Australia generates world-class research in clean energy but we are still not good at commercialising that knowledge.
Australia keeps asking why it does not have a Silicon Valley. It is asking the wrong question. We looked at Silicon Valley and saw startup culture, venture capital and risk appetite. So, we built incubators, accelerators and innovation precincts to replicate those aesthetics. That missed the point.
Silicon Valley works because it solved a specific problem: how to transfer knowledge that cannot be written down? The ideas in patents and papers travel freely. But the knowledge that makes those ideas commercially useful, the understanding of what fails and why, still requires proximity to the people who hold it. That is tacit knowledge, gained through interpersonal contact.
Every enduring industrial cluster in history has been a solution to that problem: Sheffield cutlery, Munich engineering, Seoul semiconductors, Cambridge biotechnology. These are not accidents of culture; they are places where the right people were close enough to each other at the right moment in a technology’s development to transfer the knowledge that made it work.
Australia has never solved that problem. And now, with the clean energy transition accelerating, the cost of not solving it is becoming visible.
The frustrating reality is that in several critical domains, Australian researchers are at or near the global knowledge frontier. CSIRO invented the solar cell technology that underpins a significant share of global photovoltaic production. Australian universities produce world-leading research in green hydrogen and battery chemistry. The Future Battery Industries Cooperative Research Centre connects researchers and industry across the critical minerals and energy storage chain. ARENA has funded dozens of projects that represent genuine frontier work.
This codified output is competitive. But what happens once it is codified? The tacit knowledge, the commercial understanding of how to scale, manufacture and deploy these technologies, migrates to the clusters where that expertise is already concentrated. Germany, South Korea, and the United States absorb the value that Australian research generates. We get citations. They get industries.
This is not a failure of ambition or culture. It is a structural consequence of geography, or aptly put, the tyranny of distance. Continental economies share proximity almost accidentally; a German researcher can drive to a French lab, attend a seminar in Amsterdam, and be back home the next day. Australian researchers cannot. The tacit knowledge loops that turn research into industry simply do not reach us at the same cost.
While the Future Made in Australia agenda is headed in the right direction, with public investment deliberately directed at domains where Australia has a comparative advantage, we need to address the tacit knowledge challenge. Three things would help.
First, co-location requirements in Clean Energy Finance Corporation (CEFC) and ARENA funding criteria. Projects above a threshold could include a structured researcher-industry residency component, not a conference presentation, but sustained proximity between the people producing the knowledge and the people applying it. This keeps the tacit layer onshore.
Second, inbound mobility programs targeted at frontier domains. Australia sends researchers overseas constantly. What we need to be better at is bringing overseas frontier researchers into Australian clusters, for extended periods. The tacit knowledge advantage runs both ways. A visiting researcher from a leading German hydrogen lab, embedded in an Australian facility for a year, transfers knowledge that no paper or patent conveys. The Australia–Germany hydrogen partnership is a start. It needs to be systematically extended.
Third, an explicit IP commercialisation condition in Future Made in Australia funding. Research I conducted for my doctoral thesis found that environmental policy alone does not drive new-to-world clean technology investment: firms also need IP protection strong enough to make innovation worth the risk. The two policy levers must work together or neither works well. Funding the research without ensuring that the commercialisation infrastructure captures value domestically is a subsidy to other countries’ industries.
This is not an argument for copying Silicon Valley. It is an argument for understanding what Silicon Valley solved and asking where Australia has the raw materials to solve the equivalent problem for the industries of the next 50 years.
The clean energy transition is the industrial moment of our generation. Australian researchers are already at the frontier in the domains that matter most. We know we can produce the knowledge. The question is whether we can build the infrastructure to ensure the value stays here.
Aneeq Sarwar
Dr Aneeq Sarwar is Senior Manager, Workforce Planning and Policy at AUSMASA and National Secretary of the Economic Society of Australia. He holds a Doctorate in Economics (Innovation, Productivity, and Machine Learning) from Swinburne University. Aneeq specialises in a wide range of economic disciplines including labour markets, skills, property, and productivity.