Innovation through Clusters

Innovation through Clusters will provide government grants to firms, business associations and other organisations to improve supply chain management skills, targeting the industry areas of aviation, biotechnology, food and farming, ICT and education.

The geographic dispersion and fragmented structure of regional industries means that many regional companies face particular challenges moving into supply chains. This can impact the effective development and operation of supply chains and clusters in regional areas. Regional firms will be able to better integrate with networks or clusters of companies that undertake all aspects of design, production, packaging, transport and distribution – ultimately to help grow their businesses.

An industry cluster approach has a proven track record in alleviating market barriers facing regional businesses and has effectively facilitated supply chains and stimulating new economic, business, investment and export development opportunities. There are a number of high-performing clusters across regional Victoria, including the Northern Victoria Poultry, Geelong Food Co-Products and the Ballarat ICT clusters. From 20 clusters to date, more than $14.9 million of exports and $14.6 million of investment have been generated, creating more than 160 new jobs across regional Victoria.

The government grants-based Innovation through Clusters:

  • assists existing regional clusters to streamline their activities and, where feasible, develop spin-off entities
  • maps new supply chains and networks
  • identifies new clusters (with an emphasis on those with the potential to develop research and development/higher education links leading to innovation)
  • creates a range of new competitive business entities in regional Victoria with an emphasis on export and import replacement
  • produces investment attraction and both direct and indirect flow-on of jobs.

Government grants are available for the appointment of a cluster coordinator and activities to support the development or strengthening of clusters.

Who Can Apply

The target group for this initiative is regional businesses of a similar nature plus their respective supply chains and other linkages within a geographical area. Industry associations and higher education and research institutions will be expected to be represented in an ap plication.
Government grants may occur through a local government authority, university, industry association, lead company within a cluster or an incorporated cluster.

Funding Support

Government grants will generally be available in the following way:

  • Seminars/Workshops -up to $2,000 per seminar / workshop (up to a maximum of $6,000 per annum)
  • Cluster Feasibility Study – Mapping Studies-Economic Impacts up to $30,000 (on a 3:1 funding basis)
  • Cluster Coordinator Funding is provided on a sliding scale:
    • Year One of Appointment. Up to $60,000 funding provided by Government on a 3:1 basis with $20,000 cash and any in-kind support provided by cluster stakeholders.
    • Year Two of Appointment. Up to $40,000 funding provided by Government on a 1:1 basis with $40,000 cash and any in-kind support provided by cluster stakeholders.
    • Year Three of Appointment. A maximum of $20,000 funding provided by Government with the balance of project cost coming from cluster stakeholders.
  • Cluster Project Implementation – Up to $50,000 (on a 1:1 funding basis) which can include a management fee of up to $5,000 for the cluster project manager

In calculating the level of government grant assistance, in-kind will beconsidered subject to the following requirements:

  • no more than 50% of applicant (and partners)contribution being in-kind;
  • skilled labour costing of $35 per hour;
  • unskilled labour costing of $15 per hour;
  • equipment costed at standard commercial hire rate; and
  • councils are generally ineligible from providing in-kind as part of their funding contribution.

Eligible Activities

Activities that would generally receive government grants for a new cluster include:

  • engagement of a cluster coordinator / facilitator;
  • conduct a mapping/capability audit;
  • development of feasibility study/ economic impact study for the development of the cluster;
  • development of cluster governance arrangements;
  • development of a cluster vision and strategic plan;
  • development of a cluster communications strategy;
  • delivery of seminars/workshops to cluster stakeholders; and
  • identification of priority projects

Activities that would generally receive government grants for an existing cluster include:

  • updated review of cluster status and strategic plan;
  • review of governance arrangements;
  • review of current and potential priority projects undertaken by the cluster;
  • review of ongoing financial sustainability;
  • review of any spin-off entities/potential entities developed by the cluster (commercial outcomes);
  • potential to link likeminded clusters (domestically and internationally);
  • case study successful cluster initiatives that include the private sector, higher education and research and development institutions; and
  • ongoing involvement of cluster coordinator / facilitator.

Ineligible Activities

Activities that would not generally receive government grants include:

  • for projects that have commenced or been completed prior to receiving funding approval;
  • for recurrent operating costs;
  • on an ongoing basis once the project is completed;
  • where projects are being undertaken by the private sector as a result of Government contractual arrangements;
  • for projects requiring full funding or where funding is normally provided from other State, Commonwealth and/ or local government sources;

Assessment Criteria

Applications will be considered on the basis of the following assessment criteria:

  • mapping of the proposed cluster – this involves the identification and verification of the major industry stakeholders that could potentially participate in a cluster as well as other stakeholders such as research and educational institutions and suppliers;
  • preparation of an ‘’Investment Logic Map’’(ILM) – this identifies the drivers behind the formation of the cluster, the objectives of the cluster and the stakeholder benefits. It also explores the enablers that need to be put in place and the changes that need to happen leading to those benefits; and
  • identification of the cluster chair and steering committee representatives – looking for strong leadership, and a balanced representation of stakeholders across the cluster (predominantly private sector – but with the necessary range of skills to identify problems and opportunities and drive change through to delivering solutions to those problems and opportunities).

We are specialists in preparing and winning government grants. If you require assistance with a government grant application please contact us to discuss further.

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