How Tonsley is taking entrepreneurship to the world

When Mitsubishi Motors ceased production in Adelaide in 2008, there was a clear imperative for the South Australian Government to do something innovative and internationally significant at the 61 hectare site. This led to the creation of the Tonsley Innovation District. Business First Magazine speaks with Precinct Director Philipp Dautel about the vision for the precinct and the need for innovation on a national scale.

Business First (BF): What was the vision for Tonsley Innovation District and how has it come into effect? Philipp Dautel: (PD) The vision was to create a precinct that would assist South Australian businesses, in particular manufacturing, in their move up the value chain and into global markets by transitioning to a high value industrial base underpinned by innovation and collaboration.

Tonsley Innovation District is now a world-class destination where entrepreneurs, researchers and businesses large and small, co-locate to drive productivity, innovation and global competitiveness.

The model – based on a partnership between the State Government through Renewal SA, university and industry – delivers high amenity, mixed use urban development, populated with anchor businesses as well as research and training institutions, in an environment that supports entrepreneurial activity and a culture of innovation.

Tonsley’s four focus sectors reflect South Australia’s major economic strengths and opportunities: Health & medical, Cleantech, Software and simulation as well as Mining and energy services.

Tonsley’s success as an innovation district derives from the quality of the relationships between its partners and its unique  design promoting an inclusive destination and allowing for Industry-research and business to business collaborations.

BF: How would you describe the innovation scene in Australia? PD: Innovation is growing across all industries in Australia, shaping the future for businesses large and small. Recent data shows that start-ups and early-stage companies generated nearly all of the 1.6 million new jobs created in Australia from 2003 to 2014.

Traditional manufacturing is declining; the services industry is being disrupted through new digital technologies. What worked in the past is probably not going to work in the future – and that applies to any business, irrespective of the industry they are in.

BF: Where do you think South Australia fits into this landscape? PD: South Australia has long been leading the country through various initiatives led by the State Government such as research and development and Commercialisation Grant Programmes. Adelaide is also

fostering growth in the innovation economy by supporting co- working spaces, accelerators or more physical assets like the $250 million Tonsley project.

Complementing South Australia’s efforts, the federal government now also has a focus on innovation and economic growth through the National Innovation and Science Agenda and the Smart Cities Plan which support productive, liveable cities that encourage innovation, jobs creation and growth.

BF: And how do you think Australia in general fares against other countries? PD: Australia is a world-class destination for innovation with solid foundations in modern infrastructure, high levels of investment and strong intellectual property protection.

The greatest resource for Australia’s innovation scene is our national research capabilities across research organisations such as Universities and the CSIRO. The Australian government spends around $9 billion a year towards science, research and innovation which supports pathways to commercialisation.

In Adelaide, initiatives such as Gig City are providing super-fast internet (10 gig per second) at affordable prices by leveraging existing broadband research network infrastructure across a number of centers. Adelaide is the first international city to join the growing US Ignite Smart Gigabit Communities Program, creating new opportunities for innovative businesses to collaborate and share information with fifteen other Ignite communities in the USA.

BF: What do you think needs to be done to nurture and facilitate innovation and ideas? PD: The key is to link research and industry with Government, where local, State or Federal partnerships can facilitate the process. Importantly, there also needs to be a place for this to happen which must promote and enable collaboration. Innovation needs a home where the creative process is at the centre and where the innovation process is a professional discipline and not a rare, singular event. This is precisely what Tonsley offers, a place where people can meet, collaborate, experiment, ideate and prototype new solutions.

BF: What did you want to integrate into the precinct when it was founded? PD: The foundation was the partnership between government, academia and industry to design a mixed-use precinct that incorporates high density residential, retail, education, commercial and industrial land uses.

This partnership is known as the triple helix and combines physical assets (buildings, infrastructure and land), economic assets (business in the broadest sense) and networking assets (through a culture of innovation).

The result is clustering activity from businesses with a shared industry focus in fields where South Australia has a comparative advantage in an environment that supports entrepreneurial activity and a culture of innovation.

BF: How do you help businesses? PD: The Tonsley advantage is that we can help businesses from start to finish, from assessing their suitability as a business to relocate to Tonsley all the way through to building and construction.

We seek to attract innovative companies to the district across four key sectors: Health & medical, Cleantech, Software and simulation as well as Mining and energy services. Once on site, these businesses benefit greatly from the collaborative approach, providing connections to businesses, research and solution providers.

BF: You also connect these businesses with finance and resources? PD: Tonsley provides particular support for start-up companies and smaller businesses that require assistance. On site groups such as Innovyz and Flinders University New Ventures Institute are active in assisting entrepreneurial endeavours. In addition, some funding is available through Government agencies. Businesses on site can also benefit from professional services providers located at the co-working spaces which provide support and assistance in IP protection, legal, finance and accounting, IT and cloud solutions.

BF: You have mentioned a range of sectors, how does clean or med tech relate or differ to what is happening in mining? PD: It is interesting to find how many ideas are transferred from one sector to another. The question often being asked today is “what can we see in other sectors that we can use in ours?”

High value manufacturing is the overarching theme which crosses over all of these industry sectors. Where in the past we would usually see industry sectors in silos, Initiatives such as Tonsley provide a platform to share and apply technologies across various sectors. In fact, that is often the biggest growth potential for businesses to diversity. A medical sensor can suddenly have a significant positive impact at a mining operation.

One example is Radical Torque Solutions – a company that has confirmed a $2 million investment to expand its operations for astate of the art service, calibration and manufacturing workshop at Tonsley. Radical Torque Solutions are delivering a linkage between gas rigs and mining trucks as well as dental and orthopaedic implant torque tools used by surgeons.

The idea of having multiple high-value businesses from different sectors located on one site nurtures and develops these opportunities almost organically.

BF: What approach do you take to each sector? PD: Our whole of government approach attracts local, national and international investment through agencies such as the Investment Attraction South Australia (IASA), Health Industries SA and similar bodies. These groups have detailed knowledge and experience about key focus sectors and are most successful when we work together. In addition, we engage with industry and potential investors directly from interstate and also internationally.

BF: Who are some of the businesses you have worked with? PD: Siemens Australia: The Government of South Australia has a Memorandum of Understanding (MoU) with Siemens AG (the international corporate parent company of Siemens Australia). The MoU confirms Siemens a strategic industry partner to Tonsley, ensuring the redevelopment of Tonsley, incorporates global perspectives through sharing information on future trends and opportunities.

SAGE Automation: Australia’s leading provider of industrial automation  and  control services with specialist skills and experience in the defence, infrastructure, manufacturing and utilities sectors. They will move to Tonsley in mid-2017.

Azzo Automation: provides energy management, electrical engineering and industrial automation services to businesses across Australia and globally to over 15 countries around the world. They will move into new premises at Tonsley in July 2017.

Hydrix: an advanced engineering design company providing engineering and product development services to a broad range of customers looking to develop, manufacture and deploy niche, high-technology biomedical, industrial and consumer devices.

Advanced Focus: an engineering solutions specialist focussed on sustainable process. They moved into Tonsley in February 2016.

Signostics: design and manufacture portable, hand-held ultrasound devices. Micro-X: develop, assemble and export their innovative, portable x-ray products to companies around the world.

Somark Innovations: manufactures an integrated end-to-end pre-clinical medical research management system utilising visual identification, micro-RFID (radio-frequency identification) technology, data readers, data hubs and software that aggregates and analyses data Co-working space ‘Co-HAB’: opened in April 2015, operated by Innovyz. This facility provides accommodation and support for start-ups, entrepreneurs and small businesses in an affordable, collaborative environment.

Innovyz also offers a business accelerator program and consultancy which provides end- to-end support to help innovators build and grow companies to bring their innovations to market.

Radical Torque Solutions: equipment supplier to global oil and gas companies, specialising in tools that require exact torque applications. Radical Torque Solutions has confirmed a $2 million investment to expand  its operations for a state of the art service, calibration and manufacturing workshop at Tonsley.

Hydroflex: produce a hydrogen- based fuel reduction system for internal combustion engines. The company is originally from San Diego, California USA, and is now operating from the Co-HAB co- working facility at Tonsley.

ZEN Energy Systems: the largest solar energy provider in South Australia.

3RT: 3RT are a company that has been established to commercialise technology to make a composite timber product using waste timber materials. The company’s pilot machine is operational at Tonsley with help from Flinders University’s Centre for Nanoscale Science & Technology (also located at Tonsley).

Tonsley TAFE is designing and making furniture from 3RT’s hybrid timber to help test the material Latent Heat Storage: established a testing facility at Tonsley for their energy storage plant which uses molten silica as an energy storage and recovery media.

BF: Who was the first business partner and how have the numbers grown? PD:  Our early founding partners included vocational training institutions TAFE SA and Flinders University together with the City of Marion Council and State Government. Siemens was also an important early anchor tenant, spearheading the now list of 75 businesses that employ around 1000 workers – a return to the same number of workers that were on site when Mitsubishi ceased operations in 2008.

BF: What do you look for in a business that aligns with the district? PD: First and foremost, we look for innovative businesses that actively want to collaborate with other businesses and research providers. The business has to be inclusive and to a certain extent be willing to contribute to the Tonsley District. Future tenants are assessed through our suitability matrix which identifies how well the business aligns with the district and whether they will complement or contribute to the value chain of other businesses on site.

BF: What have been some of the best innovations you have seen? PD: It’s difficult to pick the best since many of these ideas developed at Tonsley are continuously progressing and evolving. The most recent innovations through Hegs Pegs, Micro X and Voxiebox are exciting to watch. SAGE Automation will be on site at Tonsley from July 2017 and is a company which continually innovates across its focus areas.

BF: What are the long term plans? PD: Tonsley will continue to attract more exciting businesses and research organisations on site that lead to more ground-breaking technologies, innovative products and services and ultimately, jobs of the future for the region.

The redevelopment of Tonsley will see significant development over the next 12 to 18 months including the completion of civil works for the first residential dwellings at Tonsley’s 11-hectare residential and mixed-use development.

The medium to high-density development will deliver at least 850 homes and accommodate approximately 1200 residents. This will add to Tonsley’s vibrancy and activation through the inclusion of additional retail and hospitality services as well as providing accommodation solutions ideal for business and academic travellers to Tonsley.

During 2017, a further 9,000 square meters of tenancy space will be constructed within the Main Assembly Building (MAB) equating to around a third of the total lettable space in the MAB. Industrial land releases will also continue based on a staged roll out of infrastructure and public realm civil works programs.

In the long term, the Government of South Australia intends to divest ownership of all property assets at Tonsley. At the completion of the project delivery phase, the intention is to leave behind a self-sustaining precinct governance model that will have ongoing responsibility for maintaining Tonsley’s culture of innovation, collaboration and entrepreneurial activity.

It is intended that the ongoing governance model will continue the ‘triple helix partnership’ by including representation from the Government of South Australia, the City of Marion, Flinders University, and Tonsley business occupants.

BF: What is the overall goal for the state of SA in this? PD: The Tonsley vision is to transition our existing capacity and capabilities in traditional manufacturing into globally competitive higher value products. This vision is gradually being achieved and is providing a unique  operating  environment for businesses that support commercialisation and a culture of entrepreneurialism, innovation and excitement.

BF: What more do you hope to achieve? PD: Over the coming years, Tonsley intends to become firmly established as an economic growth engine for South Australia as the precinct reaches a critical mass of industry, research, education and commercial activity collocated on the site.

The ambition is for Tonsley to be a globally recognised innovation district, considered on a par with districts such as those in Philadelphia, Netherlands and Sweden.



Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.