Hunt’s $23M start-up fund a winner
The Rio Olympics was an exciting event for Australia’s participants and a nation full of sports lovers. Euphoric for some, heartbreaking for others, but exciting nevertheless. The performance of Australia’s athletes and coaching has been analysed to the nth degree and funding debates will rage.
But how many medals are enough?
Now the footy finals are upon us and the only measure of success is a premiership.
When Prime Minister Malcolm Turnbull launched his government’s “innovation agenda” in December, he said “there has never been a more exciting time to be an Australian business” and Mr Turnbull’s re-election suggests innovation will remain in the news.
Some commentators suggested his championing of the digital age was a factor in the less-than-overwhelming return of the government. They argued the Prime Minister failed to sell the benefits of digital transformation to “old economy” workers, who then shouted “what about us” at the ballot box. Further proof of the disrupted world in which we live.
Nevertheless the government has positioned itself well to embrace these “exciting times”. Significantly, Greg Hunt was appointed as Minister for Industry, Innovation and Science, and Craig Laundy as his offsider. Mr Hunt has hit the ground running and announced funding for incubators worth $23 million.
As CEO of Australia’s leading advanced-technology incubator, I recently visited Stockholm for the UBI Global Future Summit 2016. UBI Global, based in the Swedish capital, runs an international team specialising in benchmarking and indexing university business incubation programs.
Funding for incubators in Europe is incredible, especially those focusing on advanced technologies as opposed to businesses that can be run out of a kitchen or a garage. Millions of dollars are poured into deeper tech start-up support, whereas an equivalent government investment in Australia might be $200,000. But this is not a veiled exercise in lobbying.
Rather, I point to the crucial role of advanced tech that thrives through collaboration between industry, universities and government. ATP Innovations’ founders are ANU, USyd, UNSW and UTS and for us the successful co-operation is a significant factor, and no doubt crucial to our being named as the world’s best technology incubator in 2014.
The Global Innovative Index tracks the performance of well over 100 countries. In the just-released 2016 index, Australia’s overall ranking has slipped to 19 this year from 17 last year. We rank 20 for university/industry research collaboration.
The 2015 Australian Innovation System Report says total venture capital investment in Australia has declined to 0.017 per cent of GDP, ranking it low compared to many competitor countries. Australian venture capital investment has not bounced back to pre-global financial crisis levels. In 2014 such investment was 40 per cent of its 2007 level, with a substantial decrease in the amount being put into new companies.
On a ranking against OECD countries, Australia was 24/31 on the percentage of innovation/active SMEs collaborating on innovation; 29/31 on the percentage of innovation/active large businesses collaborating on innovation; 26/26 on the percentage of innovation/large businesses collaborating with universities; and, 18/27 on early stage venture capital investment.
Benchmarking against the US on a per capita basis tells a similar story. In 2015, the US National Institute of Health spent $US32.2 billion on health and medical research, which equals $US99 per capita while commensurate health venture capital was $US37 per capita. In comparison, Australia spent $5.9bn on health and medical research, which equals $245 per capita, but the commensurate health venture capital was a paltry $1.90 per capita.
Australian advanced technology delivers sustainable results and there are start-ups in all industry verticals. We can only imagine what could be achieved with European-scale support. Advanced technology requires hard work, but the pay-offs are better for society as a whole. ATP Innovations exists to build ideas that need lots of capital, but more importantly lots of time.
I didn’t come away from Sweden daunted so much as chastened. Australia is well placed to make an impact with its knowledge-intensive businesses, provided they can get the desired exposure. These types of businesses solving major problems really should be our sweet spot, but by and large a lot of them are ignored.
Those “old economy” voters who worry over the PM’s vision probably don’t know about UpGuard or MarathonTargets. UpGuard was incubated at ATP Innovations for three years before entering the world stage with its cybersecurity technology and is now helping solve one of this century’s most fundamental challenges. Marathon Targets is defending Western civilisation in another way. Originally from the University of Sydney, Marathon Targets is building robots to help soldiers become sharper shooters.
As with the Olympics, Australia has a great track record in advanced technology and ATP Innovations is a gold-medal performer. But there is always room for improvement.
Many Australian athletes and footy players are nurtured in university programs. Similarly, the quality of research undertaken within Australia’s university sector is not in question. The challenge lies in bridging the divide between the academic and industry communities.
ATP Innovations is industry agnostic and with our university founders we look forward to collaborating with Mr Hunt. It’s incumbent on all of us to ensure our great entrepreneurs and their ideas are nurtured. We can change the world one start-up at a time.
Petra Andren is ATP Innovations CEO.
This article was originally published in the Australian.