However, far from sinister, the reasons behind the sudden slump in the ICT grant approval rate can be explained by the dramatic increase in applicants across the board, according to Les Baxter, NSW manager for AusIndustry.
-In the early days there were less applicants," Baxter said. -It is a competitive process, so that if there is an increase in such applications the chances of success of each application decreases."
Estimating the success rate in previous years as upward of 50 percent, Baxter said this had fallen to roughly 30 percent during the last 12 months as applications from all sectors increased. Baxter also pointed to an increase in the amount required by each application as a reason the success rate had fallen.
-There has also been a significant increase in the size of each project, and the cost associated with the work being carried out," Baxter said. -We still have somewhere between 160 and 180 million, although this figure can vary a little from year to year."
After increasing funding to the program through the Backing Australia's Ability campaign launched early 2001, the Federal Government restated its commitment in the run up to the election, and despite stern warnings from Tresury about the upcoming budget, Baxter is confident that funding to the program will not be affected.
Last year alone the R&D Start program approved 252 grants and loans to industry totalling $230.9 million. Of this approximately $56 million went into biological sciences, $91 million went to engineering and manufacturing and $68 million went into the ITC sector.
Baxter said there was no indication that ICT was faring any worse than other sectors when it came to the application process, however he described some as a victim of their own success.
-Some of the ideas people come to us with are so readily commercialisable we are unable to fund them," Baxter said. -The grant scheme is focussed on highly risky research and development which would have difficulty attracting investment through alternative means."
When I was at a Western Sydney IT Cluster (www.wsitc.com.au) meeting in 2001, people were asked how many were successful with Ausindustry grants and in a room of may be 40 people about 2 people put up their hands. I think this article is phoney. There are way fewer people getting anywhere with these grants than these stats propose. I'd say more like 5%. Since the dot com bust, ICT companies have been caned by investment companies for no good reason. Bill Nolan of Zone Digital Video Systems in a recent BioHub launch at Westmead pointed out strongly how hard venture capital was to come by in Australia and said how he had worked out a way of moving his company to USA at no cost. Don't kid yourself. We are very stingy when it comes to backing local talent. We've got to change or we will become some backwater that sells everyone else's products and doesn't have any skills ourselves.