In Figure 14 a number of inhibitors that limited the ability to attract external investment in the Tasmanian ICT industry are identified, including:
The failure of the Intelligent Island Board to establish a Centre of Excellence, specifically to develop the Health Informatics Centre of Excellence proposal to the level of being a viable entity;
The time of the “Dot Com” crash around the period 2000-2003, and its impact on ICT investment, and the available of an ICT skills and knowledge base to attract ICT investment. The “Dot Com” crash had a major negative effect on University enrolments in ICT degrees, although this effect was deferred by one or two years in Tasmania, when compared to other regions in Australia;
The lack of joint venture or other form of collaborative investment from business in government sponsored programs in Tasmania;
The negative recommendations contained in a confidential report to the Intelligent Island Board, that highlighted the limited prospects of the existing
Chapter Five – Findings
Tasmanian ICT industry to attract external investment, largely related to issues discussed in section 5.3.1;
A recognition that the amount of funding available through existing funding schemes, including the Intelligent Island Program, and the Business Development Fund, were very limited, and likely to be insufficient to create a sustainable ICT industry alone, or to be able to attract significant external investment.
Chapter Five – Findings
Figure 15. Industry and Investment Attraction (b)
Figure 15 provides an alternative viewpoint of investment attraction for regional ICT investment attraction, particularly in the Launceston region. Namely, that joint ventures with the Tasmanian Electronic Commerce Centre, co-funding of joint ventures between other businesses, and establishment of the Launceston ICT incubator were all means of attracting a degree of external investment into the local ICT industry.
The relationships are supported in the following extracts:
[When Senator Harradine was negotiating the sale of Telstra] “… Tassie was looking for whatever it could do to assist the economy to ... assist in stemming the negative population flow and boosting investment and employment ...” (A: 426-428)
“… the TECC would provide the infrastructure that would lead to … the possibility of attracting new industry to Tasmania … . That particular mission was described several times by DPAC prior to the establishment of the TECC” (F: 448-451)
Chapter Five – Findings
[TECC is] “… attracting investment and businesses re-locating to put new industries, new services and operating them out of Tasmania …” (D1: 261-262)
“…it was about AU$20 million invested in schools alone and that attracted several large suppliers to consider having some base in the state.” (F: 163-164)
“… Ericssons were interesting in investing down here … but Intelligent Island decided to go with Bioinformatics …” (D2: 240-241)
“… on the [Intelligent Island] Board there was a realisation that this money [Intelligent Island Program funding] was a drop in the ocean, and unless there could be significant collaborative investment from industry, and we are talking about, well at least one for one or may be two for one, that the money wouldn’t go anywhere.” (C: 165-168)
“… the [Intelligent Island] Board was very concerned about … creating a sustainable enterprise, and so it spent a lot of its time seeking to attract investors.” (C: 169-170)
“… the [Intelligent Island] Board … contracted consultants to develop a strategic plan for the dispersal of the funds and the Allen Group out of Melbourne were contracted to do this. … they came out with a reasonable plan which was to cut it [Intelligent Island Program funding] up into six different segments … the allocation [included] … five million for investment attraction …” (C: 232-242)
“… it was fairly clear that the small amount of money we [IIB] had there wasn’t going to make any difference … in fact I remember one consultant’s report coming back [to the IIB] recommending against continuing with the investment attraction fund because it wouldn’t make any difference …” (C: 261-265)
“… the Centre of Excellence went through about three iterations, including one twelve month’s operation seeking to attract a biotechnology investor that hadn’t been successful, and it was largely this problem of not being able to find collaborative investment …” (C: 266-268)
Chapter Five – Findings
“… we [TECC through the Business Development Fund] funded seven rounds of projects … of that AU$4.7 million we invested … the projects themselves probably added up to about AU$15-25 million …” (D2: 429-431)
“… it [the IIB] funded international trade trips and investment trips … The Chairman of the [Intelligent Island] Board was … very keen to establish links between Tasmanian industry and the Indian industry … several companies came from India looking for investment opportunities at the time …” (C: 313-320)
“… the 2001 dotcom crash which affected … co- investment possibilities …” (D1: 80)
“I would have to say that’s when a key thing with us [TECC] became the level of investment that was going on from about ’02 to about ’05 was pretty poor …” (D1: 160-162)
“… the Intelligent Island Board … [had] about AU$5 million for investment attraction and there were a number of other related funds and I think for a number of other reasons … that those goals weren’t realised.” (F: 424-427)
“I think everyone very early on, very clearly stated we are not going to be using this [Intelligent Island Program funding] for miniscule projects we’re going to use this for big ticket items to make sure we get the best value out of this thing, and one thing which seemed to disappear over time was that we were going to leverage the funds against investment. (G: 50-54)