Speaking to: The Australian Financial Review: on Thursday, Mr Husic said an incoming Labor government would seek to make up for a failure of the Coalition to “properly back local know-how” during its lengthy term in office, saying the country had lost commercial opportunities and talented individuals overseas, due to a lack of assistance and incentives.
“So often with emerging technologies, Australians are recognized as being among the leaders of the pack, and then all of a sudden, there’s a sort of drift that occurs because there’s a failure by government to send a signal of support or back in what’s being done, and people just wander off overseas. We want to be able to correct that, ”Mr Husic said.
“We are in a potential environment of tightening capital, so we need to have something that is available that will ensure the development of these technologies, and particularly their application to the economy, still continues.”
Rather than setting the government up as a venture capital operator, it is likely the $ 1 billion will be operated as a “fund of funds,” forming co-investment relationships with existing venture firms and superannuation funds.
It is not being set up as a primarily start-up focused vehicle, and will target investments in companies of all sizes and ages, working in deemed crucial areas for future economic growth.
While details of the fund’s operation are yet to be finalized, the: Financial Review: understands a ministerial advisory board on critical technology will likely be set up, comprising subject-matter experts and people drawn from the investment community, to help advise an incoming Labor government, and the NRF board.
Founder of Sydney-based quantum start-up Q-CTRL Michael Biercuk said the policy announcement was welcome because Australia and its allies had a “once-in-a-generation opportunity” to build a greenfield quantum technology industry, which is predicted to be worth over $ 1 trillion over coming decades.
He said Australia was seeing early wins in the establishment of globally competitive commercial start-ups, which included Quantum Brilliance and Quintessence Labs in addition to Q-CTRL, but was facing a dilemma in sustaining companies that transition from start-ups to scale-ups and need growth funding.
“Access to capital growth is a key challenge in a market whose VC industry is comparatively immature. For a long-time-horizon deeptech sector like quantum technology, funding for ongoing research and technology development will be critical over the coming years, ”Mr Biercuk said.
“But it’s important to see this isn’t a handout any more than VC investment is. It is fuel for our growth that delivers massive returns – if we structure investments right. ”
Mr Biercuk said the quantum computing arena gave Australia a chance to exert international leadership in a critical area, with Australian scientists having featured prominently in the most competitive international funding programs since the late 1990s.
“Our biggest threat is and remains brain drain. “Structurally, Australia’s research advantages are offset by its economic disadvantages for growth businesses – a smaller market, tighter restrictions on exports, and a less mature investor sector,” he said.
“This fund will enable the tech sector to capitalize on this once-in-a-generation opportunity to make Australia a global tech powerhouse.”
– Kate Pounder, CEO, Tech Council of Australia.
“The pull of Silicon Valley is ever present for top-tier Australian quantum companies, and many founders have already left to build overseas. Initiatives like this fund, from either side of politics, can be instrumental in offsetting the challenges that so often push us away. ”
Kate Pounder the chief executive of industry group the Tech Council of Australia said Labor’s plan would play a big role in helping create a new generation of globally successful technology-based companies, to rank alongside Atlassian, Canva and Wisetech Global.
“This fund will enable the tech sector to capitalize on this once-in-a-generation opportunity to make Australia a global tech powerhouse – to deliver billions in economic activity, provide secure, flexible, well-paid jobs for Australians and make Australia the best place to start and grow a business, ”Ms Pounder said.
“Our success means that 2.2 per cent of the world’s tech unicorns ($ 1 billion-valued companies) have come from Australia, even though our share of global GDP is just 1.6 per cent. It shows Australia has gained an important, new industrial strength in our economy: software development.
Now we need to do the same for the next generation of strategic tech industries. That is why we are especially pleased to note the opposition’s investment will target key areas including quantum computing, artificial intelligence, robotics and software development. ”
Mr Husic said it was important to make the announcement of the critical tech fund during the campaign to highlight how badly the Coalition had failed to recognize the significant investments made by other countries in economy-boosting technology.
“Labor is determined to see that future economic growth is not held back because we have not got our act together on the critical technologies that will be used to drive that growth in the years ahead,” Mr Husic said.
“We can not afford the slow pace: [of the current government]and we certainly can not afford to lose our brightest minds by virtue of failing to provide a supportive environment. ”