Stretching the System: Why Australia’s Agricultural Innovation Model Must Evolve Beyond Its Original Design

John H Howard, 1 July 2025

Australia’s Rural Research and Development Corporations (RDCs) are internationally recognised as a successful way to promote innovation in agriculture.

Since their establishment in 1989, they have helped producers respond to global market pressures by investing in new technologies, improving production efficiency, and reducing sectoral fragmentation. In many respects, the RDC model remains a world-leading example of industry-government co-investment in applied research.

But the conditions that justified and sustained this model are no longer sufficient. The contemporary policy environment places demands on agricultural innovation that extend far beyond the initial remit of productivity and competitiveness. Climate change, biodiversity loss, dietary health, emissions reduction, biosecurity threats, and equity issues throughout the food system now shape what society expects from the system. The problem is not with the RDCs themselves, but with the presumption that they can deliver on this expanded mandate without system-level adaptation.

From Structural Critique to Functional Framing

A recent CSIRO Paper addresses this emerging misalignment. Rather than critique the existing system in structural terms—by asking who holds which roles, or whether certain institutions should be reformed—the authors argue for a shift in framing: from structures to functions. This perspective focuses on what the system must do to meet evolving national priorities, regardless of which actor performs which role. It is a systems-level diagnostic that opens space for constructive, forward-looking reform.

Historically, the RDCs were designed to overcome a specific set of challenges. These included fragmented research funding across states and sectors, weak coordination between public and private investment, and inefficiencies in the national R&D landscape. Their creation reflected the logic of the time: align interests between industry and government to fund strategic R&D for a globally competitive sector. By that measure, they have delivered significant returns.

However, the sector’s operating environment has changed, and with it, the need for innovation. The scope of “innovation” has widened to include not only economic outcomes but also environmental stewardship, community wellbeing, and social inclusion. The sector is being asked to deliver on sustainability, equity, and public health goals that were never part of the original brief. The core insight of this CSIRO work is that this is not evidence of poor performance but of functional mismatch. The system’s design assumptions are being tested by the complexity of new national agendas.

Defining What the System Needs to Do

To advance the conversation, the team developed a framework centred on the concept of innovation system functions. These functions represent the capabilities and processes that an effective innovation system must possess, irrespective of institutional form. They include familiar tasks such as generating, sharing and applying knowledge, setting research priorities, and maintaining agility in the face of uncertainty.

The functional framework also draws attention to emerging demands, including coordinating across sectors, negotiating and articulating a shared direction, monitoring progress against shifting objectives, and enabling distributed learning across actors and domains.

By re-imagining the system in terms of its required functions, the analysis avoids a common trap in innovation policy: conflating organisational form with system performance. Rather than asking whether the RDCs (or any other body) are doing enough, the more fruitful question is whether the system as a whole is capable of performing the functions needed to meet contemporary challenges.

Changing the Terms of the Policy Conversation

This shift in analytical lens also reframes policy debates in important ways. Too often, reviews of agricultural innovation systems have focused on governance, accountability, or role confusion. Such critiques, while valid, can become circular, failing to generate forward momentum. The functions-based approach offers an alternative: a structured and inclusive way to engage diverse actors in conversations about what the system should do, not merely who should own it.

Importantly, the CSIRO team did not develop this framework in isolation. Over the course of 18 months, they engaged a broad community of more than 65 innovation experts from Australia, New Zealand, and internationally. This process of collaborative sensemaking revealed a high degree of conceptual alignment across jurisdictions. Regardless of institutional arrangements, the underlying need for dynamic, adaptive, and cross-sectoral capabilities is widely recognised.

Yet translating conceptual coherence into operational change remains a challenge. Innovation systems are made up of practical people, shaped by incentive structures, funding rules, and policy legacies. Abstract frameworks are necessary but not sufficient. What matters is the ability to embed these insights in practice through narrative, dialogue, and experimentation.

Practical steps to support future innovation policy

The CSIRO paper identifies several areas in which the capabilities and infrastructure enabling constructive dialogue about future innovation policy can be improved:

• Embedding policy expertise within innovation networks. Keeping policy design connected to research and practice allows for ongoing refinement and responsiveness. This requires investment in capacity and relationships, not just strategies.

• Facilitating cross-portfolio engagement. Agricultural innovation can benefit from greater integration with other sectoral innovation systems and efforts to coordinate the national innovation system. Its outcomes intersect with climate, health, education, infrastructure, and Indigenous policy. Mechanisms for collaboration between portfolios and sectors can be shaped to reflect this interconnectedness.

• Instituting routine system reporting. Just as financial systems use balance sheets and performance indicators, innovation systems need regular reporting on their health, adaptability, and alignment with national goals. This is not an audit exercise, but a learning one.

• Designing for function, not form. Policy design should begin with a clear articulation of the required functions, followed by an exploration of the configurations that best enable them. Form follows function, not the reverse.

• Widening participation. Inclusive innovation systems draw on the knowledge of stakeholders often marginalised in traditional research planning—such as First Nations communities, young producers, and food system innovators. Broader participation enhances legitimacy and creativity.

• Enabling public sector leadership. The public sector can be an active, creative, experimental agent in system reform—willing to trial new mechanisms, learn from failure, and build public-good capabilities that markets alone will not deliver.

These recommendations are not prescriptive solutions, but principles to guide iterative design. They reflect an understanding that innovation systems must be continually adapted, not reinvented in whole. The report explicitly rejects the notion of “grand designs,” instead favouring homegrown systems with embedded feedback loops and mechanisms for continuous learning.

Framed this way, the question should never be whether to preserve or discard the RDC model. Rather, it is how to evolve it, and build on it—recognising its strengths while acknowledging new capabilities needed in a changing operating environment. There is no virtue in nostalgia, nor in rupture. The imperative is to build on what works, stretch the system to accommodate new demands, and create the conditions for generative adaptation.

Toward a Responsive, Legitimate and Future-Facing System

The CSIRO work represents a thoughtful and grounded attempt to advance this conversation. It resists both simplistic critique and technocratic optimism. Instead, it offers a nuanced middle path: one that honours past achievements while facing forward with curiosity, clarity, and a commitment to experimentation.

Australia’s agricultural innovation system has long been a national asset. Keeping it in top shape means thinking about it as more than a legacy structure. We must think about it as a responsive, functionally agile, and socially legitimate system, capable of addressing the full scope of what the nation now requires from its food and fibre industries. This demands a shift not just in design, but in our mindset.

Selected further reading

Australian Government. (2021). National Agricultural Innovation Policy Statement, https://www.agriculture.gov.au/sites/default/files/documents/dawe-innovation-policy-statement.pdf

Productivity Commission 2023, 5-year Productivity Inquiry: Innovation for the 98%, Vol. 5, Inquiry Report no. 100, Canberra, https://www.pc.gov.au/inquiries/completed/productivity/report/productivity-volume5-innovation-diffusion.pdf

Hall A, Janssen WG, Pehu E, and Rajalahti R, (2006). Enhancing agricultural innovation: how to go beyond the strengthening of research systems (English). Agriculture and rural development, Washington, DC: The World Bank. http://documents.worldbank.org/curated/en/864351468325269468

Hall A, Rajesh GK, Raman S, Castellanos S, O’Dwyer J, Brown S, Hart T, Harris P, Turner J, Kruger H, Nelson R, Burrows S and Leith P (2024) Reframing the conversation on agricultural innovation in Australia. Commonwealth Scientific and Industrial Research Organisation, Canberra. https://research.csiro.au/vsfsp/wp-content/uploads/sites/441/2024/08/CSIRO-agri-food-innovation-narrative.pdf

Hall, A., & Clark, N. (2010). What do complex adaptive systems look like and what are the implications for innovation policy? Journal of International Development, 22(3), 308–324. https://doi.org/10.1002/jid.1690 

Klerkx, L., van Mierlo, B., & Leeuwis, C. (2012). Evolution of systems approaches to agricultural innovation: concepts, analysis and interventions. In Darnhofer, I., Gibbon, D., & Dedieu, B. (Eds.), Farming Systems Research into the 21st Century: The New Dynamic (pp. 457–483). Springer. https://doi.org/10.1007/978-94-007-4503-2_20

Nelson, R., Hall, A., Kruger, H., Gopalakrishnan Nair, R., Scott-Kemmis, D. and Leith, P. (2025). Options for supporting agricultural innovation policy in Australia. Valuing Sustainability: Future Science Platform. CSIRO, Australia.