Denham Sadler
July 29, 2019

Qualified tick for Growth Centres

Performance Review

Qualified tick for Growth Centres

Report card: The Industry Growth Centres program gets qualified pass in review

The Industry Growth Centres are “generally on track,” but the government will struggle to measure their overall effectiveness, a long-awaited report has found.

The federal government tasked Nous Group last year with conducting a four-month review of the effectiveness of the $120 million-per-year Industry Growth Centres, and the report was finalised at the beginning of the year.

But the release of the final report had been complicated by the May election, and has only just been made public, more than six months after it was completed and handed to government.

The review found that the six growth centres were at “different stages of evolution” but are “generally on track to meet the objectives” included in their business plans and from the government.

But the review also found that the Growth Centres aren’t properly collecting data and don’t have effective performance measurements in place. It said that government would ultimately struggle to determine their effectiveness, or the usefulness of the policy as a whole.

The Industry Growth Centres initiative was launched by the Coalition in 2013 through repurposed funding. There are new six centres in areas of “competitive strength and strategic priority”: advanced manufacturing, cybersecurity, food and agribusiness, medical technology and pharmaceuticals, mining and oil, and gas and natural resources.

The Growth Centres receive a combined $120 million annually, with the aim for each to be self-funded after four years. But in late 2018 the government extended this funding to six years, allocating a further $60 million over two years.

The effectiveness and performance of the growth centres in improving commercialisation and collaboration in the chosen sectors has been questioned by the Opposition and some stakeholders.

The review, which included online surveys, interviews with the department, Growth Centres and stakeholders and a desktop review, found that the centres are “generally on track to meet their objectives”, but it is too early to assess the wider impact they have had in the sectors.

“It is still too early to definitively assess the levels of additionality or sector-wide impact achieved by each of the Growth Centres. Most of the Growth Centres are still developing an appropriate conceptual approach and evidence base to measure impact at a sectoral level,” the report said.

The report also flags the difficulties the government may have in determining the effectiveness of the overall Growth Centres policy, an issue compounded by the data collection and performance measure practices lacking “rigour required for consistency and alignment”.

“One challenge in evaluating the longer-term impact of each growth centre will be separating out the impact of the projects funded, relative to the coordination and promotion role of the growth centre,” it said.

“Impact at an initiative-wide level will likely be even harder to measure, given the variance in how growth centres engage with their sectors, the outcomes they are seeking to achieve, and the inconsistent and incomplete output and outcomes data they currently collect.

“More work is required to develop consistent and appropriate approaches to measuring individual sector and initiative-wide impact.”

The report recommended that the government “revisit expectations” on what success looks like for the centres.

“Success should see higher rates of commercialisation of research, it should see a greater two-way flow of staff between research and business organisations, and it should see a rise in business expenditure on R&D. These changes should translate into sector growth and profitability,” it said.

“A differentiated approach may be required to ensure that the initiative promotes rather than hinders market driven responses to exploit opportunities and overcome barriers to innovation and expansion.”

It also found that the Growth Centres have taken “longer than expected” to start deploying their funding due to different start dates, priorities and funding mechanisms.

The review assessed how each Growth Centre has added value to its sector, met its funding agreement requirements, addressed sectoral challenges and collected appropriate data.

The Advanced Manufacturing Growth Centre did not fund any projects in its first two years of existence, but has now “built momentum” and has signed 22 projects, the report found.

The review found the AustCyber growth centre to be performing strongly, having met or be on track to meet its objectives and “achieved an impressive amount despite only being operational for a relatively short period of time”.

The Food Innovation Australia Limited (FIAL) Growth Centre has had a harder time establishing itself in the “large, diverse and highly fragmented sector” it operates in and has received “mixed views” on the extent of its effectiveness, the review found.

“It is hard to make a definitive assessment about FIAL’s impact at a sector-wide level, against its ambitious sector-wide goals at this point in time. It is important to acknowledge the challenges inherent in affecting and measuring impact in such a large, diverse, dispersed and fragmented sector,” the report said.

The department also dropped its own report on the progress and impact of the growth centres this week, with $57.9 million spent on 150 collaborative projects, matched with nearly $78 million in industry money.

The government said the centres are connecting researchers with industry needs, have engaged with 26,000 organisations, improved workforce skills and worked on improving regulation.

The growth centres initiative has been criticised by the Opposition, and Labor had planned to slash its funding in half if it had won the May election. Former industry minister Kim Carr was vocal in his concerns about the program, questioning the role of the growth centres.

“You do have to really ask yourself, what has actually been achieved by this program? It goes to the fundamental question, what is the role of the growth centres? The feedback I am getting is saying the Growth Centres’ attitude is dismissive and arrogant, and that they are not working collaboratively,” Senator Carr said late last year.

“You would have to say that at best the performance is uneven. No-one has said the Growth Centres are doing an outstanding job.”

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