The Department of Industry, Science and Resources (DISR) has been seeking responses to its Consultation Paper for its new flagship Industry Growth Program (IGP) during July 2023. The IGP replaces the Accelerating Commercialisation (AC) grant program.  Readers who have experienced the old AC program or other Commonwealth Government programs understand that there is an opportunity to reshape how this funding program operates so that it better meets business needs.  A snapshot of opinion from our client base in response to Consultation Paper questions is below.  Readers might agree and have additional perspectives – make them known.

1.  How should the IGP determine which projects have the most potential for future growth and market impact?
There is no way to determine whether successful or unsuccessful applicants are more likely to succeed.  A grant process that requires applicants to write a thesis is no more likely to ensure success or enable any analyst to ‘pick a winner’ than a sector specific VC portfolio manager.  This judgment is ultimately entirely subjective.  Is there any qualitative difference between applicant companies that receive a grant and other companies that pass all merit criteria and are denied a grant, or applicants that score lower and also get no support? If not, is there value in rationing grant access via a so-called ‘competitive process’ that pitches good ideas against each other. How does this achieve the overarching objective of Government grant funding, namely to extend and deepen the technology capabilities and financial success of Australian industry in priority sectors?

Is there a fairer or more objective way to determine who gets what and eliminate the ‘lucky dip’ nature of grant awards so that we achieve program objectives more purposefully?   Maybe all applicants that pass a certain high threshold with the focus on claim validation should receive a grant?  Maybe all commercialisation grants should be repayable over time subject to certain triggers? At least this way, applicants become accountable not just to complete the Project but also deliver post-Project outcomes.  Applicant’s capacity to do this may impact future grant eligibility.  Program success might then be measured transparently as the proportion of grant funds that are repaid over 1, 2, 3 and 4 years after project completion tat can be recycled.

2. Is ‘need for funding’ a useful merit criterion?
What purpose does this serve in the context of program objectives? The argument that the IGP or any grant program should be the funder of last resort as a way to prevent ‘crowding-out’ of private investment is a fiction. ‘Need for funding’ should be neither a threshold criterion nor a factor in determining comparative merit.  If anything, grant programs should be used to ‘crowd-in’ or catalyse private investment much more deliberately than they do today.  There are many ways to do this.

3. Are there potential barriers to accessing a grant program like the IGP?
Here is a list: (i) bureaucratic grant processes that demand an unnecessarily large volume of initial and supporting material that have little relationship to ultimate project success; (ii) extended program decision timelines (up to 6+ months) that have no relationship to commercial needs.

How about a single application form?

4. How should Commonwealth and State grant programs interact? (this question is one of our own)
State Government programs often overlap Commonwealth Programs.  SME’s complain that cross-government grant programs lack integration and sector focus.  There have been some programs led by States that attract top-up funding from the Commonwealth if certain additional criteria are met.  This type of strategic alignment always has merit.  Industry expects this level of Commonwealth and State coordination of industry policy and funding support.

5. What other design elements should be considered?
Transparency and probity (process integrity) are high on the list.  Grant programs should publish reasons for their decisions to applicants and should certainly publish guidelines about the level of maturity hey expect to see in grant applications so businesses can work to become ‘grant ready’.  Grant programs might also consider removing extraneous policy criteria that have no impact on applicant success in the marketplace.  For example, to what extent should large increases in employment remain a merit criterion when most businesses are automating and digitalising to improve efficiency and productivity of their existing workers?

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