A summary of the Government’s ‘Innovation Statement’ and what this means for business
At the end of last year Prime Minister Malcom Turnbull unveiled the National Innovation and Science Agenda, a $1.1 billion package aimed at promoting and fostering science and innovation and generating a new “ideas boom” to help drive Australia’s economy. The package includes multiple initiatives and programs designed to promote investment in innovation; strengthen collaboration between businesses, universities and scientific institutions; develop and attract skilled and talented people; and improve the government’s ability to support science and innovation.
The Innovation Package: Culture and Capital
Several initiatives are being introduced to promote investment in innovation and encourage start-ups. These include tax incentives for investors, changes to insolvency laws to reduce the penalties and stigma of failure and encourage entrepreneurs to take a risk, and funding for commercialization. Specific examples of these initiatives include:
- self-assessment of intangible assets such as patents, which can increase the depreciation benefit
- 10 year capital gains tax exemption for investments held for 3 years
- 20% non-refundable tax offset on investment capped at $200,000 per investor, per year
- 10% non-refundable tax offset for capital invested in new Early State Venture Capital Limited Partnerships
- reduction in the current default bankruptcy period from 3 years to 1 year
- new crowdfunding schemes for start-ups worth less than $5 million to raise $5 million from individuals
- a $200 million CSIRO investment fund to support co-investment in new spin-offs and start-ups
- a $250 million Biomedical Translation fund for co-investment with the private sector for commercializing medical research
The Innovation Package: Collaboration
The package contains various initiatives aimed at strengthening collaboration between businesses, universities and scientific institutions, including funding for collaborative research infrastructure and programs, programs to connect businesses and researchers in Australia, and connect Australian entrepreneurs and researches with international industry. Some key initiatives include:
- $520 million for the Australian Synchotron
- $294 million for the Square Kilometer Array
- $22 million for a new Cyber Security Growth Centre
- access for entrepreneurial Australians to landing pads in Silicon Valley, Tel Aviv and three other locations
- funding for Australian collaborations with international research-industry clusters
- focus existing funding toward collaborative programs between researchers and industry, as well as an additional $127 million in funding
The Innovation Package: Talent and Skills
The package is also focused on improving education and opportunities in science, technology, engineering and maths (STEM) and information and communications technology (ICT), as well as attracting entrepreneurs and researchers to Australia. Some examples of initiatives with these goals in mind include:
- over $100 million for year 5 and 7 children to learn computer coding and for a range of other programs to promote ICT and STEM teaching of students of all ages, from pre-school upwards
- $13 million to support women and girls in STEM research and industry, as well as start-ups
- new Entrepreneurial visa for entrepreneurs with financial backing and pathways to permanent residence for STEM and ICT postgraduates
The Innovation Package: Government
- establishment of a new independent body, Innovation and Science Australia, and a new Innovation and Science Committee of Cabinet, chaired by the Prime Minister, which brings science and innovation to the highest levels of government
- establishment of Data61, a merger between National ICT Australia (NICTA) and CSIRO’s digital research unit
The package has been well received by both the scientific and business communities and is a welcome change in direction by the government. It rightly recognizes the importance of a strong science and innovation industry to the growth of the Australian economy after years of cuts to funding and other attacks on the industry’s sustainability.
What does the innovation statement mean for business?
This is certainly an encouraging step in the right direction for innovation led growth. There is much media commentary about the need to stimulate start ups and disruptors and the plan looks to support the development of, and investment in, such businesses.
For larger, traditional business we see the opportunity to rethink their growth strategies to incorporate more innovation to access new markets and geographies. Australia has traditionally had a lower rate of licensing-in technology and building product strategies by improving on existing technologies and collaborating with universities on research. The incentives and moves to align universities closer to industries will hopefully foster more of this.
We are able to input into your innovation plan through providing insight into the technology landscape in your business or ancillary technology areas. Patent information provides a great deal of insight into the existing research and development and is often a building block for bringing in technology upon which innovative products evolve. We look forward to being a part of your innovation future.