July 15, 2020 2 min read
Research funding for resource-starved universities could be boosted by up to $50m a year if the federal government changes business migration rules in the October budget to require more investment in research commercialisation, according to a university-linked funds management firm.
With universities facing a collapse in international student numbers and the loss of billions of dollars in tuition fees, research programs face major cuts unless more money is found.
Atlas Advisory Australia executive chairman Guy Hedley said that millions of dollars from wealthy business migrant applicants “could be made immediately available to provide an urgent lifeline to Australia’s world-leading university research projects and start-ups that will drive the future of our economy”.
“Many of these projects face unnecessary collapse because of a shortage of funding,” he said.“Making up for the loss of international students by funding the commercialisation of university research with a greater proportion of investment from high-net-worth migrants is pure logic.”
The government’s business innovation and investment program, which is the avenue for wealthy business migrants to come to Australia is currently being reviewed by the Department of Home Affairs to maximise the scheme’s economic benefit to Australia.
One of the issues being examined is whether higher investment levels, or a different mix of investment, should be required of business migrants.
At the moment applicants for a significant investor visa must invest at least $5m, with at least$500,000 of that placed in venture capital or growth private equity funds which invest in startups and small private companies.
Mr Hedley said the threshold amount should be raised to $1m which, with an estimated number of 250 visas a year, would raise another $125m for venture capital investment.
He said it was realistic to think a “decent chunk” of that amount — around $50m — could be invested in the commercialisation of university research.
Since 2018 Atlas has invested alongside the university-owned commercialisation fund Uniseed in 17 start-up companies through a co-investment fund, Stoic Venture Capital.
Stoic’s managing partner (investments) Geoff Waring said he believed high-net-worth migrant investors could provide a stable and long-term source of funding for commercialisation of university research.
“The next generation of university spin-offs will generate patents, taxes and employment that help Australia’s economy recover and thrive in future,” Mr Waring said.
“The commercialisation of more university research could also enable Australian universities to build significant endowments over time from their royalties and capital gains.
“The resulting endowment income could be used to reduce the dependence of universities on international student tuition fee income.”
Mr Hedley said there was also an opportunity to direct business migration investment to regional areas.
“We think there’s capacity for regional universities to attract investment,” Mr Hedley said. He said it could focus on venture capital to support new businesses in regional areas.
TIM DODD, HIGHER EDUCATION EDITOR
Tim Dodd is The Australian's higher education editor. He has over 25 years experience as a journalist covering a wide variety of areas in public policy, economics, politics and foreign policy, including reporti...
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