On 30 January 2018, Innovation and Science Australia (ISA) launched Australia 2030: Prosperity through Innovation (2030 Plan) providing its strategic plan for Australia to thrive in what it has described as a $1.6 trillion global innovation race. In this article we consider the vision the ISA 2030 Plan has for Australian SMEs, particularly in respect of the R&D Tax Incentive and Export Market Development Grant (EMDG) program.
R&D - an imperative for the Australian innovation, science and research agenda
ISA has identified five specific opportunities where Governments can exercise leadership, including improving R&D effectiveness by increasing translation and commercialisation. In conjunction with R&D, ISA has identified education, industry and government to create an innovative culture and ambition.
ISA has identified the following opportunities to promote innovation:
- Increase collaboration between the industry and research sectors by the introduction of a collaboration premium in the R&D Tax Incentive program;
- Increase institutional support for commercialisation of R&D by establishing a dedicated stream of funding for translation activities;
- Maintain Australia's high quality research output by continuing to invest in the national research infrastructure, commencing with high-performing computing facilities;
- Promoting great diversity in the research and innovation workforce to attract and leverage the best research talent; and
- Support growing momentum in Australian venture capital by taking measured and consultative approaches to any intervention.
Opportunities for SMEs
ISA has made a number of recommendations specifically targeted at SMEs and monetising R&D. Those include:
- Increased funding for the EMDG in addition to more trade missions and international promotions. This is envisaged to ensure Australia increasingly becomes an exporter of innovation.
- The introduction of a collaboration premium (up to 20%) for expenditure on public research institutions. It appears this would be available to medium to large companies accessing the non-refundable R&D tax offset (those with an aggregated turnover of greater $20M).
- Greater funding for Cooperative Research Centres (CRCs), CRC projects and Industry Growth Centres which ISA consider have "competitive strength and strategic priority" such as advanced manufacturing; cyber security; food and agribusiness; medical technologies and pharmaceuticals; mining equipment technology and oil, gas and energy resources.
- The introduction of a $4M annual cap on refundable R&D tax offsets and a lifetime project cap of $40M.
These recommendations continue to recalibrate the R&D Tax Incentive and EMDG program toward SMEs and strategic industries that may have a smaller R&D spend. Opportunities exist for collaboration with CRCs and universities to build and develop export-driven companies that are active innovators. Overall the ISA strategic plan reflects the desire to support and foster grassroots innovation across the economy.