Victoria’s $2 billion commercialisation fund will lead to a “quantum shift” for the state, according to former Premier John Brumby, who will chair the new fund.
The Breakthrough Victoria Fund, which will provide funding to local companies for R&D adoption and commercialisation over the next decade, is now up and running with the government establishing a new company and appointing its board and chief executive officer.
Mr Brumby, who is now Chancellor of La Trobe University and chair of Biocurate after serving as Victorian Premier from 2007 to 2010, is the fund’s first chair. He said the fund is one of the most significant state policies in industry development ever and would drive Victoria’s recovery from the COVID-19 pandemic.
“Our ambitions are big. It’s the biggest investment that the state has ever made in science, technology and innovation, and I think it’s going to drive some big results for the state,” Mr Brumby told InnovationAus.
“Those results will come through business growth, employment growth, productivity enhancement and also through early-stage investment. We’ll be building on some of the brilliant science that we’ve got here, creating new companies, and hopefully breakthroughs that will change the state,” he said.
“This is a quantum shift in terms of what any government has ever done in Victoria before.”
Mr Brumby said that across his career in politics and since, he had witnessed first-hand Australia’s long-standing commercialisation woes, and this was something the fund would help to address.
“This is the big issue for Australia. We’ve had, and continue to have, a fantastic reputation in terms of research, and what we do in our universities and industries, but in terms of how we translate that into therapeutics, into drugs, into products and into manufactured goods that generate jobs and make a difference in the world, we’ve been pretty poor at that,” he said.
“That’s been an Australian problem for the best part of the last 30 to 40 years. The movement is all in the right direction, but we’re still in this position where we do well, rank well and perform well in the research space – but far too little of what we do turns into things that make a difference in the world.”
In September last year the Herald Sun asked every former Victorian Premier for their four big ideas to assist Victoria’s economic recovery. Mr Brumby’s first proposal was for a $1 billion fund.
Soon after the story was published, current Premier Daniel Andrews called Mr Brumby, saying this was the standout idea from the piece, and something which fitted with what the state was looking to do.
Two months later, the state budget provided $2 billion over 10 years for the Breakthrough Victoria Fund. A guaranteed $200 million would be deployed annually over the forward estimates.
The fund’s investments would focus on health, advanced manufacturing, clean energy, agri-food and digital technologies.
It will fund a range of grants, repayable loans, equity and joint ventures, through partnerships with private investors, superannuation, venture capital and the federal government.
It will also be centred on Victoria’s innovation and employment precincts, including Parkville, Arden and Macauley, Bundoora, Clayton and Fishermans Bend.
“An early task will be to identify what’s in scope in those sectors. We’ve identified some precinct areas, which are particularly around the key innovation and employment precincts and universities,” Mr Brumby said.
“What we do in those five sectors is going to be the key to the new businesses and jobs we will see in the future – it’s exactly the right time and right place.”
Mr Brumby said the Breakthrough Victoria Fund will have two lines of potential investment opportunities.
“The first will be projects with strong commercial potential, to accelerate productivity, grow exports, support domestic manufacturing and create jobs across the R&D pathway. The second element is to consider transformational projects that are early-stage projects bringing together the best and brightest from the research community,” Mr Brumby said.
“We want to be intervening early to get breakthroughs and those proposals that often don’t get funded because of market failures, they’re just too early.”
The fund’s other board members include former SEEK chief executive Andrew Bassat, former Deakin University vice-chancellor Jane den Hollander and Victorian chief scientist Dr Amanda Caples.
The fund’s inaugural chief executive will be former Federation Square CEO Xavier Csar.
A spokesperson for the state government said an investment plan would be finalised by June, with the first round of investments to be made by the end of the year.
“The coronavirus pandemic highlighted the importance of having a diverse, innovative economy and secure employment. This initiative will increase our economic resilience by unlocking more growth in sectors with strong fundamentals and investing in opportunities that can support the state’s economic performance over the long term,” the spokesperson told InnovationAus.
“We know Victoria has some of the best minds in the world, producing some of the most advanced research. The fund will cement Victoria’s international reputation as a destination for investment, research and global talent.”
There are plans to hold industry forums in May and June this year for parties interested in the Breakthrough Victoria Fund.
Two other venture funds are also being established by the Victorian government for early and later stage firms in Victoria.
The $61 million Victorian Startup Capital Fund will be providing cash for early-stage startups over three years, while the $25 million Venture Growth Fund will see the state government co-investing into a venture debt facility along with a private investor.
The recent budget also included a $50 million fund for low-interest loans for eligible companies accessing the federal government’s research and development tax incentive. It will provide for up to 80 percent of a company’s forecast refundable tax offset.