Manufacturing taskforce members push for small business innovation scheme

Members of the Government’s manufacturing taskforce are promoting a scheme that would see the Government partially funding small businesses to solve major business problems, with a guarantee of buying the innovation should it prove successful.

Roy Green, dean of the UTS Business School and a member of the taskforce, says the scheme has been enormously successful overseas in developing high-tech manufacturing.

The Small Business Innovation Research scheme was first established in 1982 in the United States, and was adopted in Britain under the previous Labour Government.

Limited to American businesses with fewer than 500 employees, it gives manufacturers the chance to accept contracts from 11 US Federal Government departments, and can provide around $US 1 million to develop an innovation.

“The US is different from here, obviously being much larger… but the principle is the same,” Green says.

“They are encouraging the development of home-grown ideas and technologies that might not have otherwise emerged, in response to real problems.”

“In some cases these ideas are sufficiently significant to be the source of major industries or exports to other countries, and promotion on a global scale.”

In the United States, defence technologies have particularly benefited from the scheme, and many of the innovations have since been extended to other sectors of the economy.

“As we know from history, a lot of the Silicon Valley ventures started as a result of defence expenditure,” Green says.

“There have been a number of public sector initiatives that have really enabled one to question the degree to which Silicon Valley was a spontaneous result of market forces.”

“In fact, there was a good degree of government support for a lot of the technological development there.”

Green says despite only operating for a short time in Britain, the scheme there has also had success.

According to a report in this morning’s Australian Financial Review, Industry Minister Kim Carr rejected the need for the scheme yesterday, saying elements of the scheme had already been implemented in a separate program, called Enterprise Connect.

Enterprise Connect has helped more than 5,000 small- and medium-sized companies through no-charge consulting services, but has not focused on driving high-end innovation.

Green however says both schemes have a role.

“The two are very complementary,” he told SmartCompany.

The taskforce, which is chaired by Prime Minister Julia Gillard, began meeting in November. It is expected to conclude in mid-2012.

“The taskforce has a good way to run, and there are a number of ideas that will be canvassed,” Green says.

“As far as [this scheme] is concerned we hope we can give it a proper investigation.”