Agencies to become tech guinea pigs in NSW

Freshly anointed NSW Finance Minister Dominic Perrottet has told the state’s IT industry he does not believe tech innovation can ever be properly nurtured by industry initiatives or “government handouts”.

Opening the NSW iAwards last night, Perrottet said “some people say it is up to the government to fund and sponsor innovation but it really isn’t".

“Yes government does have a role to play in creating the right environment for it to flourish. But ultimately innovation comes from individuals.”

His comments come off the back of dramatic cuts to innovation and start-up grants programs made recently by Perrottet’s Liberal colleagues in Canberra, who have withdrawn $845.6 million out of schemes including the Innovation Investment fund and Commercialisation Australia.

In an effort to create the conditions for innovation without the need to fund grants, the Minister last night announced reforms to the state’s IT procurement policy that will encourage state agencies to test industry solutions that are still in the proof of concept stage.

The government will offer short-term contracts capped at 75 days and $250,000 to small companies to demonstrate the potential of their ideas.

“It has always been a challenge for smaller firms to demonstrate value for money when they are just starting out, and here in NSW we would like to address that,” said Perrottet.

“This is good news for small businesses with big ideas.”

A spokesman for his department, the Office of Finance and Services, said risk parameters were being changed to "realise the wider potential of new innovative goods or services, rather than simply favouring previously tried and tested solutions".

NSW is not the first state to attempt to nurture small business innovation though its own buying practices.

The Queensland Government recently announced it would now be mandatory for agencies to include at least one small to medium enterprise (SME) in the bidding shortlist for IT tenders, and loosened procurement rules to allow government bodies to engage SMEs for contracts up to $500,000, avoiding the sometimes prohibitive expense of a full approach to market.