In this post our Principal Consultant, Byron Pakula, shares some thoughts about the design, monitoring and evaluation of innovative research funds.

Across the globe, and particularly in Australia at the moment, more and more emphasis is placed on innovation. “Welcome to the Ideas Boom” is the new tagline for the Australian Governments’ National Innovation & Science Agenda. Innovation is essential for improving the productivity of economies around the world and transforming the efficiency of industries, and sometimes results in the disruption of old for new approaches.

But how do we design interventions to promote innovative outcomes, while ensuring coherent program strategies? How do we monitor and evaluate the investments, ensuring there is an appropriate results measurement system in place? These questions seem complex because there are so many moving parts all intertwined, but we should not shy away from aspiring to have an effective innovation-based investment framework.

Innovation funds for research programs are becoming big business. To consider an investment framework around an innovation research grant program, its important to consider the public goods of early research, public-private partnerships, ensuring a ‘safe to fail’ environment to encourage risk taking, and more. The Australian Government’s understanding of the continuum shows the complexity in going from early stage research to full commercialisation (see the info-graphic below from the ARENA Annual Report, 2014-15).


In designing grants programs, the Commonwealth Grants Rules and Guidelines provide seven principles to consider, which we tailor here for innovation grant mechanisms:

  • Robust planning and design: emphasis needs to be at the forefront of the granting process.
  • Collaboration and partnerships: Co-design and co-creation, particularly with a-typical collaborations and partnerships, are more likely to result in the adaptation or adoption of practices across sectors.
  • Proportionality: The cost of designing an application can be significant, so the potential funding needs to be commensurate with this. Often small investments in research require extensive resources for the design, meaning fewer applications, and less competition and (likely) success as a fund.
  • Outcomes orientation: A grant fund should be linked to a strategic direction and key performance indicators, and grants should be measurable against these.
  • Achieving value with relevant money: Value for money should the innovation or research be successful ought to be established at the outset, even in a risk-taking environment. If the outcome is a change in process, there needs to be a weighting of the value of that benefit to society broadly.
  • Governance and accountability: Governance mechanisms underpin any grants program, particularly in relation to performance and financial monitoring.
  • Probity and transparency: Open and competitive mechanisms must ensure that decisions are impartial, appropriately documented, publically defensible, and lawful. Good selection criteria are critical to this.

Following up on these seven principles is one way to provide clear guidance on the investment framework for an innovation fund. As a consequence the strategic results framework will be the least risky thing you need to deal with in your innovation fund!

What do you think of the seven principles presented above? To join the conversation please tweet your thoughts and tag us (@ClearHorizonAU).