When the Rail Manufacturing CRC closed its doors earlier this year, it spelled an end to dedicated rail innovation and technology funding in Australia.
While the loss has been felt deeply by the industry, the fact is the CRC’s significant gains were achieved against all odds.
A new report commissioned by the ARA has found rail innovation is in decline in Australia, and urgent changes are needed if the $155 billion in rail investment to come over the next 15 years is to deliver a truly modern, responsive and innovative rail network.
The report found rail patents are falling in a market where a lack of national focus and certainty, and wrongfooted procurement processes, have created a culture where innovation is simply not encouraged – and at times impossible to progress.
It has called for urgent action to establish rail innovation as a national priority and clearly articulated the need for a single Australian rail market that replaces state specific approaches with national local content policies.
As the federal government highlights the importance of manufacturing to help create Australia’s path out of recession, there is a real opportunity for Australian rail to embrace innovation and play a greater role in the $362 billion global rail technology market.
To do that, we need a national approach that provides certainty and longevity for the industry.
For all the benefits the Rail Manufacturing CRC delivered, the lack of continued funding beyond its term and relatively low level of public investment compared to international models saw the opportunity under-utilised.
Only 63 cents of private investment on national projects were secured for every $1 of CRC funding.
By contrast, the UK Rail Research and Innovation Network attracts $2 for every dollar of public funding, and Japan brings in 20 times its public funding from the private sector.
They achieve those results because the policy settings are right, the long term commitment is there and the focus on rail innovation recognises the invaluable role of both the public and private sectors working together.
A national approach, tied to clear commitments to invest in research, would help achieve that here in Australia.
The ARA has long advocated for a single Australian rail market to give the industry the scale it needs to invest, grow and innovate.
The report makes it clear that is more important than ever as we look to the future.
Current state procurement processes not only create inconsistent local content policies – making it hard to create true centres for innovation – but they focus on the up front capital costs in making their purchasing decisions.
That means innovations that requires investment up front in order to save time, money and boost efficiency over the life of a project or asset often don’t get to see the light of day.
Public procurement processes also err on the side of caution, calling for like-for-like replacement in many cases.
The private sector may have better, faster, or cheaper ways of delivering on requirements, but these conditions prevent them from being put forward.
Overall, these conditions create a risk averse culture that dampens the willingness of the sector to try new things.
And that is ultimately to our detriment.
Australia has great capability in the rail sector and could lead the world on rail innovation if the conditions were right.
The world-first use of autonomous heavy haul trains by the resources sector in the Pilbara is evidence of that.
Australia’s manufacturing sector features some of the industry’s brightest minds. But their big ideas are more likely to be sent overseas than developed here.
With only one per cent of rail patent submissions coming from Australia in 2019, the only way is up.
This next phase of rail investment is a chance to modernise and innovate like never before.
It is a chance to build new skills and capability in Australia to create jobs and opportunity for the next generation of rail workers.
All we need to do is take action and make rail innovation a priority for all of us.
Finding the fast track for innovation in the Australasian rail industry is available here.