Our four hopes for deep tech in 2024
The profound impact of deep tech cannot be understated. The founders of our nation’s deep tech ventures are working to solve society’s most important issues, which will have broad-reaching impacts not just in Australia, but around the world.
These solutions, often years in the making – with many more still just a glimmer in the eyes of our future founders – have the potential to establish Australia as the epicentre of deep tech. But there is work to be done, from increasing the diversity of our founders to providing them with more support. How can we do this? Through policy changes and state and federal initiatives, and a call-to-arms to our private sector to not only invest in deep tech, but to collaborate with our founders and become their first customers, too. Let’s make 2024 the year it happens.
Increase the diversity of founders
There’s a common misconception that deep tech ventures are started by PhD students and academics alone, huddled in the labs of universities. While there are certainly founders of deep tech ventures who got their start in academic research centres, they are not in the majority. In fact, of Cicada’s Tech23 deep tech cohort, 76% of founders initiated their ventures independently of academia, while the 2022 SCOPR report found that just 49 new startups emerged from Australian Public Research Institutes in 2022.
These founders have found their way to deep tech from various industries across Australia, spurred by a desire to solve some of the world’s most pressing problems – contrary to another common assumption that founders are motivated by technical challenges alone. Four out of five of our Tech23 applicants’ ventures were driven by environmental concerns, lived experience, a gap in the market and a desire to help society, their cutting-edge solutions aligned with UN Sustainable Development Goals as broad as zero-hunger to clean energy.
In 2024, we want to further expand the notion of a deep tech founder, reaching into all corners of Australia to find the innovators of the future. We must not only seek out talent but nurture it, providing pathways that go beyond academia to look at the VET sector and skilled migration, as well as ensuring our nation’s most brilliant minds remain on our shores. A diversity of founders is essential to the diversity of ideas that will fuel groundbreaking deep tech discoveries across every sector – and power Australia’s economy for decades to come.
More support for startups to scale up
The “Valley of Death”. Every founder faces it at least once in their transition from startup to scaleup, but deep tech founders encounter this challenge more frequently than most along the journey to market. This comes down to an often years-long incubation period of scientific and engineering research and development, in which breakthroughs must precede proof-of-concept. As a result, deep tech ventures require significantly more investment than startups focused on software products and services, which have the ability to bring an MVP to market as they are building it, proving their concept along the way. Even then, only 5% of startups—SaaS and deep tech alike—make it to the scaleup phase of growth, and only a third of those ventures maintain their growth beyond their eighth year.
We must find ways to better support deep tech startups throughout the transition to scaleups if we want to fulfil our potential as a deep tech nation. That means more investment in deep tech from government and industry alike, ensuring there’s an understanding that these investments might take years to pay off – but when they do, the impact on our country will be monumental.
We need to cast a wider net and ensure this funding isn’t only being channelled into university research centres, ensuring our founders outside of academia have the same access to funding and state and federal research and development programs.
It also means creating policy frameworks and processes that make it easier for deep tech startups to navigate the complexities of creating, registering, and licensing their intellectual property that software startups don’t always have to contend with. It means establishing programs that encourage government and industry to pilot these innovations as these ventures’ first customers. It means greater access to talent from Australia and overseas. And it means radical collaboration and partnerships – with government, industry and academia all getting on board and working as one.
Radical collaboration across every sector
For too long, our deep tech ventures – and the support for them – have lived in silos. Investment, both in terms of capital and a willingness to build partnerships and foster collaborations, has been funnelled into single areas, like agritech or artificial intelligence, without considering how these innovations interact with one another and their applications in multiple sectors. Indeed, findings from our Tech23 applicants showed Australia’s deep tech ventures were developing software, biotech, artificial intelligence, advanced materials, hardware and robotics technologies that would have applications in the healthcare, agriculture, aerospace, defence, and mining sectors, among others.
A holistic approach is vital to creating a thriving deep tech economy in which new ventures flourish. Second only to capital, partnerships were the priority for our Tech23 applicants – despite already being, on average, engaged with two to three partnerships simultaneously, working with government, industry, and universities. But there’s a clear desire for more. We must create greater cohesion between state and federal initiatives, programs, and policies if we are to ensure our scaleups emerge from every “Valley of Death” not only unscathed, but better for it. We must create state and federal-level incentives for industries to partner and experiment with deep tech breakthroughs and their vast array of applications. We can do this by showing them what they have to gain – not only a thriving economy, but a future in which Australia is seen as a pioneer of deep tech.
Cementing Australia as a deep tech nation
Australia is positioned to develop an economy with deep tech at its core. Already, deep tech breakthroughs that have emerged from our shores include WiFi, cochlear implants, and solar panels – game-changing innovations that have forever transformed the world we live in. Yet, we are not living up to our potential. In ranking the most innovative and economically complex nations, Harvard University placed Australia at 93rd, lagging behind not only well-known innovators like Japan, South Korea, the UK, and the US, but also far behind New Zealand, Canada, and South Africa, to name just a few. This simply isn’t good enough – and it must change.
We believe it can, so long as everyone recognises the potential of deep tech. That starts with recognising the economic opportunity: increased productivity, expanded market opportunities for businesses outside of deep tech, and trillions of dollars being added to the Australian economy.
But it goes further than that. Our insights show that our deep tech founders are making real progress towards the UN’s Sustainable Development Goals. The breakthroughs we’ve already seen in deep tech show without a shadow of a doubt that it has the potential to solve global problems, from climate change to world hunger. That alone should serve as a rallying cry for the entire nation to get behind deep tech.
Go further
Our Cicada x Tech23 Insights report digs into the current state of deep tech in Australia – the opportunities, the challenges, and the founders leading the way.
Cicada x Tech23 2024
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