AusBiotech has joined a number of other leading Australian organisations in appearing before a public hearing of the Senate Inquiry into Australia's Innovation System.
Senior representatives of CSL, Deloitte and the University of Melbourne also fronted the inquiry that is considering Australia's current policy approach to promoting investment in innovative industries.
The groups were virtually united in their call for the Government to ensure the adoption and maintenance of policies that encouraged collaboration between industry and academia, and investment in an increasingly competitive global environment.
According to AusBiotech, Australia does an outstanding job of innovating, especially in the early research phase, only to leave a public policy gap that allows discoveries to leave the country before it is able to reap significant benefit.
"Australia already supports the R&D phase of innovation in company settings via the R&D Tax Incentive, but support phases out at the commercialisation point of innovation, at which time Australian IP is vulnerable to being sold, managed or manufactured overseas and the resulting community and economic benefits going with it," it said.
The organisation said the key gaps are the lack of venture capital support for commercialisation and the global competition in tax incentives.
AusBiotech advocates tax reform to widen the availability of investment incentives and consideration to the implementation of a UK-style 'patent box' under which companies commercialising locally developed intellectual property assets in Australia would benefit from a lower corporate tax rate.
It argues the introduction of these incentives would have no net cost to the Government because they would only apply to future investment that would otherwise not be conducted in Australia.
Australia's largest and only global biopharmaceutical company, CSL, told the hearing that Australia needs to take a holistic view to attracting investment, recognising the interdependence of the different components of the life sciences value chain.
In its pre-hearing submission, the company described Australia as a "relatively unattractive location for entrepreneurial manufacturing", highlighting its own experiences and observations as a global company.
It said the principal reason for Australia's unattractiveness is its uncompetitive corporate tax system, which is "exacerbated" by declining access to some important specialised skills, high overall labour costs, location, terms of trade and the complexities of dealing with Australia’s system of government and regulation.
It backed AusBiotech in its call for wider application of direct Government support for investment and the adoption of a 'patent box' system.
Deloitte's Sergio Duchini, who is also a Board member of AusBiotech, told the hearing that direct taxation policies supporting innovation and research are, among others, "critically important and pervasive tools for a government to use to endorse and promote innovation in Australia."
"Developing and supporting a culture of innovation requires viewing innovation as an 'eco-system', an interconnected and co-dependent network of public and private sector institutions, academics, researchers, entrepreneurs, financiers and investors…and it is global," he said.
Deloitte recommended a series of changes to address the current “opportunity gap” in Australia's innovation “eco-system”, particularly focussed on direct support and incentives to attract advanced manufacturing.
During its presentation, the University of Melbourne focussed on current deficiencies in translational research, telling the hearing the Government should support greater collaboration between industry and academia.
"In particular, models should be explored that centre on existing geographic concentrations of expertise, including the co-location of industry and academic partners, and on new programs to provide targeted support to further develop research infrastructure for these precincts," it said.
"In keeping with this, Government should consider the introduction of incentives to improve the transfer of skills and knowledge between industry and academia, by creating a new program that supports academic-industry secondments and leverages the emergence of such precincts."
The University also recommended staff exchanges between academia and industry.
"This includes student internships and researcher placements in industry, as well as industry placements in academia," it said.
The final report of the inquiry is due in October 2015.