The wrong clock: how short political cycles are costing Australia's innovators
Why our startups need longer runways
"For people to give up their day job to start a new company, or to innovate, or to grow a new company — you want, in an already high-risk environment, as much certainty as possible."
Dr Tamantha Stutchbury, director of iAccelerate, is direct about the structural challenge facing Australia's innovation sector: it is a combination of funding and time.
"When we have funding programs and political cycles that are shorter than what the innovation cycle is, there can be a misalignment," Stutchbury says. "The investments are going to take maybe a decade to realise the return."
It is a tension well documented beyond Wollongong. Analysis of Australia's administrative architecture reveals something telling: the Administrative Arrangements Order - which allocates government responsibilities - doesn't mention "innovation" anywhere.
Departments are assigned responsibility for research, science, and technology, but no department is given responsibility for innovation itself. Take the fate of the recently cancelled Australian Economic Accelerator (AEA). A 10-year federal commitment that took two years to become operational, the AEA was designed to support university IP commercialisation through progressive funding stages. Its abrupt cancellation left researchers mid-application, with grants already submitted and under assessment when the program was stopped.
"That's sort of pulling the rug out," Stutchbury says, noting that some of those affected innovators are within the Illawarra.
The AEA cancellation, representing about $800 million pulled from the innovation pipeline, coincided with proposed capital gains tax changes that sent further uncertainty through the startup sector. The capital gains tax amendments, an unintended consequence of housing policy currently under industry consultation, carry a threefold impact on startups: affecting investors, founders who eventually exit their companies, and employees who accept share options in lieu of market salaries.
The challenge she is most focused on, however, is not re-examining what was lost, it is designing for what comes next. Her argument is not for programs that are "set and forget," but for a more stable policy landscape.
"It's okay if they evolve and things come on and come off, but we do need a consistent landscape ... without the options constantly being totally rewritten."
This is precisely what analysts argue markets cannot provide alone: innovation ecosystems require long-term investment in people, infrastructure, and ideas whose benefits may not be seen for decades.
Founders, Stutchbury says, are often people weighing whether to leave stable employment to build a company and they need "as much certainty as possible" in an already high-risk environment. With the short runways most startups operate on, a funding hiatus while programs are redesigned and retendered can be terminal.
The response at iAccelerate is, as you'd expect, to innovate around the problem. Teams whose AEA pathways have closed are being worked through alternative routes. "If we thought it was good enough to be going through that process," Stutchbury says, "we don't want it just to be stopped. So, where do we go next?"
She believes it is not only policymakers who need to understand why aligning political and innovation cycles matters: the public does too. Cost-of-living pressures, she acknowledges, make that difficult. But she sees a silver lining.
"I haven't heard quite as much talk in the mainstream media about innovation as I have in the last few weeks ... the more information we can get out about what we do, the more awareness of what we do — that's a good thing."
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