For instance, more than 16 per cent of the Tech23 deep tech businesses in our report were already focusing on scaling. And over 35 per cent had also already raised well over $1 million – some exceeding $20 million – despite the majority being prerevenue.
But we know from experience that companies at this stage will struggle to survive without incentives, funding, collaborations and programs that directly accelerate their growth beyond a “small” or “medium” scale.
Private sector investment
Programs such as the Industry Growth Program, the $15 billion National Reconstruction Fund and the Business Research and Innovation Initiative are a good start, but we can’t stop there.
We must catalyse some $100 billion or more of private sector investment into priority areas such as quantum, medical science, manufacturing, renewables, and low emissions technologies.
It’s common knowledge that most deep tech start-ups are founded out of lab-originated scientific discovery and then spun out of universities or research institutions.
Except … What if that wasn’t actually true?
Of the 128 deep tech start-ups to apply to Tech23 last year, a massive 76 per cent were actually founded independently, with just 11 per cent spun out of universities or research institutes.
This reflects the findings of a Survey of Commercialisation Outcomes from Public Research (SCOPR) report that showed just 49 new start-ups emerged from Australian Public Research Institutes in 2022.
University partnerships
Instead, surprisingly, it is actually “partnerships” where universities play a starring role for our applicants.
Partnerships with universities deliver access to talent, cutting-edge research, technology transfer opportunities, grant funding and resources, and validation and credibility.
Of all 358 cited partnerships cited by respondents, a whopping 41 per cent occurred with universities or research institutions.
This is only slightly lower than the 44 per cent occurring with industry, where a scale-up team can build products together with the end user, validate the science and output, pilot solutions with future customers, test solutions in a live environment, and ultimately find support investment and sales.
Both partnership types deliver critical opportunities for scaling the business, but play different roles, and understanding this matters.
“Partnerships” were cited as one of the start-up’s most important growth tools (62 per cent), only a small percentage behind funding (67 per cent) which is often considered a start-up’s ultimate ongoing need.
Respondents were also engaging in an average of 2.8 active partnerships at any given point, as further evidence deep tech start-ups are routinely built via collaboration.
So the data shows universities and research institutions absolutely do play a critical role when it comes to some of our nation’s most promising companies.
Global competition
But not with the primary goal solely being to spin them out in the first place. Rather, their primary goal is to drive growth at the scale-up phase through critical partnerships.
Recognising this matters because it will take continued intervention and persistent policy settings to create the robust complex economy needed to compete on a global scale.
These policies and programs must allow businesses to form multiple mutually beneficial collaborations with both commercial and research partners where vision and values are aligned to the commercial outcomes being sought.
And they must be designed to address the greatest impediments to scaling our SMEs, if they are to have any hope of succeeding.
Sally-Ann Williams is chief executive of deep tech incubator Cicada Innovations.
