Government looks to enthusiasm of SMEs with $1.8 million in grants awarded to help solve big problems

The federal government has turned to the expertise and enthusiasm of SMEs to solve some of its biggest public sector challenges, delivering $1.8 million in funding for 20 small businesses to start work on innovative projects.

As part of Malcolm Turnbull’s Innovation Agenda, $19 million was pledged in December 2015 for the Business Research and Innovation Initiative (BRII), which allows small Australian firms to pitch for funding to complete feasibility studies for solutions to big picture problems.

After the program was launched in August 2016, more than 180 small businesses presented ideas to the government in five key areas.

The areas were: technology solutions for measuring insecticide residues used on Australian aircrafts to kill mosquitos; development of “smart information products” for use by intelligence agencies; ways to use digital technology to get more people involved in policy consultation; ways to improve the transparency of water market information; and products to improve how information about child protection and safety is shared across state lines.

This week 20 SMEs were granted $1.8 million in funding to complete three-month feasibility studies on their solutions to these problems.

Each of the businesses will receive grants of between $69,000 and $100,000, and by June, the businesses will be able to show the government what they’ve been working on with the hopes of receiving an additional $1 million in funding to create a proof-of-concept.

From there, government departments will consider becoming the first customers of the standout products created.

Innovation minister Arthur Sinodinos said in a statement the grants will provide the successful SMEs with “a commercial income and the ability to grow with a global mindset”, while also allowing government agencies to “work with SMEs to develop innovative solutions and then have the option to purchase those solutions”.

“Our first round of seed funding”

One of the grant recipient, startup Leading Directions, told SmartCompany its $100,000 funding grants means it can bring one of its ideas into life without the need to seek out other investors.

Leading Directions provides business and case support solutions to disability service support providers.

It’s pitch to the government is to develop of a system that will improve the way states communicate information about child safety, to improve the operation of the child protection space.

Operations Manager Elouise Waller says that while the full details of the company’s pitch cannot be revealed at this stage, the initiative has been a fantastic opportunity for the business to get started on an idea that’s been bubbling away for a while.

“It uses three different components of software that we already run, and the rest of it is a new idea,” Waller explains.

“It should make the whole process [of sharing information] easier and secure.”

While Leading Directions has not previously been involved in pitching ideas to government in this way, Waller says the program has helped the business get started on an idea it otherwise would have looked to other investors for.

“See, that was the interesting part, we already had a couple of ideas that we were interested in doing and this acts as our first round of seed funding, which is awesome. It really acts as a springboard for our ideas,” she says.

“We’ve got until the end of June, so 12 weeks [to come complete the feasibility study] and then by the end of June, our applications have to be in for the prototype.

“After that is the really exciting part — we are allowed to retain the IP. And the push would be to scale on an international and national level.”

While questions have been raised over the past few weeks about whether the government has gone completely silent on its innovation programs, the Leading Directions team see this part of the plan as a key way to engage small businesses that have passion to solve big government challenges, rather than having departments go to big businesses for solutions all the time.

The Leading Directions team is small, and Waller says they have a personal focus on securing a solution to this problem that bigger companies are not likely to have.

“The government is tapping into this entire pool of ideas, innovation and most of all enthusiasm,” Waller says.

“This is really different from them approaching bigger players.”

When launching the BRII project on the Innovation Agenda website, the government highlighted that in a review of 140 countries, Australia ranked 70th in terms of how often government procurement leads to innovation.

The project is slated to continue over the next 18 months, as SMEs ideas and prototypes are considered for further funding of up to $1 million each.

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