In Australia, we are regarded as being very good at research and invention but poor when it comes to collaboration between research institutions and business, and particularly lacking when it comes to commercialisation.
Today’s Innovation Statement a.k.a. ‘Welcome to the Ideas Boom’, seeks to address this issue and re-create Australia as an Innovation nation of thinkers, doers and collaborators.
The government wants us to not only acknowledge that science needs business and business needs science, but to find constructive and productive ways for both sectors to align.
Key features of the statement include:
- A $200 million Innovation fund that will co-invest in businesses that develop technology from the CSIRO and Australian universities.
- $106 million in tax incentives for "angel" investors, who provide seed funding in the early years of a venture's creation
- $75m to the CSIRO's data research arm Data 61
- $48m Science Technology Engineering and Mathematics (STEM) literacy program
- A $36m "Global Innovation Strategy", helping entrepreneurs get started in Silicon Valley & 4 other locations, as well as a $22m funding project with Germany's Fraunhofer Institute.
So, what does the Innovation Statement really mean for business and what should your business be doing to make the most of it?
Here we address the 3 headline features of the statement.
1. Start-Ups, Entrepreneurs & Seed Funding
If you run an established business, you might be left wondering what is really in it for you. There was an awful lot of talk about entrepreneurs, start-ups and launching pads but far less about existing businesses. Admittedly, it would be easy to feel neglected.
Start-ups might be sexy but it’s important to remember that existing businesses already have a lot of what they need: infrastructure, collateral, connections and experience, which, if combined with entrepreneurial and creative thinking, still gives you a huge competitive edge. Likewise, whilst there are going to be tax offsets for angel investors who provide seed funding to new ventures, angel investors often prefer the stability and gravitas offered by an established company. This, for example, could provide existing businesses with an incentive to diversify and launch new ventures. It’s too early to know the finer details of these tax offsets, but don’t be deterred just yet!
2. Business needs Science. Science needs Business. Australia needs both.
Unsurprisingly, one of the driving forces behind today’s Statement was collaboration between research institutions and business, with over $200million being dedicated to the cause. Whether you’re a large or small, new or existing business, with some strategic thinking this ‘Innovation fund’ could be a terrific opportunity.
Nevertheless, this doesn’t just mean checking your LinkedIn profile for researcher connections (although they could come in handy). A variety of perspectives enhances the development and implementation of Innovation but it is only as effective as your strategy for action. For businesses to make the most of this fund, having a strategy and effective process for implementation and commercialisation will be vital, as these are often skills lacking in research facilities. Make sure you have such processes embedded in your business, otherwise you’ll be at risk of wasting the opportunity.
3. Culture and Capital to Increase Risk-Taking.
The government is keen to encourage risk by promoting a trial and error approach to start-ups, which is specifically manifested in their new bankruptcy policy, effectively reducing a bankrupt’s dormancy period from 3 years to 12 months. Whilst it is relatively easy for a start-up to take risks and gamble with the threat of bankruptcy, the same cannot be said for established organisations, for which the implications reverberate much deeper.
Nevertheless, a culture that is supportive of failure is one that we encourage, regardless of your business’s age or size. To achieve success, you must have a culture that accepts failure as part of the Innovation process, otherwise fear and normalcy dominates. Time will only tell whether the government’s culture for failure will be long-lasting, but in the meantime businesses can certainly be improving their relationship with risk. Ensuring you have an Innovation process that supports failure through low-fi prototyping, iteration and design thinking is a huge advantage in the race to innovate. Likewise, encouraging your team to dream big is the only way to achieve the big dream.
Regardless of your political affiliations, your likes or dislikes of what was or wasn’t included, we need to get behind today’s Innovation Statement and look only for the opportunities it offers us. If you’re in business today, view today’s Innovation pledge as a potentially useful stepping stone to your Innovation activities, but remember the growth, development and success of new ideas will only be as good as the process, tools and skills you use to deliver them.
Ultimately, for ideas to boom, your business needs to know how to get behind them.
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