Australia’s Innovation Minister has welcomed a comprehensive blueprint for “prosperity through innovation” that recommends 30 measures to help businesses contribute to growth, including by expanding the export grants available to small businesses.
Innovation and Science Australia, headed up by venture capitalist Bill Ferris, today unveiled the ‘Australia 2030’ report, listing recommendations across five key areas for ensuring the country doesn’t get left behind in the “global innovation race”.
The blueprint includes suggestions for upskilling Australians, ensuring businesses can be innovative and that governments act to become “catalysts for innovation”.
The report highlights the importance of a strong exports market, with the extension of the country’s Export Market Development Grants championed as a key strategic opportunity for the government to boost innovation.
The scheme, which is currently in operation, gives SMEs an opportunity to be reimbursed by up to 50% of their promotional activities when exporting goods, for up to $150,000 per application.
Fairfax reports the scheme cost $131 million to the budget bottom line in 2016-17, but Ferris said on Tuesday he would like to see the program double.
His recommendation follows similar calls from business groups in the past, including the Australian Chamber of Commerce and Industry, which lobbied for funding for the grants scheme to be restored to $200 million a year back in 2016.
The report argues increasing the export activities of high-growth small businesses will contribute a “significant upside” to the Australian economy.
More support should be given to smaller operators in accessing overseas markets, the report’s authors argue, because gaps in SME knowledge about how to expand overseas will become a more “significant issue” as the export market becomes more sophisticated in the Asia Pacific region.
In his introduction to the report, Ferris considered how exporting capabilities have always been key to Australia’s economic growth, even throughout the mining boom.
“It was extraordinary innovation, risk-taking and export success that led farmers and miners to their world-leading positions,” he said, reflecting that Australian industry will have to think globally and focus on scaling high-growth companies in years to come.
While direct grants have been championed as a way of getting more small businesses into overseas markets, the country’s Research & Development tax incentive has also been put under the microscope in the report.
The report suggests the government should consider whether such tax incentives for companies do in fact result in “genuine” boosts to research and development in Australia.
SMEs have been seeing results from claiming the tax incentives, Innovation and Science Australia says, but there should still be a more strategic approach to how the program works.
This includes adopting recommendations from a 2016 review into the scheme to make it clearer who is eligible for it. The report recommends the scheme should allow companies to claim a cash refund of up to $4 million a year for research activities, capped at $40 million cumulatively per company.
However, the report also advocates for the government to think about ways to move more funds to direct grants for research and development, rather than just relying on the tax incentive.
The new blueprint has been released just over two years after the government outlined its original Innovation Agenda.
In a statement this morning, Minister for Jobs and Innovation Michaelia Cash said small businesses should be recognised for their role in innovation.
To “become a top tier innovation nation we need everyone to be involved”, she said.
“Last year we had record jobs growth and it’s small high-growth firms that are significantly contributing to the creation of these jobs.”
In a statement to SmartCompany, Minister for Family and Small Business, the Workplace and Deregulation Craig Laundy said SMEs remain a key part of the government’s innovation policy planning.
“Small businesses are the engine room of job creation and a key part of the innovation system so it’s important they can grow and diversify.”