The ACT government wants to broaden the city's brand beyond tourism and focus on knowledge and business innovation to expand the local economy.

The Economic Development Directorate says branding is focussed largely on tourism and while the current ''See Yourself in Canberra'' tourism message has been effective, it needs an overhaul.

Canberra Business Council chairman and founder of a multinational software company, Brand Hoff, said unless Canberra united its top researchers and educators, it would go backwards in the carbon-free information age

Mr Hoff's comment is in the Business Council's submission proposing a $16 million joint venture between the private sector with the government over five years to establish a ''digital city'' innovation scheme to create products like smart water meters, online queue views and traffic congestion warnings that would improve living standards in Canberra and be exported elsewhere in Australia and overseas.

Deputy Chief Minister Andrew Barr launched a business development strategy yesterday which adopts one of the Digital City's ideas, of prizes to businesses to commercialise their ideas.

Mr Barr also announced cutting payroll tax, a doubling to $100,000 for small information technology companies competing with multinationals and an extra $500,000 to a business development fund which it runs in partnership with the Hindmarsh Group, to provide venture capital. Business Council chief executive Chris Faulks said the territory had not yet taken full advantage of a significant competitive edge of being the national capital and seat of federal government, which had by far the largest pockets for procurement anywhere in Australia.

Ms Faulks said the ACT government's latest business strategy showed leadership, but the council wanted to see the money and commitment for programs like Digital City in the ACT budget on June 5, to exploit Canberra's world-class research and learning institutions.

''We have not really joined the dots between those and said, 'OK, with all of that fantastic research happening here how can we take those ideas and commercialise them to build industry capability and export that to the rest of the world'.''

It was of little use branding Canberra without having smart innovations, such as cashless meters, to show the city functioning as a great place for business.

General manager of Canberra software company Intelledox, Michelle Melbourne, said doubling funding for collaboration among small and large information technology companies would help home-grown firms become suppliers in larger projects.

''The CollabIT program helps growing ACT companies to strengthen their profile and experience working in partnership with multinationals such as CSC, Microsoft, Lockheed Martin and CapGemini,'' she said.