Entrepreneurs' Infrastructure Programme seeks comment

AusBiotech has made preliminary comment regarding the establishment of the Entrepreneurs’ Infrastructure Programme (EIP), based on questions posed in the EIP Discussion Paper (June 2014).

The government announced in the May federal Budget that it would close a number of programs (worth $845.6 million), including Commercialisation Australia (CA) and the Innovation Investment Fund (IIF), and establish the new Entrepreneurs’ Infrastructure Programme (EIP), worth $484.2 million over five years, “to implement its new approach to industry policy”.

The government has advised that the EIP will be delivered through the new Single Business Service initiative via the Department of Industry, which will be accessible through one portal with one call centre and helpline number. The portal, helpline and the initial services in the business management stream of the EIP are due to begin on 1 July 2014.

The government has advised that the services under the EIP will be refined following the stakeholder consultation and the EIP will support the government’s National Industry Investment and Competitiveness Agenda, which will be finalised in the coming months. The design of the EIP is also to complement other government programs that provide support to business, including the R&D Tax Incentive, Industry Skills Fund, Industry Growth Funds and the Manufacturing Transition Fund.

The consultation (5-19 June) paper provided details of the program’s proposed services, focused on the overarching service offering, with three streams: Business Management; Research Connections; and Commercialising Ideas.

AusBiotech said in its submission that despite the laudable goals and a range of good ideas in the new EIP, it was disappointing to see the cessation of CA and the IIF - and the even larger gap that now exists in commercialisation support and access to venture capital. Little in the new EIP addresses either of these ‘market failure’ gaps and the industry fears the decision to cut these programs without an alternative support or incentive may seriously damage Australia’s momentum in innovation.

AusBiotech agrees that attracting investment and exporting Australia’s goods and services requires further support, and therefore agrees with the suggestion (item 2.3 in Discussion Paper) that services that could be delivered under the EIP’s ‘Commercialising Ideas’ arm include preparing businesses to pitch to early-stage investors and activities to link markets to investors. AusBiotech has developed expertise in this area, due to the need that exists, and would be pleased to work with the EIP to develop these services.

Further to comments in question 1, the EIP’s “Commercialising Ideas” arm should dovetail with commercialisation arrangements for Medical Research Future Fund (MRFF), once they are established and/or known. The MRFF was also announced in the May federal budget.

Access to venture capital remains a critical issue for Australian innovation, with the nation’s innovations outstripping by far the available venture capital. AusBiotech would urge that a substantial portion of the EIP funds are used to support commercialisation grants and venture capital, as a priority.

AusBiotech also commented on the need for further tax reform to complement the R&D Tax Incentive. Australia already supports the R&D phase of IP creation via the R&D Tax Incentive, but then leaves it vulnerable to being sold, managed or manufactured overseas at the critical point. The resulting community and economic benefits - such as jobs, exports, manufacturing and clinical trials - go with it. AusBiotech is advocating for the introduction of the Australian Innovation and Manufacturing (AIM) Incentive, a ‘patent box’-style incentive to keep home-grown IP once it reaches commercialisation, as well as associated manufacturing, in Australia.

AusBiotech said that while it understood the need for expediency, the consultation period for the EIP was too short for meaningful consultation with AusBiotech members. Given the importance of specific policy settings to the future success of life sciences-based companies and their spillover benefits to the Australian community, AusBiotech would like to be closely involved as the program evolves.

The government has advised that the consultations will continue throughout June 2014.

The full AusBiotech submission can be found here. The government’s discussion paper can be found here.