Canberra as an Innovation Powerhouse
Nick McNaughton shares insights on Canberra’s innovation scene past, present and future
As we enter the New Year, it is a good time to reflect on the past and the future. The ACT has historically been known as a ‘government’ city, with our workforce and local economy much dictated by the highs and lows in public sector employment. Today, the territory has a significant majority of employees working in the private sector (>65% currently). Much of this transition can be linked to the rise of technology jobs in the Territory.
ACT 1.0 (1975-2000) - The dawn of technology and innovation in the Territory.
This phase was epitomised by several iconic founders of early Canberra technology success stories. These include (but are not limited to):
XTEK – (ASX: XTK) - founded in 1978, XTEX is the market leader in producing high-quality security products to protect and sustain defence forces, police forces, and other government agencies.
CEA Technologies – CEA is a private, vertically integrated Australian company designing, developing, manufacturing, and sustaining technically superior phased array radar products. The company was founded by two ex-Royal Australian Navy Officers, David Gaul and Ian Croser. CEA Technologies opened for business on 8 August 1983 and now employs over 400 people worldwide.
Tower Software – was a software development company founded in 1985 by Brand Hoff. The company provided and supported enterprise content management software, notably its TRIM product line for electronic records management. Hewlett-Packard acquired the company in 2008.
EOS (ASX: EOS) – Electro Optic Systems Holdings Limited was founded in 1983 by Ben Greene. It is a leading defence, space and communications company and a world leader in space information and intelligence services, optical, microwave and on-the-move satellite products, optical sensor units and remote weapon systems for the land, sea and air.
Intelledox – a software development company that specialized in business process digitalization. It was founded by Michelle Melbourne and Phil Williamson in 1992. The Intelledox platform was developed to address the market requirement of simplifying complex paper-based and forms-centric processes, such as onboarding, new account applications, claims and other servicing forms. Intelledox allows non-technical users to implement common Microsoft Word skills to create reusable form fields and document components in a central repository without the requirement of macros or coding. Intelledox was acquired by Smart Communications in July 2019 and rebranded as SmartIQ in June 2020.
ITL – an innovative medical technology company (39 product patents and 37 trademarks, 2019), supplier and strategic partner that provides products and solutions to healthcare markets and empowers individual health management. ITL sets standards for essential products through innovation and leveraging market intelligence to optimise end-user safety and efficiency and effectively meet stringent clinical demands and regulatory requirements worldwide. Its footprint serves blood banks, hospitals and health systems, laboratories, and veterinary medicine and animal production facilities in more than 55 countries throughout North America, South America, Europe, Asia, the Middle East, Australia, and Malaysia. Founded by Bill Mobbs, it has been an iconic Canberra MedTech company for nearly four decades.
What categorises these companies is the vision and ambition of the founders. All were early adopters of technology; all had worked within the industries they were to automate. They knew the industry problems and set out to fix them! At the time there were no government incentives, no co-working spaces, no accelerator programs and no incubators. Venture capital was nascent and largely a private equity add-on. These founders were pioneers for those that followed them. They paved the way for the next generation of founders.
ACT 2.0 (2000-2010)
The second era of technology in the territory saw modest federal and territory funding going into the industry to stimulate the evolution of start-ups and commercialisation in the region. It also saw program and funding infrastructure put in place to provide support and scaffolding for institutions, founders, and investors. The primary entity tasked to manage this was Epicorp, with Capital Angels, ANU Ventures and the Canberra Business Development Fund also supporting innovation.
Epicorp
Founded in 2001, Epicorp established a strong technology commercialisation process for the Australian Capital Region. Under common ownership of the region’s research institutions, with government and the private sector support, Epicorp fostered the commercialisation of intellectual property from within the Australian National University, CSIRO, University of Canberra, NICTA, and the Australian Capital Region’s industries.
Epicorp was supported by an $8 million ‘Building on IT Strengths’ (BITS) incubator program grant from the Federal Government (Department of Communications, Information, Technology and The Arts - DOCITA), a supporting grant from the ACT Government, and the provision of buildings from CSIRO.
Epicorp was tasked with creating a strong high-technology commercialisation system for the Australian Capital Region under common ownership and management involving the Region’s research institutions and supported by Government and the private sector. Epicorp:
drew together the relevant resources and players in the Canberra region;
fostered and supported the commercialisation of technology and knowledge from the ANU, CSIRO, UC and industry within the broader Australian Capital Region community; and
complemented other commercialisation initiatives.
Epicorp delivered assistance to new-start and spin-off ventures in several ways. Firstly, it assisted businesses in commercialising IP through the implementation of a tailored incubator program. Secondly, it provided seed funding to suitable Epicorp incubator businesses.
Epicorp also had several pioneers as leaders and executives. These included (but were not limited to): Ros Hughes (CEO), Dennis Page (Chairman), Brand Hoff (Director), David Gaul (Director), Cindy Mitchell (Business Manager), Ross Gallagher (Investment & Operations Manager).
Epicorp seeded several local tech companies. These included (but are not limited to):
Windlab – a global renewable energy development company owned by Squadron Energy and Federation Asset Management, Windlab was established to commercialise world-leading atmospheric modelling and wind energy assessment technology, developed by Australia’s premier scientific research institute, CSIRO. Windlab played a foundation role in creating Australia’s wind industry. This technological advantage has enabled Windlab to amass a portfolio of high-quality wind farm development sites totalling 7,406 MW of potential capacity across North America, Australia, New Zealand and Southern Africa. Windlab has completed the development of 1,093 MW of capacity across three continents. These projects are either currently under construction or are amongst the best operating projects in their respective markets.
Simmersion – commenced operations in 2002, developing real-time simulation software called Simurban® for the unexplored urban planning market. The company was acquired by XTEK (ASX: XTK) in 2015.
Locata – incorporated in 1997 by David Small and Nunzio Gambale, Locata has radio-location technology that gives precise positioning in many environments where GPS is either marginal or unavailable for modern applications.
Cohda Wireless – founded by Dr Alex Grant in 2004, Cohda Wireless is a leading supplier of innovative Connected Vehicle solutions that enables vehicles to connect with other vehicles and with Smart City & Mining infrastructure.
Mediaware – founded in 1997 by three CSIRO scientists, Mediaware established a strong presence in the United States and Australian defence markets as a contributor to the evolution of standards-compliant imagery and metadata processing. The Canberra-based company was acquired by General Dynamics Corporation in 2007.
Today, Epicorp works closely with the Canberra Innovation Network (CBRIN) and the region’s innovation and business support network to provide companies with short-term growth capital through lending facilities and venture debt.
Other iconic companies
Seeing Machines – launched in 2000 as a spin-out from the ANU in conjunction with Volvo Technological Development, its big idea was for driver monitoring to enable the development of the crash-proof vehicle. This vision has stood the test of time and applies today - more than ever before - with DMS technology fast becoming a safety requirement in all future vehicles. Pioneers included Alex Zelensky and Ken Kroeger, who took it to an AIM listing in 2005.
Uber Global – originally called MCGOOHQ and renamed Aussie HQ in 2005 then UberGlobal since 2010, the company was a software, web and cloud services provider that had a 10th of Australia’s 1.1 million active businesses on its books. Founded by Michael McGoogan when he was 15, Uber Global became Australia's second-largest web hosting company. UberGlobal was acquired by MelbourneIT in April 2015.
AllHomes – founded by Tim White and Peter Blackshaw in 2007, AllHomes became one of Australia’s market-leading gateways to information about real estate, and one of Australia’s most visited sales and rental property websites. The company grew revenue at an annual rate of 35%. Over seven years, it expanded its site reach from 5,000 to over 430,000 listings. During this time, it increased page views from 10,000 per day to over 2 million per day. Fairfax Media acquired the company in 2014.
Other organisations supporting innovation
Capital Angels – a corporation that provides a forum for qualified high-net-worth individuals to proactively support Capital Region entrepreneurs through investment and direct activities supporting the companies. Founded in 2005, Capital Angels was the first formal angel investment group in Australia. It is a great credit to the founders and early members of Capital Angels who saw this need. The pioneers were Uwe Boettcher, Michele Troni, Steve Hardy, Dominic Kelly (and others who contributed and supported).
ANU Connect Ventures – founded in 2005 as a partnership between the ANU and MTAA Super (now Spirit Super) to invest in smart ideas, discoveries and inventions from the ANU and Canberra region, the fund grew to $47 million of capital under management. Of note, it backed InterfereX (sold to Dolby in 2018), Instaclustr (sold to NetApp in 2022), Digital Core (sold to FEI in 2014) and Liquid Instruments.
Canberra Business Development Fund (CBDF) – a joint venture between the ACT Government and Australian Capital Ventures Limited (the Hindmarsh Group), CBDF acted as the fund manager for a fund designed to provide eligible businesses located in the Canberra region with a source of capital funds through equity investment. The contribution of the Hindmarsh Family and their team (Michele Troni & Steve Hardy) cannot be understated. ACVL was often a catalyst for new external capital being invested in the territory alongside them.
In summary, ACT 2.0 evolved from v1.0 by having:
Federal Government support for incubation and acceleration;
ACT Government funding support (o Epicorp, CBDF and to ANU Connect Ventures);
a sophisticated network of high-net-worth individuals who convened Capital Angels as the first investment destination for any local founder; and
a couple of locally focused Venture Capital Funds (ACVL / ANUCV). It is also noteworthy that the pioneers of v1 became mentors, investors, directors, and guides in v2 companies. This mentoring is crucial to avoiding the errors of the past in the entities of the day.
ACT 3.0 (2010-2022)
After Epicorp funding ended in 2009, Canberra went through a period of reflection about what the go-forward model should be. This changed in 2013 with the production of the ACT White Paper written by me, Professor Mick Cardew-Hall and Karen Jackson, outlining a plan. This included several recommendations, including the need for acceleration, incubation, co-working, and a centralised innovation hub. It also recommended the need for innovative programs and funding to be accessible to founders at all stages of their entrepreneurial journey.
One of the great benefits of the ACT is the collegial approach of our territory government. It consults and listens well. It has good people working in economic development, who support the community with the resources it has available. This partnership has serviced us well and will serve us well going forward. It is also important to recognise we have consistently had Chief Ministers who have seen the benefit of a tech sector in our economy. This support has covered four Chief Ministers over my time in Canberra, namely Kate Carnell, Jon Stanhope, Katy Gallagher and most recently, Andrew Barr. Without their public support, the innovation ecosystem would not be where it is today.
Fast forward, and we can see all these elements within the structure of CBRIN. CBRIN offers co-working, the GRIFFIN accelerator (now in its 9th year), and the KILN incubator. CBRIN has been a huge success, and many thousands of individuals interact with the organisation each year. CBRIN has scores of success stories – too many to list here – that are chronicled daily on the CBRIN site and at The Moore Street Journal. Some would argue that CBRIN has done enough and that CBRIN and other organisations have laid the foundations and can let the current system support the entrepreneurs of the future. Nothing could be further from reality.
ACT 4.0 – The Future
The purpose of this op-ed piece is to recognise our past, acknowledge our pioneers and celebrate our successes. We should be proud.
Regrettably, nothing stands still today, and other States and Territories - and countries - have recognised that technology, innovation and entrepreneurship are the pathway to future jobs, growth, and economic prosperity. We have a global fight for talent, and we are seeing massive incentives being offered by other jurisdictions. Look at Victoria with its $2 billion Breakthrough Victoria fund (yes, that is not a typo – it is $2 billion!). New South Wales, Western Australia and Queensland all have new state-based funds under development or announced. We all look forward to the stimulus the ACT Government can provide when the new ACT Government local fund is announced. Capital is a magnet for entrepreneurs. If the capital is elsewhere, we risk our founders leaving the Territory at exactly the time when we need them here.
We need to expand support for CBRIN. The team has done wonders, but we need more support, space, and initiatives. We need sector-specific programs and places for SpaceTech, Cyber Security, Health and Life Sciences, AI & ML, AgTech. We need the ACT Treasury to see the clear return on investment benefits of a local high-tech economy and place bigger investments in us.
We need to support our research-intensive institutions to commercialise more of their IP. We have five universities and CSIRO in our city. We should see a flood of ideas, discoveries and inventions coming from these entities. The ANU Physics Department is an excellent example of what can be achieved. Under the leadership of Professor Tim Senden, we have seen a constant flow of world-class spinouts. These include (but are not limited to) Digital Core, Liquid Instruments, Quantum Brilliance, Nomad Atomics & VAI Photonics.
We need to attract more migrants (domestic and international) to fill the jobs of the future.
Looking back, we have come a long way. We SHOULD be proud. But we cannot rest on our laurels. The next decade is a critical decade for investment. We have learnt through the recent disasters (fires, smoke, floods, pandemic) that we need to invest in the commercialisation of science to protect us as a species. We have learnt from the pandemic that supply chain control is critical. Just-in-time manufacturing and supply do not work in a disrupted world; we need more and better domestic manufacturing. Australia was horribly exposed during the pandemic. This needs to be fixed.
Finally, we have more sovereign risk than ever since World War II. We need smart technologies to give us an advantage in a conflict. Canberra has great defence tech credentials (see success stories above). We need more.
In summary, I look forward to the day (no later than 2040) when citizens of the world look at Canberra and the Territory first and foremost as a Tech City. I know many of you want this too.
