The Missing Ingredient in Australia’s Cyber Security Strategy: Why Horizon 2 Needs an Innovation and Commercialisation Focus
Australia is full of strong cyber talent, quality research and people who know how to build good technology. What we lack is the machinery to turn those national strengths into companies that can stand on their own two feet globally. Despite the momentum behind the national cyber strategy, the earliest stages of cyber innovation still lack the support they need.
Funding continues to be a struggle with only a small portion of local venture funding reaches cyber startups. That gap is not just financial; it leaves the country more dependent on overseas vendors at a time when sovereign capability matters more than ever. If the aim is to protect national resources with home-grown technology, we need a way to turn local ideas into commercial products and scale them properly.
Horizon 2 is the right moment to address this. A clear focus on innovation and commercial pathways would help move research and early concepts out of ideation labs and small teams, into companies that can grow, hire, export, and contribute to our national resilience.
The country is not short on talent. What slows companies down is the lack of early specialised capital, limited access to experienced operators who have scaled globally before, and a patchwork of programs that do not always connect. Because of this, too many founders relocate, too many ideas stall, and too many technologies built here end up commercialised somewhere else. If Australia wants long-term capability, built on Australian shores, it has to invest in creating it, not just buying it.
Our submission to the government recommends that Horizon 2 include a dedicated innovation and commercialisation section. This does not require new regulation or a large new structure. It simply needs a more deliberate approach to supporting the early end of the market. The submission outlines several practical steps that can be implemented using existing systems and partners:
- A cybersecurity venture capital co-investment fund that anchors early-stage investment and gives private capital the confidence to deploy into cyber.
- Early-stage co-investment programs designed specifically for cyber, allowing capital to move quickly and directly to founders.
- Support for new cyber-focused venture firms through small establishment grants to help build local investment capability.
- One or two national accelerator programs dedicated to cyber to provide structured commercial support for early-stage teams.
- Stronger research-to-industry pathways that help turn Australian research into real products and companies, including dedicated cyber streams within existing R&D programs.
These steps are relatively modest but would make a meaningful difference. They would give founders with strong technical backgrounds the commercial support they lack and would give investors clearer signals and more confidence to commit early.
Cybersecurity underpins almost every national aspect, including national security, economic continuity, trust in digital services, and the reliability of critical infrastructure. Other countries have recognised this and built commercial ecosystems designed to support early innovation. Australia has the technical capability to do the same, but capability alone does not create companies. Commercial pathways do.
Government leadership is paramount at this stage. Private investors rarely move first in markets that require deep expertise and long timelines. When government sets direction and shows commitment, private capital follows. A targeted effort now would help build a pipeline of companies that can scale globally rather than relocating or exiting early.
Our view is shaped by years of working with founders, CISOs, researchers, and investors. We see the potential every day, along with the structural hurdles that hold founders back. Strengthening the commercial foundation is achievable and overdue.
Australia can build cybersecurity companies that compete globally and strengthen national resilience. This will not happen by chance. It requires a coordinated effort, clear priorities, and a shared commitment from government, industry, and investors.
The full submission containing detailed recommendations and program structures is available above.