Microsoft has today released a report calling for an urgent review of how the Australian innovation ecosystem works, in order to make the most of the burgeoning tech innovation movement. Joined-Up Innovation outlines seven steps Australia can take to boost the fragmented innovation workforce. The recommendations included breaking down silos within the innovation community, fixing slow-moving processes, improving knowledge sharing, proactive upskilling programs and encouraging mobility. The third recommendation of the seven was to “look beyond startups” when it comes to innovation, as a vibrant and productive innovation system needed to transcend just young businesses. This is despite the fact the report defined innovation as new businesses built around breakthrough ideas. The fourth recommendation, transforming our culture, is one the Australian startup ecosystem has been campaigning about for years. The report includes a number of cultural obstacles that are already preventing our innovation ecosystem from operating as smoothly as it could. “These include low acceptance of business failures, which can make potential; innovators reluctant to launch ventures for fear of harming their reputations,” the report finds. This fear of failure seems to emerge early, with president of the Australian Academy of Technological Sciences and Engineering Alan Finkel claiming the flow from university into startups is a pressure point. “We’ve cut it off at the knees by having this tendency to think it’s a failure if you leave university and go into industry – and it’s a double failure if you go from university to a startup and the startup isn’t a successful one.” The report also cited either the ‘tall poppy syndrome’ or ‘fear of being placed on BRW’s Rich List’ may be having a net result of few equivalents of Facebook’s Mark Zuckerberg or Microsoft’s Bill Gates. The report was created from roundtable discussions of over 15 innovation experts including Microsoft Australia’s managing director Pip Marlow, Commercialisation Australia’s Doron Ben-Meir, Australian Information Industry Association’s Suzanne Campbell, ATP Innovations’ Hamish Hawthorn and consultant Sandy Plunkett. In a statement, Marlow says Australia had amazing strengths but untapped potential. “But if we want to maintain – and preferably improve – our competitive position, we need to reinvent our innovation ecosystem for the information age rather than sticking with models developed in the industrial age,” Marlow says. The report also included new findings from PricewaterhouseCoopers that demonstrate how equipping Australia’s significant small to medium sized business community with greater tech skills could increase GDP by nearly $6 billion (0.4%). Image: Microsoft chief executive Satya Nadella.
The federal government’s venture capital organisation is on hold, with the Department of Industry announcing applications will not be accepted or processed until after the May 2014 budget. This is not the first time the Commercialisation Australia grants have been frozen pending a review, with an earlier freeze occurring in late 2012. StartupSmart understands from several sources that there is concern within the department that a component for startups, rumoured to be the early stage commercialisation funding segment, may be abolished post-May. To get a sense of the importance of Commercialisation Australia to the industry we took a look at its currents stats. Commercialisation Australia chief executive Doron Ben-Meir also declined to comment on the speculation. Since its inception, Commercialisation Australia has invested over $213 million in 503 companies (as of February 2014). The organisation funds companies at four key stages. These include a grant of up to $50,000 to access specialist advice; up to $350,000 to hire experienced senior executives; up to $250,000 to prove commercial viability of an idea; and between $50,000 and $2 million to assist early stage commercialisation. Queensland has received the most funding deals with 134, followed by New South Wales at 126, Victoria at 116, Western Australia 63, South Australia 34, Canberra 15, Tasmania 12 and the Northern Territory three. Almost half of the funding (42%) went to manufacturing and engineering startups, 33% to software and web design, 13% computer systems and hardware and 12% biotechnology. Government venture capital can be particularly potent in emerging ecosystems. For example, much of the investment in Perth tech companies so far has included backing by Commercialisation Australia. Recent investments include admin efficiency app Breezedocs, workplace app SafetyCulture, customisable radio app Omny, campus surveillance app CriticalArc, and epublishing software LiquidState. The full list of grant recipients, amounts and industries is here.
Automated document processing start-up Breezedocs has locked in a $250,000 grant from Commercialisation Australia, the federal government’s venture capital organisation. The start-up has been developing the product for two years. They launched a beta round as an entity called OneTouch and launched to the market in August 2012. Co-founder and managing director Hany Pham told StartupSmart they waited until they were sure they met all the criteria before applying. “Commercialisation Australia is great but it’s a tricky little window you need to be in, post research and development but pre-revenue,” Pham says, adding while they’re making revenue now they had minimal revenue when they applied. “As an enterprise start-up, you launch quietly and if that doesn’t work as great as you hoped you launch again with the feedback from the users.” In a statement, Commercialisation Australia chief executive Doron Ben-Meir said their support of Breezedocs went beyond the invested funds. “In addition to grant funding, Commercialisation Australia provides companies such as Breezedocs with access to our expert network of successful entrepreneurs, domain experts, professional investors and strategic corporates which helps them get to where they need to be faster.” The funds will go towards building the engineering team and expanding their Australian operations and customer network. Breezedocs intends to launch an office in the United States in late 2014 and have already begun working with clients. “We’re already getting started there so we’re up late at night doing phone calls for the US time zone and why we always sign off our emails with the US number,” Pham says. This is the start-ups second funding round, after raising $250,000 in 2013 private equity investors including Angelcube accelerator co-founder Adrian Stone and economist Nicholas Gruen.
The latest edition of Commercialisation Australia’s Value Proposition publication has revealed where government funds are going to support start-ups at the commercialisation stage. New South Wales received the most funding, with $56.8 million going to 110 companies. Queensland has the most businesses and researchers funded, with $36.1 million going to 114 companies. Businesses focused on health and medical ($44 million), business and communication ($29 million), and energy, mining and resources ($26.1 million) are receiving the majority of the $178.1 million in funding. The leading industry achieving funding in South Australia ($5.4 million), Victoria ($11.7 million) and New South Wales ($16.1 million) was health and medical. Mining, energy and resources was the leader of industry investment in Western Australia, at $10 million. Only two companies in the Northern Territory received funding, totalling $650,000. The defence and security industry received the most investment in the Australian Capital Territory with $2.4 million, and food and agriculture in Tasmania at $887,000. Of the 430 businesses or researchers receiving funding, 18% are in regional Australia. Doron Ben-Meir, chief executive of Commercialisation Australia, wrote it was hardly surprising regional small and medium-sized business had more negative views about the economy than metropolitan ones, according to recent findings of the Australian Bureau of Statistics. “Aspiring entrepreneurs in the vastness of regional Australia confront many challenges not faced by their city contemporaries, from a lack of readily available to expert advice to a plethora of communication and transport issues,” he wrote. “Yet the regions have a critical role to play in keeping the economy vibrant, with primary industries alone making up close to two-thirds of Australia’s exports.” David Mac Smith, a Commercialisation Australia case manager, described access to capital as especially hard. “Money is always an issue, because access to funding is significantly worse than in the cities,” Smith says in the magazine. “One of the consequences of this undercapitalisation is that businesses grow at a slower rate.” The full report and previous issues can be downloaded here.
Entrepreneurs have spoken of their experiences at the “start-up pitch-fests” held for the Advance Innovation Program, highlighting the importance of preparation and the structure of your pitch.
A start-up founded by former bank executives is among the latest round of companies to receive grants from Commercialisation Australia, pocketing $609,000 for its bill payments system.
Entrepreneurial convention TiECon Sydney has launched a “25 words or less” competition, offering the winner a two-hour timeslot at its conference, as Australian start-ups vie for prizes in increasingly unusual ways.
Start-ups have been given an 'open door' chance at the TiECON Sydney event to land $50,000 from angel investors, with organisers claiming that the initiative is an opportunity for new ventures to hone their pitches.
There are fears that the Federal Government is to axe grants used to support Australian start-up innovation as the Treasury searches for billions of dollars in budgetary savings.
Taxi location app goCatch has been named winner of Microsoft’s APAC Startup 2012 Award, after pitching its ambitious international plans to a panel of judges.
Commercialisation Australia has struck a partnership deal with not-for-profit entrepreneur network TiE Sydney with the aim of backing innovative Australian start-ups.
The Federal Government has launched a new market intelligence tool designed to help assess the commercial potential of university researchers’ projects.
V-Tol Aerospace, a Queensland based company that develops unmanned aircraft systems, has teamed up with the University of Queensland to launch the Australian Unmanned Systems Academy (AUSA).
The Victorian Government’s $772 million investment in biotechnology has failed to produce any clear benefits due to a severe lack of strategy, according to a new report.
When Commercialisation Australia was launched in January last year, many entrepreneurs, frustrated by previous government-backed funding schemes such as Comet, were sceptical of its impact.
Twenty-nine companies, entrepreneurs and inventors will share in more than $13 million to commercialise their technologies as part of Commercialisation Australia.