Industry Minister Greg Hunt will today unveil a new capital funding scheme for local mid-sized companies and scale-up enterprises as part of a recalibration of the National Innovation and Science Agenda.
The changes to be unveiled will de-emphasise the startup end of the Prime Minister’s centrepiece of innovation and science policy. But equally, the changes will not take any existing commitments away from startups, and should give fast growing successful startups easier access to larger chunks of capital as they grow.
Mr Hunt will announce the new initiatives at an AFR innovation summit in Sydney today, as his first major speech on the innovation and science agenda.
He is also expected to outline more detail of the structure of the Industry, Innovation and Science portfolio, and how responsibilities will be carved up with Assistant Minister Craig Laundy (who has yet to surface since his appointment last month.)
And lest the changes scare the horses among the powerful startup and venture capital lobbyists, Mr Hunt will make a pit-stop at the Tyro FinTech Hub in Sydney on his way to the summit to pay homage to a whole tribe of elite finance sector startup.
He will also swap notes in a fireside chat-style conversation with Tyro Payments chief executive Jost Stollmann, himself a former German Shadow Minister for Economy and Technology.
Mr Hunt’s strategic recalibration of the National Innovation and Science Agenda began at the weekend with an interview with The Australian’s Paul Kelly (of all people!), who was able to confirm in grave and gravelly tones what everyone already knows – that the election focus on startups went down like a lead balloon.
The broadening of the innovation agenda to better capture cross-industry SMEs is something that was already on the agenda. But it will also emphasise the role of support programs outside of the major capitals, and will provide a bulwark against all business subsidy programs being captured by the inner-cities.
But the announcement of the new government- fund to support mid-tier companies in the $20 million–$200 million size range is an extension of existing arrangements that subsidise capital.
It’s not a terrible thing, but it does demonstrate how captured this government is to the capital side of the innovation economy.
It also illustrates the specific political power of the private equity sector in this country, with its very well-funded and well-resourced political lobby.
Expect to hear more from the Minister on tougher support frameworks for those industries currently in palliative care, and importantly, better and more targeted support for niche companies’ quest to get on global supply chains.
Meanwhile, the chief scientist Alan Finkel has delivered the best Icelandic football-themed speech on Australian innovation you will hear this year. What is it with the chief scientist and Iceland? He loves that place.
Using tiny Iceland’s success in the European football championships as his foil, Prof Finkel said Australia needed to think bigger. Entrepreneurs needed to think global from the start. To be bigger from the start.
“We need to cease our self-criticism because it only destroys our ability to build constructively on what we have,” Prof Finkel said. “And we do need to build on that foundation: constructively, creatively and continuously.”
Extraordinarily, Prof Finkel told the conference yesterday that the five largest companies on the S&P 500 by market capitalisation last week were Apple, Google, Microsoft, Amazon and Facebook.
“And all of those companies except Facebook spend more on R&D than the Government of Australia spends across the entire science and innovation portfolio.”
That’s how big our ambition should be.