With the release of its much anticipated National Innovation and Science Agenda (the NISA), the Federal Government has committed more than $1 billion over the next four years to turning around Australia's innovation performance.

Australia's poor record in translating research to commercial products and services is well known. We rank last amongst OECD countries for collaboration on innovation between industry and higher education and public research institutions.

Malcolm Turnbull's passion for changing this scorecard is obvious. Since becoming Prime Minister, he has stirred discussion and ideas about the role of innovation in Australia's future and what must be done to create the right environment for start-ups to thrive.

The choice to publicly launch the NISA at CSIRO's head office in Canberra was significant. Having been stripped of around $110 million in government funding in 2014, the NISA promises key Australian research organisations (including the CSIRO, the National Collaborative Research Infrastructure Strategy (NCRIS) and the Australian Synchrotron) $459 million over 4 years and $2.3 billion over 10 years.

The burning platform for committing this funding is the recognition that Australia's future prosperity rests on our ability to innovate, grow new sectors and compete with the rest of the world.

Key measures include dedicated funding to support start ups and entrepreneurs, changes to tax and insolvency legislation to encourage investment in start-ups and greater risk-taking, and incentives to foster collaboration between universities and business. A few highlights from the NISA are set out below.

GLOBAL INNOVATION, START-UPS AND CHANGES TO INSOLVENCY LAWS

Approximately $36 million will be invested over 5 years to establish "landing pads" in Silicon Valley, Tel Aviv and three other (yet unnamed) locations to support entrepreneurial Australians.

This Global Innovation Strategy aims to improve Australia's international collaboration performance and encourage Australians to leverage entrepreneurial expertise found in these key overseas locations.

A crowd-sourced equity funding scheme will also be set up to allow entrepreneurs to raise funds and to exempt companies for five years from normal reporting and disclosure requirements that apply to public companies.

A 20% tax offset (up to $200,000) for retail investors, as well as capital gains tax exemptions for investors who hold shares for more than three years provide an incentive for investment in potential high growth start ups (a similar initiative operates in the UK).

Changes to insolvency legislation will also facilitate an entrepreneurial environment which embraces risk. See our previous article, Making way for the innovation nation – Not being afraid to fail.

CSIRO INNOVATION FUND

Commencing in 2016, the CSIRO innovation fund will initially provide $200 million to support co-investments in new spin-off or start-up companies created by Australian research institutions.

The fund includes a $20 million investment to accelerate the commercialisation of publicly-funded research through the CSIRO's Accelerator programme.

CYBER SECURITY GROWTH CENTRE

Over 5 years, $30 million will be invested in a new Cyber Security Growth Centre to create business opportunities for Australia's cyber security industry.

Operational by mid-2016, the Centre will create a national cyber security innovation framework to ensure that government and businesses are able to identify, protect and respond appropriately to cyber threats.

UNIVERSITY AND INDUSTRY COLLABORATION INCENTIVES

New research funding arrangements (including additional funding of $127 million) provide incentives for researchers to work with industry and end-users to achieve outcomes with commercial and community benefits.

Over the next ten years $2.3 billion will be invested in the National Collaborative Research Infrastructure Strategy, the Australian Synchrotron and the Square Kilometre Array. This funding is to enable high-level capability in areas such as nanofabrication, food production, health, cyber security and sustainable cities.

Finally, a new $250 million fund (the Biomedical Translation Fund) will invest in promising biomedical innovation and commercialisation. This fund will draw on fund managers competitively selected from the private sector to invest in the critical commercialisation process (including clinical trials as well as regulatory and marketing approvals) that often take up to a decade or more to complete.

DATA REVOLUTION

A $75 million investment will establish a new research unit at CSIRO, called Data61. Merging NICTA and CSIRO's digital research unit, the research unit will improve industry cyber security and use data analytics to link and publicise different government datasets.

The Australian Government will begin releasing more non-sensitive public data for innovation within the private sector. This data will be made available at data.gov.au with only specialised data services attracting fees.

The response to the NISA from the research and business sectors has been generally very positive. We will issue further updates with more detailed analysis of the NISA. The full NISA statement can be accessed here.

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