The Federal Government has committed $188.5 million in funding for key Australian growth sectors over the next four years.

The Industry Growth Centres Initiative (the Initiative) is part of the wider $400 million Industry Innovation and Competitiveness Agenda policy announced by the Government on 14 October 2014. The policy can be read here.

The five growth sectors identified in the Initiative are:

  • Food and Agribusiness;
  • Mining Equipment, Technology and Services;
  • Medical Technologies and Pharmaceuticals;
  • Advanced Manufacturing; and
  • Oil, Gas and Energy Resources.

The Industry Growth Centres (the Centres)will be established in each of the above growth sectors, with Government floating the possibility of establishing more Centres in the future.

Described by Government as focusing on Australia’s areas of competitive strength, the aim of the Initiative is to foster and grow competitiveness and productivity in high value and export-focused industries.

The policy refers to Australia’s significantly lower rate of strategic commercial research and development partnerships, as compared to other OECD countries. It cites data showing Australia as the lowest ranked country out of 33 listed by the OECD on the proportion of businesses who collaborate with research institutions on innovation.

Through the Competitiveness Agenda, the Government aims to achieve four overarching ambitions:

  1. a lower cost, business friendly environment with less regulation, lower taxes and more competitive markets;
  2. a more skilled labour force;
  3. better economic infrastructure; and
  4. industry policy that fosters innovation and entrepreneurship.   

Overarching activities that all Centres will be tasked to complete include:

  • supporting industry-led projects between the research sector, SMEs and large business to develop innovative products and services;
  • development and implementation of a roadmap of priority actions to lift sector competitiveness;
  • working with Government on how to best reduce regulatory burden within their sector;
  • development of annual industry knowledge priorities to help inform the research sector of industry needs and commercialisation opportunities.

On 16 September 2014, the Government also announced a review of the Cooperative Research Centre (CRC) program, which is also focused on supporting collaborations between industry, the research sector. It is possible that some CRC projects could be rolled into the new Centres.

ESTABLISHING THE CENTRES

Each Centre – a not-for-profit organisation led by industry leaders – will be required to present a case outlining its plan to be self-sustaining after four years.

The board of each Centre will comprise of representatives from small to medium business operators, prominent scientists and researchers, respected business leaders and representatives from multinational companies.

Each Centre will be established in early 2015, with Federal Industry Minister Ian Macfarlane calling for expressions of interest across the five sectors from parties interested in establishing the Centres.

GROWTH CENTRE INFRASTRUCTURE

The Centres will be encouraged to develop and deliver large scale collaborative projects.

Funding of $63 million will be made available to the Centres for the conduct of projects with a focus on market, value chain or technology issues to deliver commercial outcomes.  The projects must have – at a minimum – matched contributions from industry participants.

Grants of up to $1 million will be available to Centres through the Entrepreneurs’ Infrastructure Programme.

In addition, the Government claims that a new information technology platform – the Industry Growth Network – will provide the Centres with the necessary infrastructure to extend their reach.

COURTING CRITICISM

In announcing the policy on 14 October 2014, Minister Macfarlane stated that the Government wanted to “take industry away from a dependency mindset and into an excellence mindset”.

The Initiative has drawn criticism in some circles, with the Government’s $188.5 million contribution seen as inadequate.

Australian Farm Institute executive director Mick Keogh recently labelled the four year time frame given to securing self-sufficiency of the Centres as unrealistic.

However, the Government believes that funding of up to $3.5 million per year for each of the new Centres will enable all five to become self-sustaining after just four years.

WHERE TO NEXT?

 The Government is progressing the Industry Innovation and Competitiveness Agenda and on 29 October 2014 it released its Consultation Paper titled “Boosting Commercial Returns from Research”, which can be read here

The Consultation Paper states that the Government is committed to developing and implementing a strategy which will improve Australia’s economic performance through better translation of research into commercial outcomes.

The Paper seeks submissions from the research sector, business and other interested parties on a range of issues, including:

  • adjusting research funding mechanisms to provide greater incentives for collaboration between research and industry;
  • supporting the provision and maintenance of world-class research infrastructure to attract the world's best researchers and facilitate collaboration with industry;
  • promoting intellectual property arrangements that facilitate, rather than frustrate, collaboration and commercialisation of ideas;
  • ensuring research training prepares researchers to work with industry and bring their ideas to market; and
  • improving assessment of the research system, including measuring and publishing collaboration and commercialisation outcomes, as well as research outcomes and impact.

In a press release issued on 30 October 2014, Universities Australia expressed its support for the direction taken in the paper but also indicated it would carefully review the detail of the Government’s proposals to ensure there were no “unintended consequences” and to ultimately ensure that the strength of the University research sector is maintained.

The Consultation Paper is open for comment until 28 November 2014. 

We will provide further updates as further detail is revealed on the Industry Innovation and Competitiveness Agenda and, in particular, the Industry Growth Centres Initiative.