1 May 2014 — The Federal Government’s Commission of Audit has recommended the abolition of two key innovation funding programs – the Innovation Investment Fund and Commercialisation Australia.
The Innovation Investment Fund is a venture capital program that supports 10-year innovation funds to develop high growth Australian companies to become globally competitive.
Commercialisation Australia, a competitive, merit-based assistance program, offers funding and resources to accelerate the business building process for Australian companies, entrepreneurs, researchers and inventors looking to commercialise innovative intellectual property.
Another article on a separate Senate inquiry being conducted into Australia’s innovation system, makes clear why this move would be bad news for Australia’s sustainability and productivity.
“Innovation will be a fundamental part of achieving sustainable outcomes in the built environment,” Dr Brent Jackson, executive general manager public affairs at Engineers Australia, told The Fifth Estate.
“A commitment to innovative outcomes requires a commitment to action and a firm decision to allocate time and resources. This will undoubtedly require a shift in thinking away from innovation as a cost, to instead considering innovation as a benefit (or yield) of investment.”
Speaking on the innovation inquiry, Shadow Minister for Higher Education, Research, Innovation and Industry Senator Kim Carr said the Abbott government had no plans for innovation, making the Senate inquiry extremely important.
“Six months after the election, the Abbott Government still has no science minister and no science policy,” he told The Fifth Estate. “It is an extraordinary omission that is out of step with the rest of the world. Every country in the world is fighting for the investment to modernise, but this government is joining the race to the bottom.
“The Senate Committee Inquiry will seek to fill the policy black hole and lay the ground for a truly national transition to a high-skill, high-tech future.”
Industry comes out against Audit findings
Industry groups have been quick to challenge today’s (Thursday’s) Commission of Audit findings.
The Australian Private Equity & Venture Capital Association Limited said the audit report suggestions demonstrated “a lack of genuine commitment to fostering a stronger Australian economy in the future”.
“A small open market economy like ours has to focus on assisting Australian businesses to compete on the world stage, and that’s hugely important to bringing about productivity-enhancing reforms that will create more jobs and more economic growth in the years ahead,” AVCAL chief executive Yasser El-Ansary said.
“The Commission of Audit recommendations to abolish the Innovation Investment Fund and Commercialisation Australia have been made without there being any credible or compelling argument in support of the conclusions.”
The Australian Industry Group also came out against the suggestions to cut innovation funding, with chief executive Innes Willox saying, “The proposals in relation to innovation are not firmly founded and could benefit from a closer understanding of global best practice in fostering innovation and collaboration between business and public-sector research.”
The IIF, which successive government reviews have supported, helps capital-constrained firms, particularly those at the start-up and early stages of their lifecycle, who are constrained from maximising their innovative potential because of a lack of risk finance for growth.
AVCAL said government funding through the IIF, alongside professional venture capital managers, was bridging the funding gap that existed in this sector at very little impact to the budget bottom line.
Australia currently lags on measures of global competitiveness, so the move to get rid of innovation funding is another blow to an economy that desperately needs to innovate and find new sources of revenue as the mining boom subsides.
The World Economic Forum Global Competitiveness Index for 2013-14 ranked Australia 21st, trailing far behind other countries in the region, like Taiwan and Singapore. The 2013 Australian Innovation System Report also identified collaborative innovation as just one area in which Australia lagged behind its international peers.
— with Willow Aliento