Australia’s Innovation Programs and Venture Investment: It’s Just Not Good Enough

Brad Howarth has written an in-depth piece for Nett# Magazine on Australia’s current information infrastructure, as well as the government’s plans to strengthen it — and the answer he comes up with in a number of categories is that “it’s just not good enough.”

Of particualr interest to ANZA TechNet members is the section on “Innovation Programs and Venture Investment”, which says:

A critical area of growing Australia’s information future is our ability to produce home grown technology companies that can both generate revenue and jobs, and provide innovative reasons to attract and retain the best talent.

But it is a sector that was kicked in the teeth last year when the Government cancelled the Commercial Ready program. Twelve months later it has still not provided an alternative, despite commissioning the Cutler Report on innovation. Many start-ups relied on Commercial Ready to fund crucial research and development programs, and its cancellation has set some back by 12 months or more.

Serial entrepreneur Jonathon Barouch is critical of Australia’s lack of incentives for start-up businesses. He says the whole business culture of supporting entrepreneurs that occurs in the US seems to be lacking in the Australian psyche.

“In the US and Europe there are programs to help with training as well as tax incentives for SMEs and start-ups to encourage entrepreneurs,” says Barouch. “In Australia, policy makers seem to be determined not to extend any preferential treatment to start-up businesses, which is a real shame.

“In times of economic downturn, SMEs and entrepreneurs may prove the key in increasing employment opportunities for Australians.”

Access to venture capital has also been constrained, thanks in part to the poor performance of the superannuation funds that back them. According to investor and chairman of the IT think tank The Pearcey Foundation, Wayne Fitzsimmons, the number of new early-stage companies has diminished as entrepreneurs come to believe that raising capital will be too difficult.

Fitzsimmons says that only four venture capital funds remain interested in early stage IT companies in Australia – Southern Cross Ventures, Starfish Ventures, Innovation Capital and CM Capital – in comparison to the many dozens operating in the US.

While government funding is available through the Innovation Investment Funds, this still requires matching funds to come from the commercial sector.

Read the complete article by clicking here.

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