Gemaker’s Response to the Industry Growth Program Discussion Paper

gemaker welcomes the opportunity to participate in the consultation on the Industry Growth Program.

gemaker provides expert advice, services and training in the commercialisation of Australian research and innovation. Our senior team members average more than 22 years’ experience in this field.

Since 2011, we have helped 45 research organisations, 11 Government agencies and 88 innovative businesses – ranging from start-ups to fast-growth SMEs to ASX-listed companies – to take new knowledge and technology to global markets.

The highlights of the gemaker response to the Industry Growth Program discussion paper are:

  • The definition of SMEs should be made consistent across government procurement, ATO, ABS, and ASIC for business funding. Businesses of similar sizes should be assessed together. If the Department wants to focus on funding smaller companies, then use a $25M cap with no employee cap.
  • Commercial market readiness level (CRL) and technology readiness level (TRL) both need to be used to determine project eligibility. Commercial market readiness is of equal importance to the technology development level especially for the later TRL levels.
  • Small initial grants are immensely valuable to the SME community to support and assist them in building innovation and conducting market assessments on high-risk/low-TRL projects. These small grants of up to $100k should be funded on an 80:20 (grant: applicant) basis. A 50:50 level of funding is appropriate for later-stage projects (ie TRL 5+) where the funding assists businesses to scale up and enter new markets.
  • Implement a tiered level of grants so that businesses can start small and grow as they successfully advance along the commercialisation pathway. This reduces grant application effort, provides pre-qualification based on past success, and allows early businesses to start small and advanced businesses to start further along the pathway.
  • A key requirement for funding should be that applicants can show that they can fund their portion of the grant. The need for funding can be used to rank applications within a tiered level in addition to the importance and value of the project to Australia.
  • The second Valley of Death that all companies face is securing first customers. Consider the ongoing funding of a Small Business Innovation and Research (SBIR) program similar to the long-standing US scheme that is accessible to all SMEs. Australian federal and state governments had started implementing these programs before COVID, but these efforts have since lost momentum.
  • Improving the clarity of the grant forms, providing more guidance on what is required and having much faster evaluation results will improve the quality of the grant applications and allow more SMEs to apply for grants. Simpler forms should be made available for smaller grant amounts and more information on how the commercial-in-confidence information is treated is also required.
  • The industry partner organisations used by the government should have diverse skill sets in all stages of commercialisation, e.g. strategic business planning, market research, technology and IP assessment, and training. Committee members who are evaluating applications should have diverse industry sector and commercialisation experience.
  • Consider how other programs interact with this program and ensure that together they strengthen Australian SMEs and their ability to compete in world markets.  Establishing a Centre of Expertise for Commercialisation would provide a focal point for this. Training courses should be provided for SMEs to improve their understanding of their innovation readiness and their capabilities.
  • Education of and funding for marketing activities needs to increase. Commercialisation success relies on technology maturity and commercialisation activities including marketing. The lack of funding for marketing activities by most commercialisation grant programs reinforces the view that the invention is important and marketing is not. This combined with the general lack of understanding of marketing principles by SMEs increases the likelihood of market failure.
  • An important gap also exists in the funding and professional development supporting those that translate and commercialise research from universities and other publicly funded research organisations. It is recommended that part of the Industry Growth Program is dedicated to a new government-backed, scalable commercialisation and translation capability program that would drive commercialisation skills initiatives, growing Australia’s long-term commercialisation skills and capability policy framework.

Thank you to Warren Bradey, Sam Dymond, Klaus Krauter and Natalie Chapman for their contributions.