Funding bottlenecks risk holding back Australia's innovation workforce

Australian investors are ready to put their money behind the country's next wave of innovation. 

Interest in emerging industries is growing. Yet a range of structural challenges continues to stand in the way.

That is the key finding of a new report from Black Tie, which suggests Australia's innovation ecosystem is not suffering from a lack of investor enthusiasm. Instead, it is being held back by gaps in information, regulatory hurdles and difficulties accessing quality investment opportunities.

The Future of Funding & Innovation Report 2026-27, released by Black Tie, is Australia's first dedicated study examining investor sentiment across funding and innovation. The report combines survey responses from 100 Australian investors with detailed interviews from industry leaders and experts.

Its findings reveal a sophisticated investment community that is willing to support innovation-led businesses, but often struggles to find the right pathways to deploy capital effectively.

Strong appetite

The report paints an encouraging picture of investor confidence.

Nine in ten Australian investors surveyed reported having a moderate-to-high tolerance for risk, highlighting a strong willingness to back emerging industries and growth-focused ventures.

Technology, health and biotechnology, clean energy and fintech emerged as the sectors attracting the greatest investor attention. These industries continue to be viewed as critical drivers of Australia's future economic growth and competitiveness.

Despite this enthusiasm, many investors say they face significant obstacles when attempting to identify and evaluate suitable opportunities.

According to the report, the biggest barriers include a lack of reliable and transparent information, cited by 26% of respondents. High perceived risk was identified by 24%, while 19% pointed to insufficient capital as a major challenge.

The findings suggest that while funding is available, investors often struggle to access the information needed to make informed decisions.

Missing links

Caroline Macdonald, Founder and CEO of Black Tie Holdings Group, believes the issue is not a lack of demand for innovation investment.

Instead, she says the challenge lies in connecting investors with opportunities.

"Australian investors are ready to deploy capital into innovation right now. The appetite and risk tolerance is there, and the sectors are clear, with technology, health and biotech, clean energy, and FinTech top of mind. 

She added, “What's missing is the infrastructure to connect investors with the right opportunities at the right time."

Macdonald argues that improving access to information and investment opportunities could unlock significant capital currently sitting on the sidelines.

She points to digital marketplaces and tokenisation as emerging solutions capable of improving transparency and widening participation.

"Digital marketplaces and tokenisation are a direct solution to this problem, as they reduce information asymmetry and broaden access to high-quality investment opportunities," she adds.

The report suggests these technologies could play an increasingly important role in modernising Australia's investment ecosystem and helping investors discover opportunities that may otherwise remain out of reach.

Innovation gap

Beyond investor access issues, the report also highlights broader concerns around Australia's innovation performance, as mentioned by PR newswire.

One area attracting particular attention is research and development.

Australia continues to lag behind many OECD counterparts when it comes to R&D investment and commercialisation. This underperformance remains a concern for policymakers, investors and business leaders alike.

The report notes that the Federal Government's R&D Tax Incentive program supports approximately 14,000 companies every year at a cost of around $4 billion. However, many eligible businesses still fail to take advantage of the scheme.

A lack of awareness is often cited as a contributing factor. Yet industry experts interviewed for the report suggest the problem runs much deeper.

Marty Gauvin, Principal Advisor of R&D Certainty, believes businesses are frequently missing opportunities because innovation is not receiving the strategic attention it deserves.

"A comfortable life can lead to complacency. Businesses are often receiving very conservative advice and missing out on the government-led support that's consistent with their goals. We need to elevate the R&D conversation at every level: government, business, and advisory," he says.

The comments reflect concerns that Australia risks falling behind global competitors if businesses continue to underinvest in innovation and fail to utilise available support programs.

Industry leaders argue that stronger engagement between government, investors, advisers and businesses will be necessary to improve outcomes.

Tokenisation opportunity

Among the most notable trends identified in the report is the growing interest in tokenisation of real-world assets.

Tokenisation involves converting ownership rights in physical or financial assets into digital tokens, allowing investors to buy, sell and trade fractions of those assets.

Supporters believe the approach has the potential to transform investment markets by increasing liquidity, reducing barriers to entry and opening access to a broader range of investors.

The report identifies tokenisation as one of the most significant opportunities for Australian investors and businesses over the coming years.

Potential benefits include fractional ownership models, more active secondary trading markets and improved access to asset classes that have traditionally been difficult to enter.

Karan Bhai, Vice President of Products and Delivery at Antier Solutions, believes the technology is approaching a major turning point.

"Over the next three to five years, tokenisation will move from being a blockchain narrative to becoming a financial markets standard."

If that prediction proves accurate, tokenisation could fundamentally reshape how capital is raised, invested and traded across Australia.

The report ultimately presents a mixed picture of Australia's innovation landscape.

Investor confidence is high. Risk appetite remains strong. Interest in future-focused sectors continues to grow.

Yet structural issues continue to limit the flow of capital into innovative businesses and projects.

The findings suggest Australia does not face an investor shortage. Rather, it faces an infrastructure challenge. Bridging information gaps, improving transparency and creating better pathways between investors and opportunities may prove critical to unlocking the next stage of growth.

For policymakers, business leaders and investors alike, the message is clear. The capital is available. The interest is there.

The challenge now is building a system capable of connecting both.