That proximity to the reef is turning Townsville into an internationally renowned center for tropical marine science. And with biotechnology fast becoming one of the globe's powerhouse industries, scientists at AIMS (located at Cape Ferguson, 55 km southeast of Townsville) and the city's James Cook University campus are searching the reef for bioproducts that can help agriculture and human health. "The reef is an enormous source of natural chemicals," says JCU research pro-vice chancellor Norman Palmer. "Why synthesize drug compounds if marine plants and animals have already solved the problem?"

It's an approach that suits Queensland's "smart state" aspirations. In 1999, the Labor state government of Peter Beattie embarked on a $150 million plan to reposition the state as a biotechnology hub for the Asia-Pacific. "Research and its outcomes are our future," says Premier Beattie. But Townsville's marine experts say that despite a glowing 1998 report card for their efforts from Federal government chief scientist Robin Batterham, they're not receiving enough investment to bring their research from the benchtop to the marketplace. "It's like gravity," says Palmer. "Things in Queensland still tend to fall to the southeast."

The cocktail of chemicals found in corals has triggered some of the region's most promising biotechnology projects. Snorkeling over the reef one day, Jim Burnell, head of biochemistry and molecular biology at JCU, noticed that coral-rich areas were largely free of seaweed. The university is now co-developing a herbicide based on compounds extracted from coral, supported by $1 million in funding from Melbourne-based biotechnology company Nufarm.

Why do shallow-water corals thrive in a region that has the world's highest incidence of skin cancer? That question led AIMS principal research scientist Walter Dunlap to the discovery that corals produce their own sunscreen.

The result: a synthetic version (said to be more effective and less irritating to skin than current sunscreen lotions) which Sydney-based company Sunscreen Technologies (STPL) hopes to have on the market within five years.

Most of the state-government money being invested in Queensland biotech continues to bypass Townsville for Brisbane and the Gold Coast, according to local scientists. "We're getting bugger-all help in comparison," says JCU's Burnell. AIMS, which is federally funded, is more fortunate-it received an additional $9 million last May for a new biotechnology wing and research vessel. And a benefit-sharing agreement signed with the Queensland government last July gives AIMS the intellectual-property security that international investors seek-and guarantees the state a share of any profits from the institute's research.

The high risks involved in biotechnology-only 1 in every 5,000 new-found compounds becomes a drug-may deter some investors. But Beattie says Queensland's biotechnology policy is about facilitating entrepreneurship, not handouts. That self-help mentality is evident in Bio North, a joint project by AIMS and JCU to commercialize their research discoveries. Townsville's scientists are also working with local business organizations like Townsville Enterprise on plans for a technology park, part of which would be devoted to biotech businesses. But universities "rarely do well running companies," says JCU pro-vice chancellor Palmer: "They have to let their projects go if they want them to really work."