Government’s push to give startups larger share in $5.6 billion ICT spend met with cautious optimism – StartupSmart

Alex McCauley StartupAUS CEO
StartupAUS CEO Alex McCauley

The federal government has set a target of boosting the number of government contracts that are awarded to startups and small businesses in the information and communication technology sector by 10%.

But before this can be achieved, SMEs will be asked to point out issues with the government’s culture that might stop the Commonwealth from forming good relationships with local ICT businesses.

Last week Assistant Minister for Cities and Digital Transformation Angus Taylor unveiled a taskforce to review the federal government’s ICT contract procurement process, with a call-out for submissions from interested parties.

The government hopes this information will give smaller businesses a bigger slice of this $5.6 billion procurement pie, according to Innovation Australia.

“How we work, how we buy goods and services, how we communicate, is being transformed by digital technology,” Taylor said in a statement.

Government is committed to improving the lives of all Australians through more effective digital services – the opportunity is too great to ignore.”

Small businesses and startup bodies have reacted to news of a new focus on government contracts with cautious optimism.

“If it’s done well, this would be a big step forward for startups in Australia,” StartupAUS chief executive Alex McCauley says.

“To do it well, the government will need to make sure it is open to risk, and will need to be comfortable dealing with young fast-moving companies.”

While the federal government provides a number of education resources on its tender process for services, and encourages pitches from all parties for a number of opportunities, smaller operators recognise that big names often win out because governments are cautious on the risks associated with unknown providers.

“This has traditionally been stifled due to the complex and expensive government procurement processes,” Beanstalk Factory co-founder Peter Bradd says.

“We know that startups excel at giving birth to successful proof of concepts, and enterprise is much better at successfully scaling these.”

The Department of Prime Minister and Cabinet website acknowledges in its call-out for submissions:

“In the context of ICT procurement, the characteristics identified above could encourage public servants to prioritise the safe option over the most fit-for-purpose option, favour the status quo over new and innovative solutions and take a controls-based approach to managing security risk.”

The government has expanded its innovation focus over the past year to include a range of smaller companies, acknowledging the benefit of drawing all types of small Australian businesses into new opportunities and funding initiatives.

Read more: Aussie SMEs get direct line to China with Australia’s Alibaba deal—three things you need to know 

Council of Small Business Australia chief executive Peter Strong says this has been a sustained effort.

“Certainly in talking to the key ministers involved, they’re very keen to just talk to everyday people about business opportunities,” Strong says.

Minister for Innovation, Industry and Science Greg Hunt said in an opinion piece about the direction of the government’s agenda in August: “Innovation is not just about tech startups or IT. It’s also about established businesses doing things better.”

Established businesses could stand to gain from the new focus on procurement.

Parties are invited to answer a range of specific questions on the rules, capability and culture of the current ICT landscape, and provide suggestions for how to streamline processes so that smaller operators are better placed to deliver services to government.

Questions include “What capabilities does the Australian Government need to be able to take full advantage of digital technologies, now and in the future?” and “What sort of culture and attitudinal change would better support innovative ICT services and get more SME and startups working with the Government?”

The taskforce appears to be another attempt by the government to help local SMEs with a proven track record find new opportunities and markets.

In September, the prime minister announced a deal with Chinese retail giant Alibaba, with Austrade to provide a first point of contact to help local businesses prepare themselves for selling into China through Alibaba’s channels.

Taylor believes the ICT taskforce will also encourage those at the cutting edge of their fields to bring their approaches into government processes for the first time.

“This gateway needs to be open and streamlined so that new technologies can be deployed quickly to improve public services,” he says.

This article was originally published on Smart Company.

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