Australian entrepreneurs: Here's what Turnbull's innovation plan missed

Photo: Alexander Hassenstein/Getty Images.

The signature policy of Malcolm Turnbull’s new government – the national science and innovation agenda – was unveiled yesterday to mostly positive views from the business community.

But not everyone was impressed, with The Start Society founder Pete Cooper letting rip over the lack of support for startup incubators.

As other entrepreneurs started to pick through the policy document, they also found areas overlooked by the PM and innovation minister Christopher Pyne, who admitted as they released the policy on an “ideas boom” that some of their ideas might fail too, but the point was to keep trying innovative ideas until ones that work are found.

Here are some suggestions when they start looking for the next ideas boom.

Russell Francis, CEO of Perth-based Velpic.

Francis was recently named ‘Most Disruptive’ of the Year by Talent Unleashed and had the chance to pitch the idea behind Velpic to Richard Branson. He says:

“This is an inflection point when it comes to transforming our traditional, resource-based economy to one built to last in the digital world. But it is just the start. The government is asking the country to be in it for the long haul and that means we need rigorous, long-term government support to ensure our businesses, schools and research organisations can thrive and prosper, not just in the next 5 years, but in the next 50 and beyond. With a new agenda taking shape, we must continue to push the boundaries of what we can achieve.

“Creating a culture of innovation means leveraging technology across every sector to nurture economic opportunities that are just as appealing as the Australian lifestyle itself. Australia is already an incredible place to live, but as an IT professional who spent close to a decade working abroad, I know how challenging it can be to reverse the brain drain and forge a new identity as a global tech leader. We need be clever in developing tax incentives, share options and other policies that encourage the best of the best to bring their talents and skills to us. But we should not wait for the new policies to go into effect in another year or so, we must start creating that culture of innovation today.”

Barry Thomas, MD of Cook Medical Australia.

Cook Medical has been working with industry leaders including AusBiotech, the Export Council of Australia, and the Medical Technology Association of Australia (MTAA) to develop the proposal for the AIM Incentive, but managing director Barry Thomas said he was disappointed by the lack of attention paid to manufacturing.

“Today’s statement lacked any significant changes for manufacturing. As one of the few successful manufacturers left in Australia, we believe this is an issue that needs to be addressed urgently,” he said

“What Australia needs is some bold leadership and decision-making. The same sort of brave policy reform that saw Australia as the first country in the world to introduce the R&D tax incentive, the kind of thinking that led the UK to introduce its patent box tax incentive – a decision they must be celebrating as early reports of manufacturers returning to the country’s shores emerge.

“It is impossible to address innovation and commercialisation without also supporting manufacturing. We believe the best way to do this is through a tax incentive for commercialising Australian innovation in Australia. This week we also heard from the Australian Advanced Manufacturing Group and the Australian Industry Group, which both want the Government to consider this measure,” Thomas said.

The Innovation Statement currently only includes plans for tax incentives for investors supporting start-ups. On the subject of commercialisation, the Government plans to introduce an Innovation Connections program, which will invest $18 million to expand and relaunch the existing Research Connections scheme, seeking to better connect industry with researchers.

“It’s vital that research and development is supported. However, focusing on this part of the innovation cycle alone will not automatically foster higher levels of commercialisation here in Australia. The conditions that make it unappealing to manufacture in Australia still remain, including one of the highest corporate tax rates in the world,” Thomas said.

“We believe that one way to turn around the future of manufacturing is to introduce a ‘patent-box’ style tax measure: the Australian Innovation and Manufacturing (AIM) Incentive. This tax incentive has been designed to reward manufacturers who produce and commercialise products in Australia.

Twelve countries, including the UK and China, have introduced similar measures, and the US is currently considering it.

“As more and more countries move to introduce such incentives, the risk of losing key opportunities increases. Not only does this mean that manufacturing becomes even less appealing here in Australia, but R&D also needs shifting in order for new innovation to qualify,” Thomas said.

Eric Schwantler, general manager, Dekko Secure.

Dekko Secure GM Eric Schwantler.

Dekko Secure is cloud-based secure email, chat and document storage business and has recent hacks, including suspected Chinese hacking attacks on the Bureau of Meteorology show, cyber-security is a critical issue.

Dekko general manager Eric Schwantler argues innovation can only encourage economic growth when the technology and IP behind it is protected and secure.

“Businesses looking to be a part of the ‘Ideas Boom’ must improve not only the way they innovate and collaborate but also how they protect the valuable data that drives and sustains those innovations,” he said.

“While a new $22 million ‘Cyber Security Growth Centre’ is said to be in the works, noticeably absent from the announcement were the Coalition’s plans to better protect Australian infrastructure and defence facilities in the face of increasingly sophisticated cyberattacks and to encourage businesses to take a more proactive approach to cybersecurity. That includes developing and embracing smarter, easy-to-use solutions that protect our most important information, while maintaining transparency and accountability.

“Investing in human capital is the way forward in the future, but I think the Prime Minister statement that the Ideas Boom will only be limited by our imagination is incomplete. Protecting these investments is critical for their success and in today’s digital economy, it will be up to forward-thinking businesses to embrace strategies and solutions that promote security without jeopardising productivity.”

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