Minister for Innovation Greg Hunt discusses creation of federal fund to spur innovation in larger businesses
Just a few days after Australia fell two places down the Global Innovation Index to 19th, new Minister for Innovation Greg Hunt has discussed the creation of a new federal fund to help spur innovation in businesses worth between $20 million and $200 million.
In a speech at the AFR’s Innovation Summit yesterday, Hunt moved away from much of the messaging the Government has used around its National Innovation and Science Agenda since its unveiling last December; rather than an ideas boom focused on startups, Hunt told the audience innovation is “about both old and new businesses”.
“In essence the Industry, Innovation and Science portfolio is about job security and job creation. By that I mean industry is about the jobs of today, innovation is about the jobs of tomorrow and science is about the jobs of the future,” Hunt said.
“Innovation therefore matters to the mechanic in Melbourne, the coffee roaster in Sydney and the mining services firm in Central Queensland.”
The step away from the startup focus comes after an election campaign during which it was made clear by the wider Australian public that the innovation message had not sunk in. Rather, as Labor’s former spokesman for digital innovation and startups Ed Husic warned, the message was in fact alienating people.
Speaking of his Western Sydney electorate, Husic told the audience at a campaign debate on innovation that, outside inner city coworking hubs, the average Australian doesn’t understand what it is exactly that innovation means and how it affects them.
“Them not getting what we’re talking about is bad news for all of us. A lot of those people think that what we argue for is a job killer. They think that tech rips away jobs, and where do they go next?” Husic said.
As such, Hunt’s speech yesterday sought to explain what innovation means for the jobs of Australians working in jobs outside the tech and startup sectors, saying that innovation is “also about established businesses doing things better to stay competitive in a changing environment.”
He said, “Innovation is happening on the factory floor, on our farms, at the supermarket checkout and in the office, in addition to the leading-edge research occurring in our science laboratories.”
In an effort to spur innovation across businesses in different sectors and of different sizes, Hunt said he will be exploring with the sector the viability of a broader National Innovation Fund based on matching debt or equity for mid-stage commercialisation, or businesses worth between $20 million to $200 million. This Fund would invest in businesses rather than providing grants; businesses of all ages can currently apply for a range of grants, with the Accelerating Commercialisation grant able to award businesses up to $1 million.
The Fund, which will be part of the ‘second wave’ of the NISA, would come after the Government’s Innovation Investment Fund was abolished in 2014. Established in 1998, the fund co-invested with VC funds to grow early-stage companies.
Third third wave of NISA, meanwhile, will unfold over the next three years with two focus areas. The first is to make it easier for businesses to actually do business by erasing unnecessary regulation, while the second will look at “helping sectors move into the future.” As part of this, the Innovation and Science Australia board will prepare a plan for innovation, science, and research taking Australia to 2030.
“The board’s strategic advice on priorities and investment for innovation will help lift Australia’s performance and increase our global competitiveness,” Hunt said.
The effort to bring larger businesses across various industries into the NISA fold is sure to be welcomed after almost a year of being left out in the cold. A report from strategy consultancy Crazy Might Work released last December, for example, found corporate Australia felt “overlooked” by the innovation statement.
The report, which surveyed industry leaders across various sectors and businesses including Telstra, Qantas, and the Commonwealth Bank, found that while ‘innovation’ is considered a key strategic pillar by Australian corporates, there is no solid understanding or agreement among these businesses on what it is, how to achieve it, and how to measure it.
Paul Hawkins, CEO of Crazy Might Work, said at the time, “We seem to be taking a view as a nation that innovation lives in startups and research houses, which is quite naive. There is real capability to foster innovation in corporate Australia, which houses some of our best and brightest commercial minds.”
Image: Greg Hunt. Source: abc.net.au