The government's Commercial Ready subsidy scheme should never have been dumped, according to Kaz founder Peter Kazacos, but instead revamped so companies can only claim cash for activities like marketing.
Under Commercial Ready, businesses were able to claim 50 per cent of project innovation costs for activities such as research and applying for patents, up to AU$5 million.
The program was ditched in this month's Federal budget after a report by the Productivity Commission found that the program supported too many innovations that would have taken place without public support.
Kazacos said that if the grant money had not existed, the research financed by Commercial Ready would have gone ahead anyway — but the necessary marketing to turn it into a viable product would not.
"[The money] wouldn't have been spent in the sales and marketing area," he told ZDNet.com.au. "What [the government] should have done is strictly enforced them to be commercial grants."
Australian innovators are hopeless at marketing products, he said, echoing sentiments voiced by research heavyweights from DSTO and NICTA speaking at CeBIT earlier this month.
"It's not their forté," he continued, adding that the CEOs of most innovative Australian companies comes from the development side rather than a sales and marketing background. "To attract strong leadership a lot of these companies have to give away equity — they're not willing to do that," he said.
The savings from ditching the Commercial Ready program are expected to come to AU$707 million over four years.
The company I'm with is here today because of a Commercial Ready grant. If we did not get the grant, we would have attempted to do the project, but it would have failed, because a Scottish company doing a similar thing would have beaten us in the marketplace. Because the grant allowed us to afford extra development people, we were able to get to market first and act quickly once there.
That's the key here - it's not WHETHER the project would go ahead, but HOW FAST. Speed is so important in the international playing field.
The loss of this grant is a tragedy.