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Address to the Information City Australia launch and graduation ceremony, Debono Centre, Melbourne.



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MINISTER FOR COMMUNICATIONS, INFORMATION TECHNOLOGY AND THE ARTS

THE HON DARYL WILLIAMS AM QC MP Information City Australia launch and graduation ceremony

DATE

4 th Floor DeBono Centre, Melbourne

Thursday 22 April 2004 from 5.30pm

Introduction

Four years and dozens of "graduates after the launch of the Building on IT Strengths Incubator program, ICT incubation in Australia is entering a new era. Companies emerging from BITS incubation are making their mark not only at industry award nights, but in the truest and fiercest test of innovation and entrepreneurial flair, the global marketplace. In recent months, BITS graduates have also begun to list on the stock exchange, a sure mark of maturity. The first of these, late last year, was Biometrics, which produces image-detection security technology. The second, just a few weeks ago, was CogState, which produces technology that can detect neurological changes and which boasts some of the largest pharmaceutical companies in the world as its clients.

A new phase for ICT incubation

Today, we see the scheme's first merger of incubators. The result is the creation of a new incubator with a truly national focus and with better access to investment funding.

The Allen Consulting Group evaluation

As you know, t he Allen Consulting Group looked at the performance of all 11 Government-funded incubators between June and October 2003. It talked to and surveyed incubator managers and staff, past and present incubatees, venture capitalists and financiers and State governments. As we have said before, The Allen Consulting Group found that the BITS program objectives had been substantially met. It found that the BITS incubators had performed well by international standards, especially given the difficult ICT business climate. And it found that the scheme had created jobs, increased ICT revenue, boosted exports and fostered the commercialisation of good ideas. However, the review did find that the incubators had not yet achieved financial sustainability.

The ICV-A&B merger

This last finding makes the sort of evolution we see at work here today all the more important. This merger makes the most of the strengths of both Information City Victoria (ICV) and Allen and Buckeridge Seed Stage Ventures (A&B). A&B brings to the merger its established links to venture capital and industry, including its $21 million pre-seed fund and its international connections to Silicon Valley. ICV brings to the mix its professional networks and a track record in helping organisations commercialise their intellectual property through its flagship Mentre Program. This mentoring program has helped emerging entrepreneurs link up with world-class researchers at RMIT, the Peter MacCallum Cancer Centre and Curtin University. It is an approach that has given rise to success stories like Invarion. Invarion started life as two university dorm mates tossing around the germ of a good idea. It has grown into a company whose PlanMan software for managing traffic flows at roadworks has become an industry standard, a company with a growing export market and offices on two continents. But the kind of attention and nurturing that has helped Invarion to make that crucial leap into commercial viability demands a considerable investment, not only of expertise, but resources. The merger of ICV and A&B will create a combined lode of expertise and resources that will offer hope to a new generation of ICT start-ups. The merged enterprise also has a strong physical presence, with offices in Melbourne, Sydney, Brisbane and Silicon Valley. It has valuable links with the public and private R&D sectors in a number of States, including strategic relationships with Commercial Capital, in Darwin, and the Australian Telecommunications Cooperative Research Centre in Perth. And, thanks to Allen and Buckeridge's $21 million pre-seed fund, it has better than ever access not only to potential markets, but to the capital and the investors without whom a good idea can easily languish.

The future of ICT incubation

It is pretty clear from the Allen Consulting Group's report that the success of BITS incubators into the future will depend on their capacity to respond creatively to the challenges of the dynamic and swiftly evolving ICT marketplace. Today, we see just such an example of creative responsiveness, with the merger of ICV and A&B. But we have also seen quite dramatically what the BITS program has achieved to date, with the graduation this afternoon of another generation of ICV incubatees.

The importance of ICT

Australia 's future prosperity depends on our capacity to produce the ICT innovations that will improve our lives and allow us to compete in an increasingly global marketplace. ICT innovations have implications for things as fundamental as our security as a nation and our capacity to deliver world-class health care and education. ICT reaches into every area of our lives and every sector of our economy. Every industry sector, from mining to wine-making, is using ICT to change the way it does business. And all kinds of Australian workers, from the proprietor of the local milk-bar to the neighbourhood chartered accountant, are using ICT to better serve their customers and clients. ICT is helping to ensure a future for our regional and rural communities too, enabling them to participate fully in the information economy and giving them new hope as they face the challenges of urban drift and industry restructuring. It would be a short-sighted nation which did not see the economic and social benefits of fostering the ICT entrepreneurs of the future. The Australian Government saw the benefits four years ago when it made $86 million in BITS funding available to incubators in every Australian State and Territory. And it sees the benefits today, as ICV and A&B combine their strengths and embark on a new phase in development in our ICT sector.

Conclusion

I wish Information City Australia all the best for the future and trust that many more Australian ICT companies will emerge from incubation under the Information City banner. I hereby officially launch Information City Australia.