Roger Allan: Light touch to market bright ideas

The Turnbull government needs to work with the private sector to design the right tax incentives, Computer Power founder Roger Allen says.

Roger Allen

The Turnbull government needs to work with the private sector to design the right tax incentives to commercialise innovation, ­investor and Computer Power founder Roger Allen says.

Mr Allen said the federal government backed research and ­development in Australian universities and research institutes but there were problems in commercialising that research.

“There is this gap in the market,” he said. “It is logical for the government to look at helping to stimulate investment or plug the funding gap.”

He said Australia needed to develop capital markets that could commercialise locally ­developed innovation, but any new incentive programs needed to be carefully worked through with the private sector to make sure they were effective.

“Quite often government ­programs have overly elaborate regulations which are aimed at zealously guarding public money but they can be miles too complicated for early stage companies,” he said.

The founders of small companies with innovative ideas did not have the time to spend filling in complicated government forms.

The Turnbull government is preparing a statement to be ­delivered by the end of the year that is expected to contain tax incentives to encourage investment in start-ups and innovation.

Mr Allen said any government assistance programs had to have a “light touch”.

“There is a role for government but it has to be very light touch. Ideally it should stimulate and leverage private sector investment,” he said.

There were “plenty of people” in Australia prepared to work with the government to design the right type of tax incentive programs to stimulate innovation.

“If you have the right people around the table they shouldn’t be too difficult to design some ­effective programs,” he said.

Any effective programs to stimulate investment in innovation should be aimed at working alongside private investors.

Some universities in the UK, including Oxford, were setting up funds to commercialise their own research and development.

The government could also use lower capital gains taxes to encourage investment in start-ups and encourage innovation.

“Governments such as the UK have huge breaks on capital gains tax to support start-ups,” he said.

“Countries like Singapore, Taiwan and South Korea have strong government programs stimulating research and development innovation.”

Mr Allen, who is investing in a digital health company in Britain, said Australia “batted above its weight in terms of medical research and biomedical research”.

“We subsidise the research side very heavily and the global companies, such as the pharmaceutical companies, then come in and cherrypick the companies they want,” he said.

“We need to have a capital market which can go from research and development all the way through to the public ­markets.”

Mr Allen said money was not the only thing holding back the commercialisation of innovation in Australia.

He said it was important to ­develop a local culture where entrepreneurs and investors in ­innovation wanted to stay rather than go overseas.