R&D for hire

Corporations increasingly buy government expertise

Rebecca Gibson
3 March 2014

6 min read

When developing a new product, many corporations will innovate in-house. Some, however, have transformed their approach and are choosing to capitalize on the abundance of technology, resources and human expertise available in government research and development agencies.

When Australian metal-casting manufacturer AW Bell decided to enter the rapidly growing North American market, the company was faced with a challenge. To tap into the aerospace and defense segments, it needed to improve its traditional investment casting process (a technique for casting alloys using a wax mold), but lacked the technical expertise and equipment to do so. Rather than spend a considerable amount of money and time developing its own facilities and employing additional staff, AW Bell decided to leverage the skills of a research and development (R&D) agency funded by the Australian government.

“Recognizing the need for high-caliber expertise and equipment, AW Bell used the Australian government’s ‘Enterprise Connect Researchers in Business’ initiative to bring the Commonwealth Scientific and Industrial Research Organisation (CSIRO) on board,” said Damien Thomas, group director of business development in Manufacturing, Materials and Minerals at CSIRO, Australia’s national science agency. “Together we developed a new technique for metal processing.”

After partnering with CSIRO, AW Bell developed its aluminum billet equivalent (ABE) casting process, which uses rapid and controlled solidification to form metal parts. “Using ABE, we can produce aluminum castings with significantly higher mechanical properties than those generated with traditional investment casting processes,” said Andrew Meek, CEO of AW Bell, which was named the preferred supplier for two major US aerospace companies after the project. “This enables our customers to design lighter parts. Our manufacturing experience, combined with the expert knowledge of CSIRO’s researchers and the fact that we were able to retain all intellectual property produced during the research stages, made this project very successful.” 

According to Thomas, AW Bell is just one of 1,600 Australian companies and 375 multi-national corporations turning to CSIRO to reap the numerous benefits associated with supplementing or replacing their own in-house R&D investments.




“Government research agencies like CSIRO are well placed in the current era of ‘open innovation’,” Thomas said. “Companies are beginning to realize that they cannot necessarily generate all the good ideas by themselves in their own research laboratories and are increasingly working with organizations such as CSIRO, their customers and suppliers to source innovation, science and technology capability.”


CSIRO is one of many government agencies worldwide experiencing an upward trend in outsourced contracts from private businesses looking to use advanced R&D facilities to enhance their position in the marketplace.

“Companies recognize more clearly than ever that their ability to compete in the international marketplace will, largely, depend on their capacity to innovate and research new technologies,” said Roger Werne, deputy director of industrial partnerships at Lawrence Livermore National Laboratory (LLNL), a security research organization of the US government based in Livermore, California. “Many corporates do not have the fundamental scientific research capabilities to produce this innovation, so they are capitalizing on the technology available in national labs to help them develop more products and increase their competitive position in the market.”

Compact Particle Acceleration Corporation (CPAC) – also based in Livermore – recently developed a four-meter linear particle accelerator by adapting elements of LLNL’s existing nuclear weapons and laser technology. Working with LLNL’s research team, CPAC refined the technology for use in proton therapy, which is used to treat cancer patients. “Through our cooperative research and development agreement, we were able to use LLNL’s team and equipment for specific tasks that required highly specialized expertise,” said Anthony Zografos, chief operating officer of CPAC. “LLNL had invented, or co-invented, many of the core technologies. By simply walking across the street, we had immediate access to resources and facilities that were essential to our work.”


CSIRO, Australia’s national laboratory, has conducted R&D for 1,975 companies, including 1,600 from Australia and 375 multi-nationals.

The particle accelerator is expected to be deployed in various US hospitals starting in 2014. By enabling doctors to treat solid tumors directly with minimal impact on surrounding tissue, the treatment is expected to reduce the tissue damage, compared to current radiation treatments.

“Our partnership with LLNL gave us worldwide recognition and credibility, while allowing us to complete aspects of the development that would otherwise have been prohibitively expensive,” Zografos added. “It was a highly efficient and effective use of our resources and brought a potentially life-saving technology to reality. It would have been impossible for us to complete this project in any other way.”

CPAC’s collaboration with LLNL also provides benefits to members of the public, whose tax dollars support LLNL’s research. “The US government has invested a considerable amount of resources to develop this technology for defense-related applications,” Zografos said. ”As CPAC’s collaboration with LLNL shows, this technology can have practical applications in other fields. In addition to giving the taxpayer access to life-saving cancer therapy technology, we expect to create a significant number of high-paying jobs as a result of deploying this technology. We expect to continue collaborating with LLNL and develop this technology for many more years to improve the performance and reduce the size and cost of the accelerator.”


Choosing to outsource R&D to a government lab with existing facilities and a large funding budget, rather than a private organization with more limited financial resources, also decreases the need for companies to invest in their own laboratories. Many companies, such as US-based metal treatment services provider Metal Improvement Company (MIC), have used this approach to reduce the risk of incurring unpredictable costs.

“National labs like LLNL develop a broad range of readily available expertise and cutting-edge equipment over the years, which is a huge asset to a commercial organization,” said Lloyd Hackel, who worked on MIC’s project to leverage LLNL’s highpowered laser-peening technology to pre-stress metal. Hackel has since joined MIC subsidiary Curtiss Wright Surface Technologies as vice president of advanced technologies.



“In the case of LLNL’s solid-state laser, the US government had spent a large sum of money advancing laser technology for specific national-security applications, so the development had already been funded and was essentially ready for a commercial application,” Hackel said. “It would have been enormously expensive and taken many years for MIC to develop the same technology and expertise.”

The use of such innovative technology, which prevents individual metal components from cracking, allowed MIC to pass on many benefits to its customers. “Using this laser-peening solution, we were able to make the blades on the Boeing 777 and Airbus A340 last longer. The Boeing 747-8 – which can also fly at a higher altitude than before – is now the world’s most fuel-efficient passenger aircraft,” Hackel said.


Established more than 70 years ago in Finland, VTT Technical Research Centre (VTT) is a government-sponsored agency that uses virtual simulation technology – and the specialized experience of its staff members – to help companies improve production processes, reduce costs and remain competitive.

“Organizations do not just need to invest in the right hardware or software,” said Kaj Helin, team leader and principal scientist in the HumanMachine Interaction and Virtual Engineering department at VTT. “They must also invest in people who have the knowledge base to exploit technology and optimize research and development processes to deliver the best possible results – and that’s where national agencies like VTT come in.”

Taking advantage of the knowledge of agency staff members – often leading experts in their fields – helps companies to innovate and extend their own knowledge and technology base, without needing to reinvent existing technology or build and staff a new research lab.

“Capitalizing on CSIRO’s years of expertise and well-managed intellectual property enables companies to increase their speed-to-market by developing existing technology at a faster rate, rather than reinventing innovation, which can take years,” CSIRO’s Thomas said.

For example, when GE International entered into a five-year, AUS$20 million (US$18.9 million) alliance with the Australian science lab in 2010, it was able to leverage CSIRO’s patented intellectual property and develop advanced technology for the healthcare, aviation and energy sectors.

“GE aims to develop solutions to some of the world’s biggest health, environmental and energy challenges, and the only way we could solve these challenges for both Australia and the rest of the world was to capture the knowledge and experience of CSIRO,” explained Steve Sargent, CEO of GE Australia and New Zealand. “Our ‘healthymagination’ and ‘ecomagination’ initiatives are driving real change globally. This investment highlights the role Australian science can play in solving the world’s toughest challenges by delivering affordable healthcare to all and mitigating the effects of climate change with cleaner technology.”

For many corporations, the benefits of outsourcing speak for themselves. As Thomas concludes: “CSIRO and others have many years of expertise and know-how. By working with government funded institutions, enterprises can secure knowledge, form partnerships, gain a competitive advantage within their industry, bring innovative products to the market quickly, and tap into global supply chains. With all of these benefits, outsourcing R&D makes perfect sense.” ◆

Related resources