Public research institutions in Australia give me “NICTAtion”

(Nictation = an involuntary eye “tic” … perhaps suggestive of excessive irritation or (and?) personality disorder)

Let me tell you why.

I recently wrote a BRW post on Australia’s Wired Future, where I pontificated about why I think Australia’s National Broadband Network (NBN) is kind of exciting – and even a little bit important. For those of you reading this post outside of Australia and have no idea what I am talking about, simply take my word for it that any public infrastructure project you can think of in your country couldn’t possibly be as politically dysfunctional as our NBN.

I’m actually very bullish about NBN and what it could mean for the country. What I am not bullish about is public research institutions squandering tax payer dollars on marginal research in the ICT space as part of a “push” to create a knowledge economy for the future. In my post I (perhaps unfairly) singled out CSIRO (Commonwealth Scientific and Industrial Research Organisation) and NICTA (National ICT Australia), two public research institutions that have active programs in what could be generally described as “Broadband Economy.” They even collude in something called the Australian Centre for Broadband Innovation (ACBI).

(By the way, don’t go to www.acbi.net.au – you’ll just get a website for Viagra)

I should also say that I am a fairly big fan of CSIRO in many regards. CSIRO has done some amazing work over the years and made fundamental contributions to science and technology from gene therapy to mining technologies (important things like solvent extraction of metals from complex ore deposits) and even Wi-Fi … though its size and ‘corporate’ demeanour has, in my opinion, become a little unchecked in recent years. CSIRO is an example of an organization that could probably contribute a lot more to the economy than it does – but it fails to do so because it has poor governance, a lack of leadership that understands technology commercialization and an almost complete lack of an effective ability to transfer technology out of its hallowed walls into private enterprise.

Certainly, CSIRO’s integrity has come into question a number of times recently, such as the recent DataDot scandal. I’ll also add that building substantial in-house legal teams to sue people isn’t what public research institutions are supposed to be about.

NICTA is also an impressive organization in some ways. It reminds me a lot of the French INRIA (Institut national de recherche en informatique et en automatique), where I’ve made several fascinating visits over the years. They do lots of “neat” stuff – and by the way, I think their current CEO is a pretty awesome guy. The problem with this state-funded science model is that it generally results in technology enhancements that benefit the global body of knowledge but don’t dramatically enhance the domestic economy. NICTA claims a $3Bn annual benefit to the economy, but I don’t believe it.

Both NICTA and CSIRO do valiantly try to transfer their technology into the commercial domain and I will not be so unkind as to say that there have been no successes – there have been. But the overwhelming experience is that it is bloody difficult to get technology out of our public research institutions because they have forgotten that they are funded by tax payer money and they try to behave like corporations that expect to see some kind of off-scale ROI for their “investment.” That is completely not the point of publicly-funded research – the purpose is to get it out there and get people using it. Easily.

The best evidence of the lack of efficacy in transferring technology out into the commercial domain is the fact that NICTA and CSIRO pride themselves on owning equity in companies/spin-outs that have in-licensed their technology (their “portfolios”). This is utter crap. Government organisations have no business owning equity in private enterprise, except maybe bailed banks. In my view, if a licensing deal contains equity as a substantial proportion of the deal – it means that the deal is a lousy deal, usually for both parties. Sure – many licensing deals I have done with public institutions and universities over the years have included some sort of an equity “loyalty” snifter, but that was on top of a fair and reasonable royalty/milestone structure to both parties and should be viewed as upside only.

In fact, there are countless case studies that demonstrate royalty holders (i.e. non-dilutive participants in commercial success) do better out of a deal than equity holders…

… and clearly, nobody wants the corporate governance headache that comes from some public servant messing around with your cap table or possibly (heaven forbid) sitting on your board. CSIRO/NICTA are infamous for both, and spin-out company boards should not be places to park public servants for “prestige” non-exec seats. I should note that in the US, in many states (for example California), public institutions are actually banned or capped on equity ownership and/or participation in the governance of spin-outs.

Too right.

So what does this have to do with NBN? Well, for Australia to get the most out of the advantage we have in early adoption of Fibre-to-the-Home (assuming our politicians don’t screw it up, which is looking quite likely at the moment), we are going to want to have a vibrant innovation ecosystem around NBN. At the moment, this “ecosystem” is taking the form of yet more money thrown at incumbent research organisations – like NICTA and CSIRO. If everyone could agree that they were doing a marvellous job (Wi-Fi lawsuits don’t count) then maybe that would be ok.

But this is not the case.

My argument is not so much premised on an anti-CSIRO/NICTA thesis (though I think it is fair to say that I am not bullish about most … not all, but most … of the ICT research being done there) but rather a belief that to create a real powerhouse of product and service development around the NBN investment, we might want to have a rethink how public R&D funds should be deployed. I think that putting $200m into the hands of highly innovative private sector initiatives on a competitive basis would do more for economic value creation than pumping it into overweight research incumbents.

It certainly couldn’t do any worse. Like ACBI’s ‘Social TV‘ trial. Woop-dee-doo…

We’ve got to separate terrorism from cultural stereotypes

What happened in Boston this week is horrible. I can’t imagine a more pointless loss of life and it was one of those situations where the injuries were particularly psychologically heinous. Ripping the leg off someone who has worked hard to train for a marathon is just perverse – only we humans are capable of something as wrong as that.

I walked across Copley Sq just a couple of days before the blast as I was in Boston on business. In the biotech industry, Boston is a kind of “mecca” and I am there very often. It is a city and a culture that I am extremely fond of, from the expanse of the Charles, to atmospheric Irish pubs (and Boston Irish drinkers) to fanatical Bruin fans and Fenway Park.

Wonderful city and inhabitants … and do not deserve to suffer this way.

But I heard some things the past few days that upset me even more – particularly the expectation that it was an “Islamist” (I hate that term, by the way, it’s completely bogus) group that was responsible. I’ll be saddened like everyone else if it turns out that the Boston Bombing was a further repercussion of instability in the Middle East, or Iraq, or Afghanistan… I am almost hoping it is a whacko white extremist group or something.

During several media broadcasts and discussions I heard comments like “so far, no radical Islamic groups have claimed responsibility” or “the Taliban have denied involvement.” There was a kind of “guilty until proven innocent” timbre behind the rhetoric. I understand that in times of immense tragedy, we need to understand the “why”, but this is not acceptable.

Terrorism is a growing and pervasive part of our society, not because of Islam – but because of economic loss, poverty and disparities between the rich and poor. Yes, there will always be nutters, yes there will always be some evil person with a burning desire to cause harm. But the vendetta against “western” society is not about religious ideology, it’s about wealth and who does or does not have it. It’s also worth noting that despite the tragedy of Boston, terrorism events in the past week that killed and injured many times the number of civilians in cities outside of the US, hardly made headlines at all. The Boston tragedy was a particularly awful situation, but it is also true that we are selective in our acknowledgement of terror and its impact on people’s lives around the globe.

Boston is real evidence that terrorism can take place anywhere and those who want to do harm have a growing arsenal of means at their disposal to monitor an opportunity, circumvent security, target civilians and deliver immense suffering. However, we also cause real harm when we, as a society, react with a set of pre-conceived notions about who is responsible for terrorism and why. If we are not careful we run the risk of unjustified community backlash against ethnic subgroups that is as destructive as the original act of terrorism itself.

While we have North Korea, we’ll never “fix” Iran

I have watched the escalation of events on the Korean peninsula today with horror – plus I have been so busy the last couple of weeks I haven’t had the motivation to blog anything. But tonight I couldn’t sleep and writing this blog entry is possibly marginally healthier than taking a sleeping pill. Ever since my son was born, events in the world have a different meaning to me and the situation has really upset me.

A few years ago I hosted a dinner party in LA with about a dozen friends. Lots of red wine and it went late into the night. At about midnight we started playing a sort of adult party game where someone would postulate a question and everyone had to raise their hand if they agreed/disagreed with the statement or if the statement applied to them. The social contract was that you had to be ‘honest’ and the general assumption in the room was that we all knew and trusted each other well enough that what was said in the room, stayed in the room.

Of course, it was originally initiated on the basis of innuendo – I think the first question was “who has slept with someone of same gender?” I’m sure it was one of my more gregarious and perverted pals trying to visualize who might have had a bit of girl-on-girl action in college… but in truth, it’s hard to keep the smut up for too long and after a while questions started getting more serious and the tone of the evening somewhat sombre. I should add that this was a quite broad cross-section of people – some scientific types, some artsy-fartsy types, a policy wonk from RAND … probably 8 different nationalities and a reasonable socio-economic distribution.

My friend Simon then asked this question – “who in their lifetime thinks that they will see a military or terrorist nuclear event directed at a civilian population.” There was a pause and everyone in the candlelit room looked around uneasily at each other. After an uncomfortable 3 or 4 second silence, everyone’s hands slowly raised in almost perfect synchronization.

It was a very dark moment.

Tonight I feel that darkness again.

However, this time I am alone as I feel this deep sense of foreboding. This further upsets me because instead of being with my wife and my son, I am by myself in a hotel room far away from them. If something dramatic happened in the world tomorrow, I would have an epic journey to be reunited with them, assuming I had the opportunity to do so and the Earth isn’t transformed into a blast furnace. I’m also far away from a lot of friends and people I admire in South Korea, and while this threat has been real for a long time, I can imagine that Seoul’s often frigid April air has a more intense chill tonight.

I believe that Kim Jong-Il was, without a doubt, an evil man. He propagated the terror and isolationist policies of his father, much in the way that a son might be groomed to continue a “successful” family business empire. Indeed, in many ways he perfected the vision of his father with an additional parameter that failure of the model of repression was simply not an option. Fear, poverty, control, isolation and propaganda has clearly successfully controlled a poor, ignorant and possibly amoral population (at least at the elite level) – without a functional equal since Hitler. It is my view that technological “supremacy” in the form of militarization and especially the nuclear program, was a cornerstone of Kim Jong-Il’s regime of fear and control.

To extend the family “businesses” analogy, Kim Jong-un is the third generation … and we all know what that means. In general (with few notable exceptions) the third generation lacks the values and the vision of the first generation. In general (with few notable exceptions) the third generation lacks the ideology and commitment of the second generation. In general (with few notable exceptions) the third generation will fail the “business.” Kim Jong-Il was a master of keeping the world on its toes for 17 years. His son may have inherited his DNA but probabilistically lacks his resolve.

Therefore the scenarios are:

1) he fails to maintain a grip on the state and it internally fails, resulting in a civil war or some kind of revolution. This has been predicted for too long for us to be hopeful about it happening fast but in the limit, it’s a reasonable expectation. Far more powerful and successful regimes have crumbled.

2) he fails to engage with the international community in a predictable way and failure is driven by extrinsic events – like war or sanctions. I suppose, in a sense, this has always been happening but if China were to abandon its “little brother” then it would dramatically accelerate.

3) he opens up the country to the world as a young, new leader who will be revered by his people in a way that his father never was. There would be a Nobel Peace Prize in it for him and prosperity beyond his wildest imagination if South Korea and China had anything to do with it.

4) he rationally or irrationally self-destructs the regime, taking as many people as he can with him.

We’ve clearly seen little evidence of 3). 1) is happening slowly but not perhaps fast enough. We can only wish for 2) but China’s continued immoral support of North Korea through food, energy and aid prevents this. Sure, it’s great that someone has effective diplomatic ties with Pyongyang – but surely diplomacy is one thing and inadvertent protection of a regime an altogether different matter?

It is my view that 4) is the most likely situation and I believe that Kim Jong-un was programmed from birth by his father to be the self-destruct button. Why? Because his father – lacking the vision of the first generation, but utterly committed to the values of his father, would never have left his desires for the future to chance. A combination of his greed/opulence, lack of positive leadership and militarily-enforced control (true cowardice) to oppress his own people, makes me feel that he would never have risked “pulling the trigger” on destruction in his own lifetime, but not left it to fate either. Kim Jong-un is robotically as much a part of a North Korean nuclear weapon as a few kilos of weapons-grade uranium.

The international community has been condemning North Korea for a long time. We also have plenty of other conflicts to deal with at the moment – some of which are arguably even more flammable, like Syria. This is a tough time for our world. I believe we will never achieve peace in the Middle East without solving Palestine – no great revelation there. Iran’s belligerency will also continue to have maximal effect while there is instability in the Middle East and Israel remains the perfect target for the Ayatollah. However, I also believe that the international community’s effectiveness in supporting a Middle East peace solution will continue to be severely limited while North Korea is allowed to posture this way.

Why?

Kim Jong-un is not a legitimate leader. His regime is not a legitimate regime. So why are we negotiating with him? Would we negotiate with Hitler if we could go back in time to 1938? Furthermore, because Kim Jong-un is not a legitimate leader, there is no rational reason to expect him to confirm to any rules of engagement, so why do we keep expecting positive negotiated outcomes? What outcome could China’s desire to re-open 6-way talks possibly achieve? The fact that the international community cannot effectively govern a situation like North Korea, which lacks legitimacy, means it also will never have the real ability to deal with a regime that is “legitimate”, albeit intent on destabilization – like Iran.

Why are we waiting for war on the Korean peninsula? Why are we waiting for an insane man-child to dump a dirty bomb on Seoul when two decades of diplomacy have failed? How can the international community even presume to effectively negotiate with Iran if it can’t even shut down this nuisance?

I believe that in order to achieve the next great period of stability in our world and avert the very real possibility of an apocalypse, we need to do three things. Firstly, and immediately, North Korea’s military aspirations needs to be crushed. I admit that this is potentially not a trivial task against 1.2m soldiers, but I am also not advocating a 1945 Hiroshima-class military intervention either. I think that the effect of targeting key military installations combined with a coalition force that willingly includes China will reduce much of the risk of a sustained military response by North Korea, particularly if it is clear that amnesty is possible.

Secondly, we need to dramatically increase and align international pressure on Israel and Palestine to adopt a two state solution. Yes, this would be economically a weaker solution than a single, harmonious state, but that scenario is never going to happen. Boundaries need to be “restored”, people need to be moved, compromises need to be made … and compensation paid. If we can (globally) spend billions bailing out corrupt banks, surely we can spend a few more billion collectively to help relocate a few hundred thousand people living in scrappy townships in the desert. Of course there is huge naivety and idealism associated with these words. I admit that…and my Israeli friends probably think I am a lunatic.

Israel is a great country and the people of Israel deserve our respect, but the 15 million people (globally) that constitute the “Jewish State” can no longer be the tail wagging the dog of instability for 7 billion other people. Is Israel Iran’s only target? No…but it is the biggest target and we need to take it away.

Lastly, give Iran their nuclear capability. Let them have it – in fact, let’s make sure that it is truly world class by being part of its implementation. One way or another they are going to get it, so why not put it out in the open? For 50 years – with great arrogance and hubris – the US, Russia, France and the UK exploded nukes all over the planet (see a rather scary time-lapse here … it’s worth waiting for). China has nukes. India and (also unstable) Pakistan have nukes. Even a lowly Korean despot managed to build something with the destructive capability of somewhere between a “bomb” and a radioactive lab accident. If Iran really does want nuclear energy for electricity and medical purposes, then let’s treat them as a “grown up” member of the international community. Recognize their sovereign independence – but by God, deal with North Korea first. If we don’t, any threat of action for non-compliance is going to be meaningless. Have economic sanctions really worked in Iran, or has it just created a country of people who are more miserable, oppressed and poor … and on the way to becoming a failed state like North Korea?

We can’t let Iran fail – embracing Iran would be the surest signal to our Muslim brothers that we value their contribution to our world. It is poverty and ignorance that incites extremism, not Islam. We have to collectively support the “creation” of Palestine and renew a global vow of development and investment in the Middle East … and Israel needs to take the lead. And, unfortunately, we need to stop this situation in Korea immediately. Export sanctions on yachts and pearl necklaces is not going to solve the problem and the UN needs to show that it can both talk and act with China and Russia firmly alongside the US in a renewed commitment and partnership for global peace.