Malcolm Turnbull announces further $15 million in funding for incubators and accelerators
With the election in full swing, Malcolm Turnbull is well into promoting the Government’s $1.1 billion National Innovation and Science Agenda (NISA) as an important part of the plan to create jobs and growth. Giving the startup sector something new to chew over, today Turnbull announced that if re-elected he will invest a further $15 million into NISA’s Incubator Support Program to drive support within the startup ecosystem.
Initially given $8 million, the Incubator Support Program’s funding will be increased to boost the number of startup incubators and accelerators in Australia, particularly in regional areas, and support existing “high performing” programs. The proposed initiative will look to help attract ‘experts in residence’ to provide specialist advice to startup businesses, and give new and existing incubators and accelerators access of up to $500,000 in funding.
Alex McCauley, CEO of StartupAUS, said while this latest funding announcement is overall good news for the sector, particularly since it was an important area of the NISA that was “substantially underfunded”, it is still far from sufficient and there are at least three to four areas that both government parties need to address.
“If we really want to boost the quality and output of our entrepreneurs we can’t ignore coworking. Most startups are in coworking spaces and don’t have access to the facilities on offer in incubators or accelerators – StartupAUS would like to see the program expanded to help coworking spaces fund accelerator-style opportunities to help their resident companies grow quickly,” he said.
“Both sides of politics recognise that innovation is a priority area for Australia’s future prosperity, but the election campaign has been notable for its absence of policy in this space. We’ve been told for some time that the series of policies announced by both sides last year was just the beginning, so we’d like to see both sides do more in this election campaign. If we want to build a thriving tech startup sector in Australia we’ll need more of these sorts of practical policy commitments, as well as some ambitious, big-picture thinking,” he added.
The Government’s initial funding for the Incubator Support Program had attracted criticism, with Rohan Workman, director of the Melbourne Accelerator Program, writing in the AFR earlier this year that the government’s plan to provide “new and unproven” programs with up to $200,000 in funding was “flawed”.
“Just like venture capitalists wouldn’t invest $5 million in an early-stage startup when it hasn’t proven the core assumptions of its business, neither should the government invest the largest amounts in unproven programs. Only when a business is ready to scale do you increase the investment. This scattergun approach belies the very ethos of startup investment in which more cash is given to startups that are more advanced and are a lower risk,” Workman wrote.
However, he said today that it is “fantastic” to see the Government expand the funding.
Ivan Lim, cofounder of BROSA, a graduate of Melbourne’s Accelerator Program, also welcomed the additional funding, explaining that as a young business and an early-stage entrepreneur, small things like having your own desk space and having access to various facilities is what makes these programs very beneficial.
“Accelerators are very important in the early days to obtain credibility for your business. For me and the team, it helped provide moral and psychological support as well as credibility in the early stages trying to find people who would listen to us,” he said.
However, Lim said the additional funding the Government has announced today is still not enough to have a drastic impact on the promotion of entrepreneurship in Australia.
“While I applaud the additional funding that the Government announced today, they need to provide more than just money. If both political parties want to truly support innovation, there are additional ways than just more money. For example, the Singapore Government has provided APIs/datasets from its public agencies to create the building blocks for driving innovation so now people can build products and solutions,” he explained.
The Government has also been criticised by some in the community for its support of international accelerators and incubators over local programs, in April announcing a partnership with Boston-based accelerator MassChallenge that will see the organisation’s international bridge program run in Australia this year, with the launch of a full program to come in 2017.
Meanwhile, the Labor Party’s own plan for incubators and accelerators, released late last year, centered on boosting regional innovation through the creation of up to 20 new accelerator programs over three years. It would give up to $500,000 in seed funding to programs launched by a consortia involving at minimum a regional university or TAFE, local government, and a local business organisation or group of local businesses, which would have to match the funding dollar for dollar.