More than $6 million will be distributed among 11 South Australian companies in a joint Federal and South Australian Government effort, but an SA-based investor group says start-up support is still lagging.
The Gillard and Rann Governments will provide $6.1 million to 11 innovative companies, with a particular focus on projects in renewable energy, manufacturing and engineering.
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Projects include the expansion of an advanced vertical automotive machining plant to manufacture hybrid vehicle engine components, and an investment in specialist engineering equipment to establish an engineering manufacturing cell and provide the state with a dedicated hydraulic centre.
Federal Innovation Minister Kim Carr said in a statement the funding is part of the South Australia Innovation and Investment Fund, designed to attract around $143 million in further investment in the state.
“The South Australian economy took a hit in 2008 following [the] closure of Mitsubishi at Tonsley Park. The Australian and State Governments responded by establishing this $30 million fund,” Senator Carr said.
But Michael Dilettoso, chairman of Adelaide-based investor group SA Angels, says aside from this funding, there has been “nothing too enthusiastic” from the Rann Government with regard to rebuilding South Australia’s innovation and investment sector.
“They pulled funding and started the winding down process of Playford Capital, which would invest in early stage companies, and help entrepreneurs and start-ups looking to attract funding, commercialise and grow,” he says.
“They’ve also closed business centres that provide important educational components for small businesses to up-skill themselves,” he says.
Dilettoso says the South Australian Government needs to foster an environment that generates innovation and “builds infrastructure around entrepreneurs that have the skills to build those fledgling businesses that are in sectors that will attract investment”.
He says while he is seeing a lot of interest in the clean tech space, there is no great influx or “coming out of the closet” of entrepreneurs requiring capital to expand because the support simply doesn’t exist.
“If they’re looking for an equity investor or debt funding, it’s impossible to find… It’s tough out there,” he says.
Dilettoso says while some South Australian companies choose to approach investors in other states, there are still opportunities within South Australia.
For example, SA Angels works closely with Innovate SA, which helps to accelerate the growth and development of South Australian companies.
“If a company approaches SA Angels and they don’t have the skills to gain investment, we will often hand them over to Innovate SA, which has educational programs in place to help entrepreneurs with commercialisation, business planning, marketing, exporting, etc,” Dilettoso says.
“They tend to percolate up through Innovate SA and then have an opportunity to pitch to us again… So a large component of what we do in assisting these businesses is to provide them with training and mentoring to be better placed.”