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Slash & burn

Slash & burn

The loss of the Commercial Ready grant scheme will send small companies to the wall

The headlines have said it all over the past two weeks regarding the termination of the Commercial Ready Grant scheme. Wayne Fitzsimmons, director of M-Group, recently commented: "The abrupt termination of the scheme caught many of us by surprise as there were no portents signalling any likelihood of such a change. There is no likely alternative in the short term at least. This will cause several of my early stage companies significant challenges and, for some, a likely cessation of trading."

All this was unexpected and it has been estimated that around 220 Aussie ICT start-ups have been caught off guard by this surprise axing.

The same week from the Innovation Minister Hon. Kim Carr's office came a memo claiming "Innovation is the key driver of productivity and economic growth, particularly for advanced economies such as Australia. It drives the creation of new businesses and sectors and revitalises existing industries. The initiatives announced in the Budget align with the Government's commitment to fiscal responsibility and the introduction of a sound policy framework, while incorporating measures that will improve long-term economic outcomes for industry, the research sector and the wider community"!

The Australian ICT sector is vital to the country as a whole, to our economy, to public service, and to citizens both young and old. Ever closer collaboration between the government and the sector is essential if we are to grasp the opportunities at hand.

Whilst it's almost impossible to imagine life without technology, the sector's contribution to wealth-creation is not always fully recognised -- political support for the industry is critical. In India NASSCOM is revered as a powerhouse at the heart of the economy and the President and Prime Minister regularly attend the annual NASSCOM leadership summit. The 2020 summit was another sore point for the Aussie ICT Industry -- only four representatives attended.

"There is substantial recent evidence," commented Wayne Fitzsimmons, "to show that for every dollar made available through Commonwealth funding mechanisms -- Commercial Ready, START, Pre-seed programs -- there are at least eight dollars contributed by private equity. Far from indicating that this proves funding from the Commonwealth is unnecessary, it is the availability of such funds at the very early stages of a start-up's life -- where proof of concept, early prototype development, etc. are mandatory -- that then attracts the private funding to achieve the multiplying effect. Let's hope the private equity and the SME sectors of the ICT community can have early constructive dialogue with the appropriate federal ministers".

At this week's CeBit Ausinnovate Conference, Senator Stephen Conroy, Minister for Broadband Communication and the Digital Economy, highlighted that the government has a clear vision for harnessing the potential of Australia's digital future. "We are pursuing a co-ordinated approach to ensure Australians have the infrastructure, confidence, skills, and regulatory environment they need. By doing this we can create a foundation for economic prosperity for the decades to come. We will have a vital platform supporting Australian innovation. Australian companies will be better placed to attract investment and commercialise their products," the minister said.

It seems that there are more than a few things that need to be highlighted with the Minister for Innovation and the rest of the government about ICT's role in Australia's future.

Len Rust is publisher of The Rust Report


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