clients.
Leigh Conlan: Well we advise a range of clients from small medium enterprises through to large corporations and government departments. We offer a professional assistance to all businesses and research providers in the matters of R&D tax incentives and government grants
Mark Morris: That’s a good segue into my next topic which is around the innovation statement released by the government. What do you think the government’s approach is in this regard Leigh?
Leigh Conlan: As you know Mark, the innovation statement is built on four key pillars but it is important to keep in mind Mark that this is the first time that there has been a comprehensive tying together of all of the research and development governmental policy objectives.
Mark Morris: So can you provide some further insight into the four pillars that the government has outlined in the innovation statement
Leigh Conlan: Well briefly speaking these four pillars as outlined in the National Innovation and Science Agenda statement being ‘Culture and capital’, ‘Collaboration’, ‘Talent and skills’, ‘Government as an exemplar’. Within these pillars are specific areas that the government is targeting. For example the government has set up a $20Billion Medical Research Fund to increase funding in the areas of medical research and innovation. Another example, which may relate to La Trobe, is the government R&D funding of $2.8Billion to universities and the higher education sectors. There are also other funding initiatives such as cyber security innovation and other IT projects the government has initiated. These overall projects form only a snapshot of government funding examples but provides a glimpse of the overall innovation policy and where the government is heading in respect of stimulating research and development.
Mark Morris: So what is the majority emphasis of the government funding Leigh?
Leigh Conlan: Well Mark, the big spend by the government is still the R&D tax incentive which equates to just over $4.5Billion per annum. While the majority of that money goes into business, it should be kept in mind that research service providers also greatly benefit from this policy and there are valuable private business spinoffs from research organisations.
Mark Morris: When you talk about R&D, it’s not all lab coat style research projects is it?
Leigh Conlan: Not at all. We see R&D in areas where you would not ordinarily think that R&D would apply. Research and Development takes place in a variety of forms and industries. Some examples may be building and construction, on farms and of course software development. We have come across a number of private organisations, particularly those which are small scale, which were under the misconception that many of their activities would not be considered R&D when in actual fact they may be.
Mark Morris: Can you talk a little more about such products and processes in this regard?
Leigh Conlan: Well, many organisations are undertaking the development of products using a scientific methodology to determine outcomes and therefore creating new knowledge as a result of these activities. It is also very exciting to see a variety of small to medium enterprises across Australia undertaking a number of dynamic projects which involve Research and Development as well as new commercialisation of innovative products.
Mark Morris: So given you are across many organisations who are at the cutting edge of technology, I assume that you have other areas you advise on?
Leigh Conlan: That’s correct. Specialist Accounting Services is unique as we have technical expertise and we can assist in a variety of capacities including comprehensive advice in the areas of commercialisation, government development and early stage development grants, government support programs and investing in early stage development funding.
Mark Morris: So can you provide more detail in regards to government incentives and programs that you advise in?
Leigh Conlan: Sure, one such program is around the commercialisation Australia program which provides funding of up to $200,000 to assist new organisations and those wanting to test the viability of product commercialisation. Also we have provided advice in relation to cooperative research centre (CRC) project grants as well. The CRC and associated grants is an outcome focused programme designed to support industry while supporting collaboration between industry, research and the community in a competitive framework.
Mark Morris: Have there been many changes by the government in relation to government grants and assistance?
Leigh Conlan: Yes there have been changes in regards to the tech sector that were previously restricted on applying for grants. These have now been removed to stimulate commercialisation and the development of novel IP across a broader range of industries across Australia. We see the government’s focus in this domain is on stimulating new knowledge, local IP and bringing innovative products to market in order to stimulate economic and employment growth.
Mark Morris: So have you seen many examples where universities specifically benefit from the R&D tax incentive scheme?
Leigh Conlan: Yes Mark I have seen this a number of times where universities are providing services to private organisations and where both benefit from the close collaboration undertaken. One such example is one our clients in the ehealth domain where a prominent Victorian university provided research assistance in evaluating IT architecture suitable for gathering information around broad based and large scale health records.
Mark Morris: So this is all research and development expenditure around software and IT?
Leigh Conlan: Correct Mark, we have also been involved with a number of initiatives in the private sector relating specifically to analytics and big data projects.
Mark Morris: Can you elaborate on how these initiatives may provide beneficial outcomes for the private sector, RSPs as well as the general public?
Leigh Conlan: We have seen a number of initiatives carried out by the big four banks in relation to blockchain. The key objective of blockchain is to develop a distributed database ledger which can continuously update records between parties and therefore improve the efficiency of banking transactions.
Mark Morris: That’s very interesting. Do you see any other developments relating to big data in the private sector?
Leigh Conlan: Actually we have also seen developments in the Telecommunications sector where a number of Australian telco’s have been building big data lakes and utilising these data repositories for a number of practical applications such as geolocation, product marketing and improving operational uptime.
For the second part of this interview, keep an eye on the Business Newsroom blog!