>> Future Forward
A look at business opportunities and the Government’s vision post the pandemic
If you ever had plans to manufacture something in Australia, you are probably thinking with all the uncertainty of 2020 that it’s not the right time to start something new. That could be the biggest business mistake of your life.
Firstly, businesses born in hard times, forcing creators to be frugal and smart, and take a new approach often make the biggest success stories.
Secondly, the world has fundamentally changed. This pandemic, and the viral variants to follow and even the next pandemic (according to Bill Gates) means that what we are going through is not temporary but is closer to the new normal. Any new business that can recognize that we will not ever get back to “normal”, and can meet the needs and wants of the new economy, has an assured future.
Yet pandemics are not the biggest threat to Australian businesses. It is the trade war with China. As I explained when my Editor let me out of the garage with an Op Ed last month, China is flexing its muscles and is picking on the little guy – Australia.
“The Government needs to do something.” Well, they are. The grants I explain below are targeted to grow manufacturing in Australia and are focussed, appropriate, and so far, on time.
Basically, if you can show you have a viable project that can reduce Australia’s reliance on imports and have at least half the funding, one or the other government program will help you get the project across the starting line.
The Federal Government has opened applications under the $1.3bn Modern Manufacturing Initiative (MMI). This funding program aims to grow local manufacturing and targets larger projects with the goal to getting them up and running quickly.
Australia does not commercialise well – we invent things, but they end up being manufactured overseas. The Modern Manufacturing Initiative aims to change this habit and to keep our IP and jobs here in Australia.
MMI support is confined to six ‘National Manufacturing Priorities’:
- Space – applications closed 22 March 2021
- Medical products – applications closed 29 March 2021
- Resources technology and critical minerals processing – applications closed 1 April 2021
- Food and beverage – applications closed 27 April 2021
- Recycling and clean energy – applications close 5 May 2021
- Defence – applications closed 28 April 2021
The MMI will run over 4 years to 2023-24 and will co-fund projects that help manufacturers to scale up and create jobs. Projects must align specifically with road maps developed for each sector.
Funding of $1m to $20m is available for projects on a 50:50 matched funding basis and must fit into one of two streams:
- Translation Stream: Projects that translate well-developed research into commercial outcomes (new or improved products or manufacturing processes) and help companies scale-up.
- Integration Stream: Projects that integrate local firms into domestic and global value chains.
- Applications will only be open for four weeks. (The Government is in a hurry, yet as usual they have put no deadline on themselves).•
- The funding is for new works and not for costs already incurred.
- Companies that are not classified under a priority area can still apply so long as their project aligns with one of the priority area road maps.
If the project you are planning is a $2 million+ investment, this grant could be an invaluable opportunity for your business.
Too big for you?
The Morrison Government has also announced a new $30m support fund as part of the $1.3bn Modern Manufacturing Initiative, aimed at supporting the manufacturing sector to commercialise projects faster.
Projects for the commercialisation fund must still fall within the Government’s manufacturing priority areas of Medical Products, Food and Beverage, Resource Technology and Critical Minerals, Clean Energy & Recycling, Defence, and Space.
- The new grants will be between $100,000 and $1 million and must be matched by industry (a 50:50 deal)
- Projects must include collaboration with a research partner and a minimum of one industry partner.
- Funding rounds will run over an 18-month period.
- Round one funding opened on 11 March 2021 will provide $20m in grants.
- Round two – dates to be announced – will provide the further $10m in grants.
- Collaboration and networking with other businesses to develop a product and establish market potential.
- Collaborating with research and technology hubs/centres to test ideas and share knowledge.
- Engaging external professionals to provide commercialisation and market advice, such as identifying market opportunities and developing a market strategy.
- Creating distribution strategies, such as market entry pathway and identifying domestic supply chains.
- Developing a product for commercialisation using high-value manufacturing techniques or processes such as rapid prototyping or using a state-of-the-art manufacturing plant.
- Acquiring, constructing, installing, and commissioning new machinery and equipment to facilitate the project (limited to 25% of grant funding)
- Research collaboration as it relates to the validation/viability of later stage commercialisation, and approved production and post-production manufacturing activities related to commercialisation.
The Boosting Female Founders Initiative: Round 2 helps female entrepreneurs overcome the disadvantages faced in getting access to finance and support to grow their start-ups. Targeted support will be on a co-contribution basis. The grants between $25,000 and $480,000 for female founded start-ups to expand into domestic and global markets.
We only have space for a sample here, but most states have well publicised websites to help explain more.
- Small Business COVID-19 Adaption Grant Program
- Advance Qld – Open Grants
- $50 million for essential medical supplies manufacturing
- Export Assistance Grants of up to $10,000 are available for up to 1,000 export ready or export capable NSW businesses, helping them access new markets or re-enter old ones where business has ceased.
- Technology Adoption and Innovation Program: provides support to eligible Victorian small to medium size enterprises (SMEs) to on-board innovative technologies or develop innovative, new, and commercial technology.
- Business Resilience Program: $3 billion to help businesses impacted by ongoing restrictions and prepare for COVID Normal business.
- Small and medium sized business ($822 million). The?third round of the Business Support Fund provides grants of $20,000, $15,000 or $10,000, depending on size, to around 75,000 eligible businesses with a payroll of up to $10 million.
But I’m too small for any of this! In my last column I wrote about a new word, ‘Coopetition – Cooperation with your Competition’. That can work in a number of ways but let’s say that you and your competition rely on imports of one component and supply is now unreliable – say a cable or clutch or gearbox. As the volume is too low it does not make sense to try to manufacture your own. Perhaps that would not be true if you and one or two competitors got together to set up a limited joint venture to manufacture the component in Australia.
The grant application processes are not meant to be expensive, so do not think you need to spend a fortune on lawyers and accountants just to make an application. If you have read this far and want to take the next step, this journalist is making our expertise available to help get the ball rolling.
Gary Fooks is chair of the Blue-Sky Alliance. Gary has been working on small engine emissions standards since 2005 and announced as the Environment Minister’s Clean Air Champion in 2015.