The Victorian government will spend $2.5 million on a new program to help open up procurement opportunities to the state’s tech startups.
An accelerator program, backed by the state’s innovation fund LaunchVic and the Public Sector Innovation Fund (PSIF), will connect local startups with government departments and agencies to solve various issues, with the hope that this leads to government contracts for the companies.
The government would not say how much of the $2.5 million cost of the accelerator plan comes from LaunchVic and how much from the PSIF.
The CivVic Labs Accelerator is to accept up to 16 startups for a 12-week program, with funding, mentorship and resources provided by the government. A pilot program is to run in this financial year, with two then running yearly until 2020.
The program will be run by LaunchVic at the government-funded Victorian Innovation Hub in Docklands. Some of the funding will go towards the hiring of Mathan Ratinam as managing director of the CivVic Labs Accelerator following an executive search.
Dr Ratinam has previously served as lead design specialist at the innovation and entrepreneurship unit of the World Bank and has also worked in the White House under the Obama administration.
An inability for smaller companies to access government procurement is a common problem around Australia and at a federal level, and LaunchVic chief executive Kate Cornick said this was also reflected in Victoria.
“That’s something we heard loud and clear throughout our consultations in 2017 and this year – that startups more than anything are looking for ways to test their minimum-viable-products and have an opportunity to get procurement from large organisations. That then builds trust in brands and more opportunities,” Dr Cornick told InnovationAus.com.
The program is looking to bring government departments on board, with these agencies presenting a specific problem or issue that could do with “innovative thinking and new technologies” for applying startups to solve.
“It will connect startups in the early stages of development with government procurement opportunities at a time when that opportunity is most critical for their development and growth. It’s government exemplifying how large organisations can help startups,” Dr Cornick said.
“Government has lots of challenges around how they get value for money for big issues that are facing Victorians. They often procure from large companies, but we know that smaller startups are more nimble and offer greater tech advances, but come with a risk-appetite that government finds very hard to work with.”
The three-month program takes place in a “de-risked sandbox environment”, with representatives from the participating government departments also taking part in the accelerator.
“CivVic Labs will bring both of them together so we’ll be able to hopefully have some really good examples of startups accessing government procurement as a result,” Dr Cornick said.
“That will increase the success rate for startups in the future in the context of startups that go through the accelerator and other startups looking to procure from government,” she said.
It’s a model that has been proven around the world and in other Australian states. The Startup in Residence program in the US brings startups and government agencies together to develop products, in Scotland the CivTech Programme is similar, while Advance Queensland’s Testing Within Government scheme aims to assist companies in addressing business problems in collaboration with the state government.
It has been a busy few months for LaunchVic after a quiet start to the year that followed a tumultuous end to 2017. The organisation has now dished out nearly $20 million this year, with the state election fast-approaching in November, leaving its future into next year unknown.
But Dr Cornick said the recent rush in activity is the result of a long-term strategy that was locked in last year, rather than the upcoming election.
“That strategy set out the course of action that LaunchVic had agreed with the Victorian government, and we’ve been executing against that strategy. That takes a while to gain momentum, but now we’ve done the legwork, it’s coming to fruition,” she said.
“It’s really exciting to see the announcements come into play and address real issues in the startup sector. We’ve heard the issues and we’re responding.”
LaunchVic will enter caretaker mode along with all other government departments and agencies from late October, and will be unable to dish out any funding during this time.
“From the end of October, we’ll be in caretaker mode consistent with government policy for an agency, but ultimately we have an independent board and will continue to do good work and make a difference for the sector,” Dr Cornick said.