A new report released by the Federal Government - Australian Innovation System Report 2015 - has highlighted the importance of entrepreneurship to innovation and transforming the nation’s economy.
In a report that focusses significantly on start-ups and young companies, the lack of venture capital is identified as a significant issue, which has been consistently identified as a barrier for Australian biotechnology companies.
"Mature businesses are receiving a significant share of start-up and early expansion capital," says the report. "Alinejad et al. also found that mature firms generally receive more than twice the investment per firm compared to young firms at all stages except the start-up phase."
It continues, "It is possible that these more mature businesses are in life sciences, where the life cycle of a typical firm is longer. The viability of many pharma/biotech start-ups depends on the production of promising clinical trials data. This can take many years. A six-to- ten year-old pharma/biotech firm may therefore be relatively ‘young’ in terms of their activities and prospects for commercialisation."
The report was released by Chair of Innovation Australia Bill Ferris during a speech to CEDA in Adelaide, during which he also called for a strengthening of Australia's innovation culture.
Minister for Industry, Innovation and Science, Christopher Pyne, said while Australia performed well in terms of entrepreneurial activity only a very small number of start-ups go on to grow dramatically.
“We have one of the highest rates of entrepreneurship amongst developed economies. But we need to improve in terms of innovation-driven entrepreneurship,” said Mr Pyne.
“Innovative entrepreneurs play an integral role in improving productivity and growing the economy because they are ‘agents of change’, creating opportunities for themselves and others."
The report shows that between 2006 and 2011, the activity of start-ups (firms two years old or younger) added 1.44 million full-time-equivalent (FTE) jobs to the Australian economy, whereas all other firms shed more than 400,000 FTE jobs.
“The report’s findings reinforce what the Government has been saying for some time about the importance of innovation," said Mr Pyne.
“The Government recognises that innovation, science and entrepreneurship are crucial to establishing the jobs of the future and securing the country’s future economic prosperity."
AusBiotech has expressed concern that the Government is focussing much of its innovation agenda on information technology, with the risk that the adoption of a one-size-fits-all approach may not meet the needs of the biotechnology sector.
“What suits one technology sectors will not suit another," said CEO Dr Anna Lavelle. "They have very different life cycles, they dominantly prefer different types of intellectual property protections – some use patents, some copyright or know-how, some use industrial designs – they have various commercial structures, and points of maturation."
She continued, “ICT does not equal biotech or medtech, and making policy to suit only ICT, or only biotech, and expecting innovation to win is missing the point and possibly the great opportunity that is available to Australia now."