Technology companies that are spun-out from deep-pocketed universities should not be an investment focus for the National Reconstruction Fund, according to former Victorian minister for small business, innovation and trade, Philip Dalidakis.
Top tier universities have very large balance sheets and their researchers already have access to significant funding through other sources, he said.
Commercial spin-outs from these top tier institutions should not be allowed to “crowd-out” the $15 billion NRF funding pool from commercial startups that don’t have the support of such wealthy shareholder institutions.
Speaking to the Commercial Disco podcast, Mr Dalidakis – who is the chair and managing partner at consulting house Orizontas – said commercial spin-outs from wealthy universities similarly should not be a target for Breakthrough Victoria, the state’s $1 billion investment fund.
This Commercial Disco interview goes deep into the opportunities Australia, with discussions about the National Reconstruction Fund, the challenges for building the skills required to drive those opportunities, and the experience of being a state government minister during a period of fertile growth in the startup sector.
Mr Dalidakis said the creation of the National Reconstruction Fund was a significant achievement of Industry minister Ed Husic, and would create massive opportunities for the nation. But while much can be achieved with $15 billion, it remained a modest investment when measured against total spending over the life of a government, and should therefore be highly targeted.
“I hope that the NRF does not look at investing in organisations that are spun-out of universities predominantly,” he said. “There is [already] a lot of funding across the sector for university researchers.”
“And it would annoy me … if they try and seek the NRF’s $15 billion as another playground, because they already have access to funds.
“Whit I want to see is the NRF focus on other organisations and other people that don’t necessarily have that same level of support through the university system and access to funds as well.”
“All I’m saying is when you’ve got shareholders like Monash [Uni] and Melbourne [Uni] … they have significant balance sheets. And if they don’t have access to funds, fine look for it somewhere else,” Mr Dalidakis said.
“But don’t crowd out a funding pool like the NRF or Breakthrough Victoria, when other people don’t have access to those shareholders. That’s all.”
He said one of the challenges when he was in Dan Andrews’ first ministry from July 2015 was the revolving door of federal ministers appointed to the Industry portfolio.
Mr Dalidakis was a relatively new state minister for Innovation when Malcolm Turnbull became Prime Minister in late 2015. It was a heady time for startups and the rest of the innovation ecosystem through the launch of Turnbull’s National Innovation and Science Agenda.
He says he dealt with seven different federal ministers during his time as minister.
“That was probably the most challenging thing in terms of trying to get some kind of harmony between state and federal government for policy,” Mr Dalidakis said.
In this interview, Mr Dalidakis talks in some detail about the drivers LaunchVic, the state’s long running and successful startup agency, which is perhaps his most visible legacy.
Mr Dalidakis notes that LaunchVic’s founding chair Ahmed Fahour – a former Australian Post chief executive and current CEO at Latitude Financial Services – has been appointed to the National Reconstruction Fund board of directors.
This episode of The Commercial Disco is proudly brought to you by CSIRO, Australia’s national science agency and innovation catalyst.
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