What is Impact
The companies that make Australia’s capital-intensive industries function are not the ones that make headlines. The front-page names are often end market operators, the miners, the generators, the service providers. Behind these sits a layer of industrial technology companies supplying everything from plant and equipment, automation and control, robotics, software, engineering services, and the operating systems that enable these industries to function. A company developing spectral imaging systems to characterise mineral deposits in the outback is building the same technology that monitors crop health from orbit, or equipment signatures for the military. Defence, energy, water, transport and resources all depend on the same ecosystem of industrial technology suppliers, and the commercial maturity to bring solutions from one industry to another.
AIX was formed by METS Ignited, the federal government’s Industry Growth Centre for Mining Equipment, Technology and Services. The Department of Industry funded the program which concluded in November 2023. Over its operating period METS Ignited invested $16 million into 35 collaborative projects, attracting 2.5 times matched industry funding, supporting the development of 20 new Australian technology companies. Those companies generated more than 1,000 new local jobs and were projected to contribute more than $900 million in annual revenues to the Australian economy by 2025. The ACIL Allen evaluation of the Growth Centres program confirmed $1.23 billion in returns on $305 million invested, and that was before the program had reached maturity.
The numbers are in the public record, and the operational story of how they were delivered is worth telling.
The design that created the outcome
Most government-funded innovation programs ask applicants to bring matched funding. Typically, this means the applicant matches the grant with their own contribution. This is a reasonable accountability mechanism, but it does carry a structural weakness. The co-funding does not necessarily come from a paying customer. With the structure of our economy, it often comes from a large end market operator with an R&D budget, a research institution with grant funding to allocate, or a peak industry body with a policy interest but no stake in whether the solution will deliver value to a paying customer.
At METS Ignited we took a different approach. Our investment advisory committee required applicants to bring customer funding. Not co-investment generally, but funding from a paying customer committing funds because they believed the solution was worth the investment. We then matched that funding.
The structural consequences of this subtle shift were significant. Applicants had to develop a complete solution to a market problem, and convince a customer they could deliver it. The solution had both a technical and commercial dependency. The applicant had to develop the product, the production, the distribution, implementation, commissioning, and ongoing serviceability. This was not funding prototypes (there were other programs for that); this was funding commercial outcomes.
In practical terms this program logic resulted in three broad pathways. End market operators seeking solutions had to nominate an Australian vendor to work with as the supplier. Research commercialisation projects were required to secure a commercial translation partner before funding was considered. Those that might have been considered start-ups were either spin-outs from operating sites where the innovation had proved its value, but had a bigger role to play, or corporate spin-outs where a development had potential outside the company’s strategic direction.
The outcome was clear
METS Ignited funded the commercial translation of innovation, not the discovery of new capability. Our job was to grow the economy in areas where Australia had competitive advantage. The innovation had to be real, and so too the company, and they needed to prove they had a market to serve.
The structure also generated an elegant compliance mechanism. Milestone payments were conditional on a customer payment signoff. If the customer did not pay, the milestone was not met. The market was the compliance mechanism. It made our program structurally resistant to the most common failure mode of government-funded innovation programs – technically complete projects with no channel to market.
As we documented in the definition of industry matters, most Australian collaborative funding programs inadvertently bypass the commercial translation layer. Our model made local vendors central to the outcome, not an afterthought.
What we measured and why
When we first started measuring outcomes, the question of impact was an ongoing debate. In commercial operations the metrics are simple (well, to define, not necessarily to achieve), orders, revenue, profits, and cash. Our Growth Centre decided on four specific metrics that could be captured at each milestone payment, or each accelerator or masterclass attendance. We measured changes in revenue, counted new jobs created, new customers acquired, and any increase in sales. The data gathering exercise was built into our process, and happened when it was most clear and easily defined.
We supplemented direct measurement with independent sector-wide analysis. We partnered with Slate Advisory to produce the annual State of Play reports, tracking sector challenges and growth. We worked with our sister Growth Centre NERA and AlphaBeta (now Accenture) to measure the impact of robotics and automation on industry (Staying Ahead of the Game). We teamed up with the peak industry membership organisation Austmine to conduct sector-wide surveys across a sample group much broader than our own. These provided independently verified analysis beyond our own program reporting.
Internal impact of metrics
This approach produced accountability that could not be ignored (and made a few people nervous along the way). Common practice across other growth centres was to rely on more intangible metrics like number of registered “members” or capital raised by companies who may have participated in programs. These casual measures answered “who did the program touch” rather than “what did our program deliver.” The significance of our impact became visible when we evaluated outcomes against our actual contribution to the economy.
Internally we also adjusted our own reporting. While our early reporting was focussed on sector competitiveness plans, and the needs of industry, these objectives became too broad and ambitious to deliver real outcomes in the funding period. Working closely with the Department of Industry, we moved our reporting from ambition statements to targeted KPIs and performance objectives. We aligned to a commercial process, producing a business plan setting out our goals for the year ahead, and an annual report evaluating our performance against our stated objectives. This had two immediate effects: program performance became visible and measurable, and results were clear to those responsible for helping us succeed.
What focus requires
All six Industry Growth Centres operated under the same government mandate: accelerate commercialisation of innovation, enhance industry skills and capabilities, grow exports in areas of national competitive advantage. The path of least resistance was sector advocacy: representing industry interests, counting members, building profiles. While that generates visible activity, it does not deliver measurable outcomes.
We rebuilt program delivery around stated outcomes. My first meeting with the Minister made it clear what was expected of us. She did not want to hear how wonderful our sector was, she knew that already, it was why we existed. What she wanted to see was how we were leveraging that capability to build competitive advantage for Australia. This simple statement was the most useful accountability metric that should define any government-funded program.
The answer required us to do four things, each with specific and traceable objectives. We ran masterclasses to build specific commercial maturity skills, from sales methodology, to managing trademarks and IP. We delivered accelerators through industry practitioners bringing real-world experience. We funded collaborative project with vendors at the centre, and paying customers as the demonstration of success, and we built a sustainable ecosystem beyond funding: initiatives like the Electric Mine Consortium, Core Innovation Hub, Unearthed, Resources Centre of Excellence, QuantumTX, and the Australian Innovation Exchange (AIX).
Focus required us to say no to activity that sector stakeholders valued but did not progress the program objectives. While it raised some eyebrows at the time, the outcomes spoke for themselves.
What we delivered
METS Ignited concluded with a validated track record. The Australian Innovation Exchange was formed to build on that success, supporting local companies as the translation engine for Australian innovation.
The design decisions that produced the Growth Centre outcomes were not specific to any one sector. The customer funding model works where there is a market. The impact metrics work wherever jobs and revenue can be measured. The focus on objectives works when they are sustained under pressure.
This outcome is not the result of a new model, but of the right model for our economy. Sweden faced a similar structural problem almost a century ago, a world class resources sector with too few local companies to support it. Their policy response was deliberate: identify industry challenges and fund local companies to solve the problems. Companies like Ericsson, Epiroc, Volvo, Atlas Copco and Sandvik dominate the global industrial supply chains and the local Swedish economy.
The local discussion is now turning to industrial AI, productivity, clean energy, sovereign capability and a Future Made in Australia. Getting these opportunities right will require exactly this design discipline applied to the programs that connect innovation with impact. That experience exists in Australia, a proven model with hard evidence of impact. Australian Innovation Exchange is building on the lessons learned and applying them now.