The Albanese government has opened the consultation process on its $392 million Industry Growth Program, a new early-stage commercialisation initiative to bridge the ‘valley of death’ facing young SMEs working on innovative projects that align with the National Reconstruction Fund.
Industry minister Ed Husic on Wednesday released a discussion paper calling for feedback on program announced in last month’s federal Budget to address early-stage funding concerns with the government’s landmark industry fund.
The program is expected to provide advice and matched grant funding of up to $5 million to startups and SME’s, with the aim of expanding the pipeline of investment-ready projects for the $15 billion National Reconstruction Fund (NRF).
It will target the government’s priority areas for the NRF, such as value-add in agriculture, forestry and fisheries; value-add in resources; transport; medical science; renewables and low emissions technologies; defence capability; and enabling capabilities.
The program has been well received by industry as it helps address valley of death issues that have often forced Australian SMEs taking their innovative ideas offshore to find backing in other markets.
Mr Husic on Wednesday said the government was “particularly keen to help bridge the ‘valley of death’ – where great ideas, often backed by solid research, are hamstrung only by a lack of funding and expertise.”
“This consultation is about creating the right conditions to ensure brilliant Australian entrepreneurs can grow and thrive here at home,” he said, adding that the program was “setting up the next wave of Australian businesses to thrive for years to come.”
According to the discussion paper, the program will focus on “industry-led activities”, like those of “innovative SMEs looking to scale-up and commercialise their operations”, and that industry research collaborations are only “potentially eligible.”
“We intend the program to focus on those that will benefit the most from advice and financial support. This may be due to their difficult assessing expertise, networks, finance or other causes,” the paper states.
“The commercialisation element of this program will focus on encouraging innovative SMEs to get their unique ideas to market and achieve first sales. The early-stage growth element… is expected to focus on pre-profit SMEs with novel ideas and are now seeking to scale their operations”.
Support will come in the form of both advice from Industry Growth Program (IGP) advisers and industry partner organisations, as well as matched grants of up to $250,000 for very early-stage commercialisation and up to $5 million for all other projects.
The Department of Industry, Science and Resources will engage IGP advisers to “provide guidance on commercialisation and SME growth” to businesses, while industry partner organsiations – which are yet to be determined – will also provide “specialised advisory and support services” in some cases.
“We propose that organisations wanting to be classified as an industry partner organization will need to apply and be considered through government selection processes,” the discussion paper states.
Only grant applications for projects that have been invited by an IGP advisers, industry partner organisations, or the IGP’s executive director will be accepted by the government, according to the paper.
At least 50 per cent of the project that aligns with an NRF priority area will also need to be funded by the SME, with the proponent expected to provide evidence of their ability to fund the remainder of the project.
“Only the most promising projects proposed by innovative SMES that have received advisory services will be invited to apply for grant funding,” the discussion paper, released on Wednesday, said.
Program oversight and recommendations on grant assessments will be provided by a new committee, which will be established under the delegation of the Industry Innovation and Science Australia Board.
As part of the consultation, the government is requesting feedback on the criteria for the program, including whether it should be limited to businesses with a turnover of $20 million or less, and whether Technology Readiness Levels should be used to determine eligibility of a project.
It also wants to understand how the program might complement other university, industry or government initiatives, with the government already looking at opportunities to link the IGP with Australia’s Economic Accelerator and CRCs.
“The Australian government wants to ensure it has a competitive program to nurture innovative companies to become the big employers of the future,” the discussion paper states.
“The program’s strong focus on commercialisation and early-stage business growth advice, combined with grants, aims to be a high-impact, cost-effective way to back Australia ideas and build capability.”
The consultation will close on 30 July 2023. The discussion paper can be found here.
