INCUBATORS DOING THEIR BIT

2 June 2004
71/04

The Australian Government's Building on IT Strengths (BITS) Incubator and Intelligent Island programs have successfully created jobs, increased national revenue and boosted Australian exports, according to an independent evaluation released today.

The Allen Consulting Group report was based on extensive consultations with all 11 Australian incubators funded by the Australian Government and their incubatee companies and found that the programs had performed well by international standards.

Early stage information and communications technology (ICT) companies face particular difficulty in getting finance for their activities due to the greater risk in investing in start-up companies.

To address this, the Australian Government established the $86 million Incubator program in 2000 to provide incubation services, such as seed capital and business advice, to start-up ICT companies.

Up until June 2003, more than 3600 applicants were assessed under the incubator program with more than 260 early stage ICT companies taken into incubation. More than $70 million of private investment capital has also been attracted into the program.

A number of companies helped by the incubators have gone on to develop applications and products that have found global markets. Two incubatee companies have listed on the stock exchange and several have secured major national and international contracts.

In response to the Allens report finding that most incubators would not be sustainable without a further period of funding, the Australian Government announced earlier this month that it would extend funding for the Incubators program by $36 million from July 2004. This will take the total investment to 2008 in incubators to $122 million.

A competitive selection process for allocation of further funding will be held, limited to those incubators currently funded under the program.

Only high performing incubators will be funded and it is envisaged that six to eight incubators will receive funding.

Draft guidelines on the selection process have been issued to incubators for comment and final guidelines will be released this week.

Applications for further funding from incubators will be due by the end of June 2004 and successful incubators are expected to be announced in July.

The evaluation report is available from the Publications link on the ICT home page at www.dcita.gov.au


Media Contact: Carina Tan-Van Baren (02) 6277 7480 or 0439 425 373