The NSW government will consider launching a number of new funds as part of its “landmark” innovation strategy which sets a goal of nearly 2,000 new tech companies and 100,000 jobs over the next decade.
NSW Minister for Innovation, Science and Technology Anoulack Chanthivong released the 40-page NSW Innovation Blueprint 2035 earlier this week, heralding the state as Australia’s “innovation powerhouse” but flagging a number of challenges holding back its growth.
The plan sets a series of ambitious targets for the next decade, including the creation of nearly 2,000 innovation-intensive firms, nearly 100,000 additional jobs and $27 billion in additional investment in the NSW economy from these companies.
To do this, the plan outlines a series of priority areas and potential initiatives the state government will take to “cement NSW’s position as the innovation powerhouse of Australia and a leader in high-value industries”.
“We want NSW to be the best place to innovate, so that innovative businesses can create more economic and social opportunities for the people of NSW, and to help tackle the state’s most important challenges,” the state government said in a statement.
Innovation-intensive firms
The strategy focuses on “innovation-intensive” companies, which it defines as ones that have raised significant amounts of equity financing or have made significant investments in research and development as a share of overall expenditure.
The report says there are currently 5,218 of these companies in NSW, contributing a gross-value add to the economy of $39 billion, with 136,000 people employed across them.
The blueprint sets a goal of there being 7,012 innovation-intensive companies by 2035, contributing $66 billion to the state’s economy and employing 230,400 people.
The blueprint said that NSW already leads the way in Australia when it comes to innovation, accounting for 65 per cent of venture capital investment last year and playing home to five out of eight unicorn tech firms.
This is backed up by Startup Genome’s most recent Global Startup Ecosystem Report, which placed Sydney as the most favourable location for startups in Oceania.
But it identifies a number of areas that are holding it back from competing with global peers, including poor diversity, varying performance across industries and low rankings across a range of innovation metrics.
“NSW has a proud track record of innovation, but we cannot rest on our laurels,” Chanthivong said.
The plan sets out key priority areas for tackling these issues, including a strategic approach to funding, a focus on world-class innovation hubs and the further attraction of global venture capital funding.
New funds on the horizon
The state government will consider launching up to three new tech-focused funds as part of the innovation blueprint.
These include an Emerging Technology Commercialisation Fund, which would be a consolidation of the existing Physical Science and Biosciences funds, and an expansion of its remit to cover early-stage technology commercialisation funding rounds.
The state government will also consider launching a NSW Government Strategic Investment Fund to help “catalyse private sector investment in target areas”.
The blueprint said this could act as a “fund of funds”, providing capital to a portfolio of venture capital funds to support a “larger, diversified investor base for startups”.
“The significant gaps in funding available for innovation-intensive businesses in strategic sectors and for increased diversity in key founder demographics is an ongoing challenge to the growth of these businesses and their contribution to the creation of local, well-paid jobs and economic diversification,” the blueprint said.
The other fund the state government is mulling is an Innovation Infrastructure Co-Investment Fund, which would attract investment into NSW research and innovation infrastructure.
Under the plan, the oversight of innovation policy and initiatives will be handed to a steering committee of the NSW government executives, and work will be done to make funding programs easier to navigate and more equitable.
An innovation challenge and procurement program may also be launched, to help local companies access government procurement.
“NSW government could leverage the expertise of innovative NSW businesses and entrepreneurs to address wicked problems facing the government where solutions do not currently exist,” the blueprint said.
