Having a world-class health and medical research facility in the Illawarra will result in "brain gain" for the region, according to one of the nation's leading innovation and research advisers.
The incoming chairman of the Illawarra Health and Medical Research Institute (IMHRI), Professor Alan Pettigrew, said the facility would help attract top scientists to the region.
"One of the challenges - and opportunities - facing medical research is that it is now a global endeavour with the level of collaboration and co-operation improving dramatically," he said.
"This provides opportunities to work with the best scientists in the world but it also creates a challenge for us in being able to attract the top talent to our institute.
"By providing the right sort of facilities, we will be striving to keep the talent we have in the region as well as attracting new and exciting people to work here."
Prof Pettigrew - the inaugural CEO of the National Health and Medical Research Council and current adviser to the Chief Scientist of Australia - said IMHRI also provided a range of social and economic benefits to the region.
"The institute works to improve the health of the region and address local health issues though modern research," he said.
"Such research can also lead to cost savings and revenue generation through bringing new medical techniques and devices into the market, generating income for the region through collaborations with local companies."
Prof Pettigrew has joined IMHRI's board to guide the institute's future direction as an independent medical research institute.
IMHRI, which will still work in partnership with the University of Wollongong and the Illawarra Shoalhaven Local Health District, has also welcomed Peoplecare chief executive Michael Bassingthwaighte as director.
Prof Pettigrew said it was a challenging time for medical research, with uncertainty caused by plans announced in the federal budget.
He said the plan to create a $20 billion medical research fund - to be financed from the government's proposed $7 Medicare co-payment - could create community backlash against the very thing it aimed to boost.
"We're not sure if this will get off the ground but if it does there's concerns about what that might do to the attitudes of the community and wealthy donors who might want to support us through philanthropy," Prof Pettigrew said.
Changes to the funding model of universities which may result in higher course costs, he said, could also deter bright students from choosing to undertake PhDs which would again limit research.