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Innovation funding again under threat
(Pictured: Yasser El-Ansary)
After some years of improvement, Australia’s previously abysmal record of investing in innovation, is again looming, venture capitalists fear. They are concerned that the new Government’s belt tightening may threaten the next round of funding for the Innovation Investment Fund (IIF) and the Translational Biotech Fund (TBF).
The Australian Private Equity and Venture Capital Association (AVCAL) last week sent its submission to the National Commission of Audit. This argues for the retention of both programs, in which the Government’s dollars are matched by private funding and turned into pooled investments.
Yasser El-Ansary, AVCAL’s chief executive, says: “The IIF – which was an initiative of the former Howard Government – is a vital source of funding for many innovative start-ups in Australia. By bridging the funding gap for companies looking to commercialise their concepts, we can ensure that Australian innovation remains a key ingredient for future economic growth while at the same time having very little impact on the Government’s fiscal balance.”
The establishment of a TBF is also seen as important step in helping early stage biotech companies, as identified in the work undertaken as part of the recent McKeon Review. The TBF is intended to support research commercialisation by bridging the “valley of death” at the early clinical stage and testing of medical devices.
“Both programs involve the acquisition of financial assets through administered capital, which means they do not impact the Government’s fiscal balance and in actual fact the Government can obtain a return on the funds invested,” El-Ansary says.
“There is an irrefutable flaw in our current policy prioritisation – we don’t invest enough in innovation, and we have to start taking steps to arrest the slide. Our chronic under-investment goes some way to explaining why Australia currently lags behind our global counterparts in collaborative innovation, as identified in the 2013 Australian Innovation System Report.
“Long-term policy support for forward-thinking initiatives such as the IIF and TBF will greatly help in fostering an environment that nurtures the development of Australian innovation beyond the confines of universities, laboratories and research centres.”
From an overall federal revenue base of about $400 billion a year, the Government currently spends around $9 billion (2.25 per cent) on science, research and innovation. And it is estimated that less than 1.5 per cent of the $9 billion goes towards research translation into commercial outcomes.
View full submission.
