The NSW government today made available $25 million in funding for ICT research and development.

Announcing the funding over five years from 2007-2012, NSW Minister for State Development, Ian Macdonald, said the money will be allocated to Australia's ICT research centre of excellence, NICTA.

The funding was made available following an evaluation from the NSW department of state and regional development, which found in its first five years NICTA has generated benefits to NSW totalling $168 million.

NICTA has amassed a technology portfolio of 60 patent applications and has created four new companies with more than 50 employees.

Technology developed by NICTA is now in the hands of hundreds of millions of mobile phone consumers through its spin-out Open Kernel Labs.

NICTA's researchers are developing a range of practical technologies at its labs at Australian Technology Park such as the Smart Transport and Roads (STaR) project which provides solutions for traffic problems in Australia and around the world.

NICTA CEO David Skellem said research in this field will lead to large economic and environmental benefits arising from better traffic control, more reliable travel times and more efficient incident management.

"The centre's research is about problem-solving based on breakthroughs in knowledge and fundamental innovation. It is use-inspired," he said. "It is not research for research's sake."

"We work with industry and Government to identify problems that are best solved by ICT breakthroughs and apply our expertise to develop knowledge and technology to solve those problems."

Dr Skellern said other projects underway in its two NSW-based labs cover logistics and transactions, as well as solutions for financial services.

He said the state government has identified these as key sectors for focus under the 2006 Innovation Statement and State Plan.

As a result, NICTA is applying its research efforts to drive fundamental innovation in those sectors.

The $25 million in funding announced today follows an earlier allocation of $20 million provided by the government for the period between 2002 and 2007.

This new agreement means the government has provided NICTA with a total of $45 million over the decade from 2002 to 2012.

Members of NICTA include the Australian National University and University of NSW.