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Supporting risk-aware research

Friday 11 July, 2008. 9:30am - 5.30pm.
Members Dining Room, Old Parliament House, Canberra

Workshop attendance — open to public

Topic brief

Research is undertaken to deliberately explore the unknown and its outcomes are unpredictable. Research entails intrinsic risk that must be managed, not mitigated – and the best basic research must embrace skilful approaches to risk management. Research risk may manifest in a number of ways including the unpredictability of outcomes, the possibility of “failure”, the nature of research into risk-rich topics such as natural hazards, and the potential that research findings may be accurate but uncomfortably challenge some moral frameworks.

Given this:

• how do we know whether existing federal and state/territory programs support a sufficiently risk-aware research portfolio – both within institutions and across national competitive schemes?;
• how might we improve support for risk-aware research?

The role of governments in supporting research does not sit easily within “output and outcome” focused public policy environments. Even peer review, arguably the best available way to allocate scarce resources to the most propitious research opportunities, may become too conservative and too incremental in character unless the process is deliberately crafted to favour high-risk options. Australia’s move towards compact-based funding for universities raises important questions about the best methods for selecting projects for funding and evaluating the outcomes from basic research. In particular, there is a need to encourage funding allocations that are “risk-aware” but not “risk-averse”, and to avoid penalising those who fail to deliver on uncertain and risky intentions. Concern over the functionality of current approaches extends to the tight timelines provided for research. Longer projects provide greater scope to develop and test new, and perhaps unexpected, hypotheses – and to allow a range of different avenues to be explored.

Accordingly, it is important to explore different ways of handling the selection of research projects and the evaluation of completed and in-progress research. Consideration of these issues is also of relevance to the design of Excellence in Research in Australia (ERA) and of peer-review processes as they relate to both the awarding of research funding and academic publications. These mechanisms impact upon how risk, success and failure are judged. This in turn affects the overall performance of the national innovation system.

Key questions

1. What are the elements of a comprehensive analysis of research project risks and how could this be taken into consideration in project/program selection processes?
2. What can Australia learn from the policies for supporting risk-aware research elsewhere in the world?
3. To what extent would longer-term project timeframes allow research risks to be managed better (e.g. by allowing greater scope for learning from failure)?
4. Should a more incremental risk-based approach be implemented in order to allow sets of “long-shot” ideas to be explored and then selected for further research without locking funding into long-term research contracts (i.e. adopt a system of more frequent evaluation points linked to stop, proceed or refocus decisions – a more flexible approach now used by businesses)?
5. How else might we introduce greater agility (flexibility and responsiveness) into our system of research funding in order to allow emerging opportunities to be exploited more effectively and in a timely manner?
6. To what extent would options-based approaches (such as those being explored by CSIRO) help to select and evaluate research projects in a more risk-aware manner?
7. Should risk-aware portfolio-based rather than project-specific selection and evaluation arrangements be used to offset the uncertainties and types of risk inherent in supporting the full spectrum of research modes (by allowing different risk factors to offset each other)?
8. If portfolio approaches are to be recommended:
   1. at what level of aggregation/scale should they be applied and how should the risk-reward relationship be managed in a public policy context (e.g. taking greater risks to address the most important policy challenges)?
   2. how should risk-aware portfolio-based research balance the advantages of critical mass against the advantages of diversity in managing research risks?