Government as a Member of the Innovation Ecosystem: What are their needs and wants?

“Given today’s pace of change, innovation policy must be reviewed regularly for it to remain relevant, effective and connected.” Mark Cully; Chief Economist; Australian Government Department of Industry, Innovation and Science; Australian Innovation System Report 2017.  

 

ROLE OF GOVERNMENT IN THE INNOVATION ECOSYSTEM

 

Governments play a critical role in spurring innovation and they are key contributors to the ecosystem. Whether it be state or federal governments in Australia, millions, if not billions of public-sector dollars flow each year to education, training, public basic and applied research, and early-stage financing to support innovation. Governments also assist in creating the right conditions for firms to thrive and can influence innovation by establishing the right regulatory, tax settings and IP frameworks.

 

AUSTRALIAN STATE OF PLAY - GOVERNMENT SUPPORTING INNOVATION

 

 

The past few years the federal government has delivered a number of policies and initiatives focused on developing the Australian innovation ecosystem. The 2015 National Innovation and Science Agenda (NISA), saw a $1.1 billion package of 24 measures which spanned from new innovation program funding, tax incentives, research infrastructure expenditure and sector specific initiatives. Also more recently, in January 2018, Innovation & Science Australia, which was established as a part of NISA, released their 2030 Strategy, proposing recommendations to take Australia to a top tier innovation nation. However, to date, these recommendations have only been partially endorsed by government.  

 

Some of the key programs the Australian Government is delivering, which are aiming to directly build Australia’s innovation capacity include: the Research & Development Tax Incentive; the Entrepreneurs’ Programme – Accelerating Commercialisation, Innovation Connections, Business Management and Incubator Support; CSIRO Innovation Fund; CSIRO ON Program; Biomedical Translation Fund; Business Research Innovation Initiative; Landing Pads; Cooperative Research Centres; Industry Growth Centres; ARENA; new arrangements for venture capital investment – VCLP & ESVCLP; and the Early Stage Investor Tax Incentive.

 

State and Territory governments are also making a concerted effort to boost their innovation output and investment attractiveness by establishing dedicated innovation and startup agencies with tailored programs. Local governments should not be overlooked either with some actively funding and contributing to their own innovation community building activities at a smaller scale. 

 

VIC: The Victorian Government’s LaunchVIC aims to grow the Victorian startup community and the independent agency has delivered a number of startup and capacity building programs. They recently releasing their  8th funding round focused on HealthTech. VIC government also has established the Public Sector Innovation Fund to deliver better outcomes for Victorians from the startup and SME community. Additionally, City of Melbourne is implementing their Startup Action Plan 2017-21.

 

NSW: The NSW Government established Jobs for NSW where there is a focus on building and supporting a strong ecosystem in NSW for business growth. They deliver a number of startup specific programs including the MVP and Building Partnerships grants and has lead in the establishment of the Sydney Startup Hub which hosts a regional landing pad. Furthermore, NSW Government has partnered with 11 universities in the State and TAFE to form the Sydney School of Entrepreneurship.  The Innovation Launch Program is looking to connect government with innovators to solve public challenges for NSW and the City of Sydney is also active in the community and has developed their Tech Startup Action Plan.

 

QLD: Advance QLD is the startup and entrepreneurship arm for Queensland Government running a number of programs providing funding and assistance to startups as well as developing regional innovation clusters across the State through the Advancing Regional Innovation Program. They also delivered The Precinct, bringing together QLD’s startups, innovators, investors and mentors.

 

SA:  TechinSA, the South Australian Government’s startup support agency, offers grants and support to the innovation community. However, with a recent change in government after the election, they are currently reviewing all innovation assistance programs. SA had also previously established the $50 million South Australian Venture Capital Fund which will invest in SA scaleups.

 

WA: New Industries WA runs a $16.7 million fund that will support and accelerate new and emerging businesses in WA. So far this has supported the Joondalup Innovation Hub and also allocated funding specifically to regional innovation. The Innovation Vouchers Program also provides funding to commercialise new products and services.  

 

NT, ACT and TAS: These smaller States and Territories are delivering their own programs to foster startup activity and development. NT has co-funded the Darwin Innovation Hub in collaboration with federal government and they also run the Business Innovation Support Initiative which assists NT businesses to undertake R&D. Tasmania’s Government has provided funding to establish two startup hubs in Hobart and Launceston and the ACT has funded the CBR Innovation Network and previously run innovation grants programs, however these funding rounds have closed.  

 

WHAT ARE THE IMPACTS OF THESE INITIATIVES? 

 

In an attempt to foster innovation, there’s no denying that a lot is going on at all levels of government in Australia. However, given the extensive funding and resources dedicated to these efforts – are we seeing the intended outcomes? It is hard to answer this because Governments find it very difficult to measure the impact of their programs on the ecosystem, particularly as startups, and innovation more broadly, is notoriously hard to track (more on this in Decode’s last blog post).

 

HOW CAN GOVERNMENT ENSURE POLICY EFFICACY? 

 

Government ultimately want to foster a prosperous innovative economy. However, they need data to inform and develop evidence-based policy and programs focused on innovation. Currently, the government engages consultants and implements surveys in an attempt to map innovation ecosystems – most recently QLD and VIC. However, although they are incredibly resource intensive exercises, these efforts provide a point-in-time snapshot and do not measure government program impact.

As there is currently no single system of record for the Australian innovation ecosystem, Government, like many other innovation ecosystem participants, must rely on disaggregated data sources, spreadsheets and anecdotal feedback. They have no dynamic way to track, visualise and search the Australian innovation ecosystem. Without accurate data it is difficult for Governments to design effective policy and understand or benchmark the impact of these policies and programs. It is also impossible to have transparent accountability with regards to the effective use of public funds.

 

Australia is of a unique size where it is feasible to map and visualise all the participants in the innovation ecosystem. An aggregated system of record for innovation can: 

  • deliver valuable insights in a dynamic accessible way;
  • facilitate informed data driven policy;
  • clearly identify the gaps and challenges within the ecosystem requiring critical support; and
  • allow for measurement of the impact of, and thus the refinement of, innovation programs. 

 

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