The Federal Government has announced it will set aside $1.6 billion for a new fund to support the commercialisation of research and development (R&D) and help nascent research projects pass through the high-risk proof-of-concept stage.
Unveiling the Government’s new Australian Economic Accelerator (AEA) initiative yesterday during a National Press Club address, Prime Minister Scott Morrison said the funding lifeline would help researchers bridge the ‘valley of death’ – an early, high-risk phase of R&D where projects often stall.
Acting Minister for Education and Youth Stuart Robert added that the AEA would deliver public funding through both the proof-of-concept and proof-of-scale phases of a research project’s development – and, in turn, help draw in industry investment in R&D with potentially high commercial value.
“The AEA will become a critical source of competitive funding support for innovating new projects with high commercial potential, and will take a lot of the risk and uncertainty for universities out of the equation,” Robert said in a statement.
The AEA features as part of a broader $2.2 billion research commercialisation package from the Federal Government focused on six national manufacturing priority areas: resources and critical minerals, food and beverage, medical products, recycling and clean energy, defence and space.
According to Australia’s peak body for the STEM industry, Science & Technology Australia (STA), the fund could prove a ‘game-changer” for local researchers, offering “vast potential to ‘level-up’ [Australia’s] research commercialisation success”.
“[For] too long, the country has lacked the support and infrastructure for more of our research to bridge the ‘valley of death’ between research and commercialisation,” STA president, Mark Hutchinson said.
This early seed capital, he added. would help take research beyond the proof-of-concept and prototyping stages – not only luring further capital investment from the private sector, but also enabling more products to be made in Australia.
“[The AEA] offers the possibility of turbo-charging Australia’s research commercialisation, by giving researchers support to ‘lean in’ to business, and helping business ‘lean in’ to the brilliant talent pool of scientists in this country.”
The CSIRO has also announced it will receive $150 million from the Federal Government to expand its Main Sequence Ventures program – the agency’s dedicated ‘deep tech’ investment fund.
First launched in 2017, Main Sequence Ventures has so far invested in 39 ‘deep tech’ companies, funding companies that drive R&D initiatives within the Australian university sector and back into the CSIRO.
Minister Robert broke down the likely pathway for the R&D grants allocation program, starting with a “big range of contenders – a contest of ideas”, which will subsequently be whittled down to around 30 companies that could be eligible for public funding of upwards of $5 million.
Stage one, for instance, could see nearly 100 grants of up to $500,000 awarded, Roberts said. For this, recipients would be required “to engage industry through in-kind support or even co-location”.
“But as we progress to stage two, the number of applicants will diminish and the value of the funding to each will increase.
“In order to be one of the 36 recipients attracting up to $5 million in funding as part of ‘stage two’ projects, industry will need to put more skin in the game with a 50 per cent co-investment.
“At stage three, up to 50 companies will be supported through the Main Sequence Venture, where we are providing $150 million in two successive co-investment funds.”
As part of the $2.2 billion R&D allocation, the Government has also promised $296 million for industry-focused PhDs and fellowships to support its research commercialisation goals and drive greater university-industry collaboration.
The new scheme is expected to create 1,800 industry PhDs and more than 800 industry fellows over 10 years.
“These initiatives will change the culture and the focus of research across Australia’s universities – building greater engagement with industry and ensuring that innovation is at the core of our economic future as a nation,” Robert said.
Robert, who has courted some controversy for his recent veto of six humanities-focused research projects, said the Government’s investment in the AEA is rooted in the ultimate goal of creating “new jobs, increased wages, and creating products that make life easier, more efficient or even more interesting”.