Coordinating the portfolio: Strategy for place-based ecosystems

John H Howard, 12 May. 2026

This Innovation Insight was first published in InnovationAus on 6 May, 2026

Australia’s Industry, Innovation and Science portfolio contains the building blocks of a coordinated approach to place-based innovation. CSIRO’s property consolidation, the National Reconstruction Fund, the Industry Capability Network, and the Net Zero Economy Authority each operate with distinct mandates.

The question is whether they can work in concert around specific places and sectors. International evidence on innovation ecosystems points to a recurring pattern: the most effective ecosystems are those in which instruments of innovation policy, industrial strategy, and place-based development are coordinated around shared objectives.

A companion Insight in this series examines this evidence across a governance spectrum, from market-driven coordination to comprehensive state direction.

Whether Australia’s existing institutional portfolio can be organised to achieve this kind of alignment is now a live policy issue. The Industry, Innovation and Science portfolio overseen by Minister Tim Ayres contains several instruments that, taken together, could constitute the building blocks of a coordinated approach.

These include CSIRO and its property consolidation imperative, the National Reconstruction Fund Corporation (NRFC), the Industry Capability Network (ICN), and the Net Zero Economy Authority (NZEA).

Each of these bodies operates with its own mandate, governance structure, and geographic footprint. Each reports through different accountability mechanisms.

The issue is whether they can be brought into productive alignment around specific places and sectors without displacing their individual responsibilities.

This article examines each instrument in turn, considers what a coordinating focus for innovation combined with industrial strategy might look like in practice, and identifies candidate locations where place-based coordination pilots could be established.

CSIRO property consolidation

CSIRO’s ongoing property consolidation program offers a notable and largely unexamined opportunity for place-based innovation. For example, the organisation is consolidating its Canberra operations at the Black Mountain campus, where the National Agricultural and Environmental Sciences Precinct is under development.

Similar approaches will need to be considered across the current 45 facilities, not least because many are at the end of life and no longer financially sustainable.

These consolidation decisions are currently driven primarily by property management considerations: reducing operating costs, addressing building compliance, and rationalising an ageing estate.

 An Australian National Audit Office report in 2020 criticised CSIRO’s management of its property portfolio, noting that operating costs rose by seven per cent annually between 2012–13 and 2018–19 despite a stated aim to contain them. The consolidation program is, in part, a response to that criticism.

The international evidence, however, suggests that the co-location choices of a national science agency can be a powerful catalyst for ecosystem development when coordinated with broader innovation and industrial strategy.

Germany’s Fraunhofer institutes, for example, make co-location decisions in close consultation with state governments and industry partners, ensuring that research infrastructure anchors broader ecosystem development. Singapore’s JTC Corporation explicitly integrates research facility planning with precinct-level economic strategy.

CSIRO’s property decisions could serve a comparable function if they were informed by ecosystem development objectives alongside operational efficiency.

The Black Mountain consolidation, for instance, could anchor an agricultural technology ecosystem connecting CSIRO’s research with ANU capabilities, Canberra’s emerging technology sector, and regional agricultural industries.

Other precincts could also strengthen connections with industry and universities across national priority areas such as energy and manufacturing technologies, food and agriculture, health and medical and resources value adding.

What separates property consolidation as a cost management exercise from property consolidation as ecosystem strategy is coordination ambition. The buildings are the same; the intent is different.

The NRF as ecosystem finance

The $15 billion National Reconstruction Fund Corporation provides finance through debt, equity, and guarantees across seven priority areas: renewables and low-emissions technologies, medical science, transport, value-adding in resources, value-adding in agriculture, defence capability, and enabling capabilities. A statutory review of the NRFC Act is required by 31 December 2026.

By March 2026, the NRFC had made 26 investments (NRFC, 2026). These include equity stakes in quantum computing firms Silicon Quantum Computing and Diraq, a $200 million hybrid note investment in Macquarie Technology Group for sovereign cloud and cybersecurity infrastructure, and $75 million in aerospace company Gilmour Space Technologies.

These investments are evaluated primarily on commercial merit and alignment with priority areas. The NRFC’s enabling legislation directs it to provide finance for projects in priority areas of the Australian economy.

The board must consider broader economic benefits, including job creation and regional development, but the investment framework is structured around individual transactions rather than ecosystem-level outcomes.

The international evidence suggests that the most effective public investment vehicles also consider how their investments contribute to the development of specific ecosystems and places.

Singapore’s approach, in which research funding, economic development, and precinct planning are strategically aligned, illustrates the potential of coordinated investment.

An ecosystem-aware NRFC would not abandon commercial discipline but would explicitly consider how investments cluster geographically, and whether they can be coordinated with CSIRO’s research presence, university capabilities, and the activities of other portfolio agencies.

The distinction is between a portfolio of individually sound investments and an investment strategy that builds connected ecosystems, with a prospect of attracting knowledge-based global companies.

The statutory review due in late 2026 provides an opportunity to consider whether ecosystem coordination should feature more explicitly in the NRFC’s mandate.

Industry Capability Network as connector

The Industry Capability Network, now in its fourth decade (Industry Capability Network, 2024a 2024b) connects Australian and New Zealand businesses with supply chain and procurement opportunities through its Gateway platform.

With more than 90,000 registered businesses and records showing over $40 billion in business secured for local companies across more than 75,000 contracts, ICN’s strength lies in matching suppliers to projects and building procurement connections.

ICN operates through state-based offices with specialist industry advisers who understand local supply chain capabilities. Its origins in the Jobs Act, designed to ensure local businesses gained access to major project opportunities, gave it a procurement focus that has served Australian industry well.

The Gateway platform holds approximately $400 billion worth of projects and more than 70,000 supplier records.

In an ecosystem coordination model, ICN could perform a more strategic function: mapping local industrial capabilities against the technology requirements emerging from CSIRO research programs and NRFC investment priorities.

Its recent partnership with the Advanced Robotics for Manufacturing Hub (ARM Hub) to address capability gaps in advanced manufacturing through AI and Industry 4.0 training points toward this more integrative role. It could also integrate more closely with the capability building role of the Industry Growth Program.

The challenge is to connect ICN’s deep knowledge of regional supplier capabilities with the technology transfer and commercialisation activities that drive ecosystem development.

In regions undergoing industrial transition, ICN’s ability to identify which local firms could absorb new technologies and which capability gaps need to be filled would be a valuable complement to CSIRO’s research programs and NRFC’s investment decisions.

Net Zero Economy Authority

The Net Zero Economy Authority, established under the Net Zero Economy Authority Act 2024, supports workers and communities affected by the energy transition.

Its three core missions are supporting workers in closing coal and gas facilities to prepare for new employment, helping affected communities to prosper through economic development and investment, and advising government on ensuring the transition is fair and effective.

The NZEA operates in regions where existing industrial structures are being disrupted by decarbonisation, and where new innovation ecosystems may be most needed.

Its Regional Workforce Transition Plans provide a mechanism for coordinating employment and skills support in regions affected by power station closures.

Energy Industry Jobs Plans have already been initiated for the closures of Eraring and Yallourn power stations (Green, 2025).

The NZEA’s investment map, launched in 2026, identifies over 800 Commonwealth-supported renewable energy and research projects across Australia.

This geographic intelligence, combined with the NZEA’s regional planning capabilities, could be linked to ecosystem development strategies that draw on CSIRO’s energy and environmental research, NRFC investment in renewables and low-emissions technologies, and ICN’s capability mapping of regional supply chains.

The Latrobe Valley, the Hunter, and the Gladstone region each face transition pressures that could be addressed more effectively through coordinated deployment of these portfolio instruments than through any single agency acting alone. The NZEA’s regional presence and workforce transition expertise make it a natural anchor for place-based coordination in energy transition regions.

Coordination in practice

The international evidence, examined in the companion Insight on governing innovation ecosystems, points to three design principles for effective coordination. Coordination should be organised around specific places, sectors and technologies rather than operating at a purely national level.

It should involve structured engagement between agencies rather than depending on informal goodwill. And it requires a governance mechanism with sufficient authority to align agency activities without displacing their individual mandates.

An initial step would be to establish place-based coordination pilots in which CSIRO, the NRFC, ICN, and NZEA work together around specific precincts and regions.

Such pilots would test coordination mechanisms on a manageable scale before any attempt at system-wide reform. The institutional question of what body should coordinate these instruments is examined in the final sections of this Insight.

Canberra’s Black Mountain

Canberra’s Black Mountain precinct, where CSIRO’s consolidation is already under way, offers a natural starting point. A coordination pilot could align CSIRO’s agricultural and environmental research program with NRFC investment opportunities in agricultural technology and environmental monitoring.

ICN engagement with regional suppliers in the ACT and surrounding NSW could connect local firms to emerging technology applications. Workforce development could be linked to NZEA’s broader regional planning.

Canberra’s concentration of government agencies, defence establishments, and university research capacity provides a strong institutional foundation.

The city’s emerging technology sector, while smaller than Sydney’s or Melbourne’s, is well positioned in areas that align with national sovereign capability priorities including cybersecurity, space, and quantum technologies.

Tech Central and Western Sydney

Sydney’s coordination opportunity is concentrated in two distinct precincts, each aligned with different national priority areas.

The Tech Central precinct in inner Sydney, anchored by the University of Technology Sydney, the University of Sydney, Cicada and CSIRO’s Data61, is the natural location for coordination around digital technologies, artificial intelligence, quantum computing, and micro and small satellite (MSV) applications.

The NSW Government’s investment in precinct infrastructure and the concentration of technology firms and research capability make Tech Central a strong candidate for an innovation and industrial strategy coordination pilot focused on the digital economy.

NRFC investments in quantum computing firms such as Silicon Quantum Computing and Diraq, and in sovereign cloud infrastructure through Macquarie Technology Group, already cluster in the Sydney basin.

A coordination pilot could align these investments with CSIRO’s AI and data science research, ICN’s emerging capability mapping in digital services, and university research strengths in machine learning, cybersecurity, and quantum information science.

Western Sydney presents a different opportunity centred on advanced manufacturing and aerospace.

he Advanced Manufacturing Readiness Facility (AMRF) provides a rare greenfield opportunity to design an innovation ecosystem from inception, integrating university research infrastructure with industry and emerging partnerships involving the National Reconstruction Fund Corporation and other supply‑chain development initiatives.

Newcastle: Manufacturing and energy transition

Newcastle and the broader Hunter region offer a coordination opportunity that bridges advanced manufacturing and energy transition, connecting two of the NRFC’s priority areas with NZEA regional transition planning.

The University of Newcastle’s engineering and energy research strengths, combined with the region’s existing industrial base in heavy engineering and energy services, provide a foundation for building a clean energy manufacturing ecosystem.

CSIRO’s energy research, particularly in hydrogen and low-emissions technologies, could anchor a precinct strategy linking research, investment, and supply chain development in a region where industrial transition is already under way.

Hunter, Latrobe Valley, Gladstone

Energy transition regions where the NZEA is already active present a third category. In these locations, the coordination need is most acute because industrial restructuring is already under way and the window for building replacement economic activity is time-limited.

CSIRO’s energy and environmental research, NRFC investment in renewables and low-emissions technologies, ICN’s regional supply chain knowledge, and NZEA’s workforce transition planning could be coordinated around specific regional transition strategies.

The Hunter region, where Eraring Power Station closure is planned, is adjacent to the University of Newcastle and has existing strengths in energy technology and engineering services. A coordinated approach could connect these assets with NRFC investment and CSIRO research to develop a clean energy technology ecosystem that builds on existing industrial capabilities rather than starting from scratch.

Other national locations

Beyond the locations examined in detail above, the portfolio coordination model could extend to other cities and regions where CSIRO research precincts, NRFC priority areas, and existing industry strengths converge.

Melbourne and Brisbane, with their concentrations of medical research institutes, university health faculties, and CSIRO health sciences capability, are natural candidates for health and medical technology coordination pilots.

Melbourne’s Parkville precinct and Brisbane’s Herston Health Precinct already exhibit the co-location patterns that characterise effective innovation ecosystems.

NRFC investment in medical science could be aligned with CSIRO’s health research and ICN’s emerging supplier networks in medical devices and diagnostics.

Adelaide’s Tonsley innovation precinct and the defence and space ecosystem anchored by the Lot Fourteen (both now within South Australia’s Innovation Places Framework), the Australian Space Agency, and the Defence Science and Technology Group, align with NRFC’s defence capability priority area.

The concentration of defence primes and a growing tier of small and medium defence technology firms provides a strong base for coordination.

CSIRO’s defence-relevant research in materials science, autonomous systems, and sensing technologies could be connected more deliberately with NRFC investment and ICN defence supply chain development in the precinct.

Perth’s strength in mining technology and resources value-adding aligns with NRFC’s value-adding in resources priority area and with CSIRO’s minerals research.

Hobart, through the CSIRO Marine and Atmospheric Research facility, the Institute for Marine and Antarctic Studies, and the Antarctic Gateway, offers a focused marine science and climate research ecosystem that could support coordination around environmental monitoring and marine industries.

Food and agricultural technology coordination could be developed across several regional locations where CSIRO agricultural research, university field stations, and regional industry concentrations intersect, including the Darling Downs, the Riverina, and the Western Australian wheatbelt.

The common thread across these locations is that the portfolio instruments already have a presence, and the sector strengths are already established. What is missing is the deliberate coordination of these elements around shared ecosystem objectives. The coordination pilots proposed earlier in this paper would test this approach on a manageable scale before any attempt at national rollout.

This article is the first in a series of three that explores innovation and industrial strategy for place-based ecosystems.