Ten times the investment available through the Albanese government’s landmark $15 billion industry fund will be needed to turbocharge the local manufacturing sector in the wake of game-changing investments by governments overseas.
That was the consensus from industry experts on Tuesday during InnovationAus.com’s Capability Papers Manufacturing and Energy Transition forum, if Australia is to compete with international leaders.
The National Reconstruction Fund (NRF), which remains in a setup phase, will target seven priority areas for investment over the next decade, with carve outs for renewables and low emissions technologies, medical manufacturing and critical tech, among others.
Kara Frederick, managing partner and founder at early-stage venture capital firm Jekara Group, described the NRF as a “good start”, particularly to crowd in investment from the private sector like the US is experiencing with the Inflation Reduction Act.
But she said the fund was “probably 10 per cent of what we need”, with the use of seven priority areas also “overcomplicating [investment] when there are some areas we just need to go bigger [with], earlier”.
“So, when you talk about funding, the leadership has started and that’s wonderful, but we definitely need a bigger vision,” she told the 100-person expert audience at the Museum of Sydney on Tuesday.
Ms Frederick also questioned whether it is “actually a response” to the IRA, with Canada and the United Kingdom now planning counter investments of their own to maintain local investment in clean energy and manufacturing.
Natalie Chapman, the managing director and co-founder of local deep tech commercialisation agency Gemaker, also said that while the NRF is a “good start”, more investment in critical minerals will be needed to really move the needle.
“We need the country to believe in companies. We need to country to invest in the minerals and to be able to invest in the taking it from ore through to oxides through to metal, to magnets, to produce all of your other downstream technologies in the country,” she said.
“And that’s why the NRF is a good start down that pathway, but $1 billion for critical minerals when [a rare earths project in Dubbo] is going to cost $2 billion, tells you the level of investment that you’re going to really require to make a substantial difference.”
Ms Frederick, who helped steer local success story Tritium towards international markets, said that while the interplay between universities, entrepreneurs and finance were constants, government would be an “important enabler” in the energy transition.
“You do need government leadership in this space because how great the transition is, and you do need consistent capital from idea through to the public markets, and there are spots here, but its not enough yet.”
But she said that when comparing the US and the Australian approaches, the Biden administration had been more successful in “catalysing capital” in recent months through mechanisms like the IRA.
“A trillion US dollars, versus $15 billion Aussie dollars coming at some point, so there’s a stark difference right now, and at this moment in time what that has helped with is give people the confidence,” she said.
“That money is actually flowing through now, so the talk is now matched with dollars that are flowing into companies. You look at the US economy today, six months ago everyone was better against it and today is quite the opposite.”
Chief technology and operations officer of laser diode microcap BluGlass, Dr Ian Mann, said that with all the investment poring into the US and Europe, Australia needs to “find our way to be competitive”.
“Part of the problem is if everyone’s throwing the same money into the same types of fields, it’s going to be very difficult to complete with the US and Europe, who are throwing really big dollars into some of these areas,” he said.
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