Industry Growth Program: discussion paper

Setting an annual turnover cap of $20 million or less seems suitable, as it ensures that the IGP targets SMEs in the growth phase and needs the most support, rather than larger, established corporations.
In addition, eligibility criteria should also consider the business's alignment with key strategic growth areas identified by the Government, such as advanced manufacturing, clean energy, digital technology, and health and biosecurity, to name a few.

The commonly used 50% grant matching model could be suitable, as it incentivises businesses to invest in their projects, ensuring they have a vested interest in their success. This approach helps mitigate risks associated with public funding while encouraging responsibility and commitment from SMEs.
However, the grant size should be flexible and correspond to the unique financial needs of the proposed project. Factors such as the nature of the industry, technology, and targeted market should guide this determination. In our experience, transforming a Minimum Viable Product (MVP) into a fully deployable solution often requires significant investment. Therefore, a sizable grant could significantly contribute to pushing this transformation forward. By gauging the funding needs and determining the grant request amount, a business showcases its understanding of the financial realities of its project—a reflection of its overall competence.
Considering the Technology Readiness Levels (TRLs) is also vital. Early-stage TRL projects often pose higher risks due to the developmental nature of the technology involved. Nonetheless, they are crucial for advancing innovation and technology. A higher level of grant matching could be adopted for these early-stage TRLs to encourage businesses to undertake such ventures. This way, SMEs would be incentivised to tackle large-scale issues and push the boundaries of current technology, leading to significant innovation and economic growth opportunities.

Indeed, innovative SMEs like Balance Mat face many obstacles beyond the pre-profit stage that the Industry Growth Program (IGP) should consider. While the pre-profit stage is characterised by innovation and development, the subsequent steps, particularly commercialisation, often present distinct challenges vital to a product to become commercially successful.
In healthcare and technology, where Balance Mat operates, transitioning from a developed product to a commercially viable offering can climb steeply, especially when targeting export markets or markets dominated by large, often foreign-owned corporations. Having resources to support rigorous market research, product localisation, and tailored marketing strategies could facilitate this transition. Thus, measures akin to the Export Market Development Grants (EMDG) that provide significant upfront funding could be highly beneficial in these stages.
Moreover, fostering industrial partnerships through tax-effective schemes can be an effective strategy to augment the commercialisation capabilities of SMEs like Balance Mat. Partnerships with companies in allied markets can help leverage existing market knowledge, distribution channels, and customer networks, thereby reducing market entry barriers, accelerating growth, and enhancing competitiveness.
In response to the Inflation Reduction Act, tax incentives to support the development of advanced manufacturing processes and innovative product designs could be instrumental. Such a scheme would stimulate investment, drive competitiveness, create jobs, and contribute to economic growth – aligning well with initiatives such as the IGP.

Technology Readiness Levels (TRLs) alone to determine project eligibility could be limiting. Balance Mat, being an innovative SME in the health tech sector, understands that while TRLs are crucial in indicating a technology's maturity, they only partially capture the nuances of an innovation's commercial potential. For example, our product could have a high TRL, indicating technical feasibility, but may face challenges in achieving market reach due to factors like market acceptance, regulatory hurdles, or competition.
Moreover, the health tech industry is highly dynamic, with emerging technologies constantly pushing the boundaries of innovation. Therefore, setting rigid TRL-based eligibility criteria may inadvertently exclude potentially disruptive yet technically immature innovations.
Considering the above, broader indices like the Commercial Readiness Index (CRI) or Business Readiness Level could be more beneficial. These indices provide a more holistic view of a project's potential by evaluating technical feasibility and market readiness, financial planning, and risk management strategies. This is particularly relevant for companies like Balance Mat that operate in an industry where commercialisation involves complex processes, regulatory compliances, and market acceptance challenges.

Firstly, projects should address pressing healthcare challenges to have significant growth and market impact. For instance, conditions like Chronic Traumatic Encephalopathy (CTE) and concussions, which are increasing concerns in Australia due to their long-term effects on health, represent vast market potential. Any project innovating in this space by providing effective prevention, diagnosis, or treatment solutions can substantially impact.
Secondly, the project should have the potential to reduce healthcare expenditure. In Australia, healthcare costs account for 1.5% of the overall spending. Any innovation that can effectively reduce these costs, such as preventative measures, early detection tools, or more cost-effective treatments, can have significant potential.
Lastly, the social impact of the projects should be evaluated. Projects that address social challenges, improve the quality of life, or contribute to sustainability have far-reaching social implications, fulfilling the Government's responsibility towards social welfare. For instance, Balance Mat aims to reduce the risk of falls among older adults, a significant social challenge, thus improving their quality of life and contributing to sustainability.

The 'need for funding' is an applicable criterion for assessing grant applications. While we have made strides in developing and marketing our product, additional funding is needed to ramp up manufacturing, improve product features, expand market penetration, and invest in commercialisation goals.
Moreover, assessing the business or product's market potential and growth prospects could provide insights into the likelihood of future financial success. Balance Mat, for example, operates in a growing health and wellness market. While our initial sales and customer feedback are promising, additional funding is required to reach our full market potential, suggesting a valid need for funding.
Risk assessment should also be a significant part of this measurement. There's a higher risk for innovative projects like Balance Mat, which push the boundaries of current technology and seek to disrupt existing markets. This risk might deter some traditional investors, making grants a critical funding source.

Yes

One critical area is Engineering Consultancy. The technological and innovative nature of many projects in this space makes this form of consultancy vital. Industry partners providing engineering services can offer essential insights into product design, development, testing, validation, and optimisation. They act as a lighthouse guiding participants through the technical challenges that emerge during product development. They can help businesses navigate various issues linked to regulatory compliance, safety standards, and scalability.
Another pivotal area is Scaleup Manufacturing. This phase often poses significant challenges to startups, primarily due to a lack of experience and resources to transition from prototype or small-batch production to large-scale manufacturing. Industry partners with expertise in scaling up manufacturing processes can offer critical support here. They can facilitate access to manufacturing facilities, share expertise on aspects like process optimisation, quality control, and supply chain management, and assist businesses in scaling up cost-effectively and promptly.
Commercialisation Research is the third crucial area. The journey of bringing a product or service to the market is labyrinthine, and solid market research can illuminate the path. Industry partners can bring their expertise to the fore in understanding market trends, consumer behaviour, competitive analysis, and designing effective marketing strategies. They can help identify the most promising markets, optimise pricing strategies, and craft marketing campaigns that resonate with the target audience.
The final key area is Clinical Trial Support. Clinical trial support is a sine qua non for products like Balance Mat, which have implications for health and wellness. Industry partners can provide vital resources and expertise to design and execute rigorous clinical trials, navigate the regulatory maze, analyse trial data, and effectively communicate the results. This support can expedite product validation, boost the product's credibility, and enhance the chances of its commercial success.

The Industry Growth Program (IGP), with Balance Mat as one of the participants, holds significant potential to dovetail with and bolster existing university, industry, and government initiatives. This synergistic approach can foster a productive ecosystem conducive to innovation, economic prosperity, and job creation.
A key opportunity for the IGP is to align with university and industry efforts by advocating for a Cooperative Research Centre (CRC) dedicated to scaleup manufacturing. CRCs are highly regarded for their capacity to unify industry, researchers, and government entities, encouraging collaboration to address specific research and development needs. By focusing on scaleup manufacturing, such a CRC could cooperate with the IGP to pinpoint and address priorities vital for industry growth. This would accentuate the interconnectedness of the various sectors involved and underline the importance of a collaborative approach to resolving challenges.
Moreover, the IGP can align with government initiatives, particularly in tax reform. For instance, advocating for a simplification of the tax system could make wages in startups more accessible, specifically in regard to equity components such as options and shares. By proposing a cap on remuneration, such as the $20 million suggested in the consultation paper, the IGP could contribute to a fairer distribution of wealth and a more equitable economic system.

The Industry Growth Program (IGP) presents a unique opportunity to foster stronger connections between industry, universities, and entrepreneurial students, which is central to the aspirations of Balance Mat. By cultivating this innovation and entrepreneurial growth ecosystem in Australia, we can cater to the immediate and long-term needs of the labour market and union movements.
The IGP could bolster these connections by directly linking universities' research efforts to the IGP's merit criteria. Such an approach would incentivise universities to direct their research towards areas of national interest and catalyse collaboration with industry partners. This strategy would benefit entrepreneurial students by enabling them to leverage these university-industry partnerships to innovate and contribute meaningfully to Australia's growth sectors.
In addition, the IGP could aid in nurturing these connections by drawing on the successful models of universities that have already fostered impactful industry relationships. An example worth noting is the University of Technology Sydney (UTS) Startups program. This initiative offers free access to facilities and workspace to startups and simultaneously encourages interaction with students. Such models promote a mutually beneficial relationship between industry and academia, facilitating the practical application of academic knowledge while equipping students with real-world entrepreneurial experience.
As an aspiring participant in the IGP, Balance Mat values such a synergistic environment. It allows the application of academic knowledge in practical situations, providing students with hands-on experience and ultimately creating a potent network among industry, universities, and entrepreneurial students. By fostering this innovative ecosystem, the IGP can significantly support the future growth of projects like Balance Mat, simultaneously enhancing the national economic landscape.