As the federal government calls for submissions on how to improve the country's commercialisation of research, Bionic Vision Australia has had to prioritise its focus. It will now concentrate on low-vision prototypes.

Their holy grail - a high-acuity bionic eye that would allow the blind to read large print and recognise faces - is likely to be shelved within months as there is not enough funding to get through trial stage.

"We're just about to fall into the valley of death," said Melbourne University physics professor Steven Prawer, head of materials development for the high-acuity bionic eye.

"That's where governments abandon research because they consider the research to be done, and don't recognise the need to support the researchers over the valley of death and into the commercial world."

According to a discussion paper on boosting the commercial returns from research, released by the federal government and open for submissions until Friday, Australia's low rate of capitalising on publicly funded research is due to an "insufficient transfer of knowledge between researchers and business".

Australia ranks second last and last out of 30 OECD countries for the proportion of large, small and medium businesses collaborating with universities and research institutes on innovation.

Federal funding for the bionic eye project is set to run out next year. However, Professor Prawer said for business to back the project, researchers had to prove they had a product - and that meant getting the funds to push the device through testing.

"We will hobble along for the next six months and then the funding will finish," he said. "We will be left with fantastic technology on the shelf that hasn't had the opportunity to show its real capability."

The 256-electrode device uses artificial diamonds, which Professor Prawer said were capable of supporting more than 1000 electrodes.

In addition to being able to stimulate neural tissue, diamonds are also durable and when implanted are rarely rejected by the body.

Using diamonds for both stimulation and to encapsulate the chip of the bionic eye is a unique approach in the fiercely competitive global race to build a functional bionic eye. Read more.