When it comes to innovative entrepreneurship, Australia is seriously lagging behind its global counterparts, according to a number of commentators. Australia has even been described as having a “primitive export basket” by a Harvard economist!
If we are serious about improving our long-term economic prosperity, then we need to strongly consider the ways in which we can encourage and support tech start-ups – or so says Adrian Turner, author of “Blue Sky Mining: Creating Australia’s Next Billion Dollar Industries.” In the Crossroads Report produced by StartupAUS, Turner states that our economic future is in jeopardy if we don’t address the lack of support for entrepreneurship in Australia.
Here is a look at what exists now in terms of support for start-ups, and four ideas from the Crossroads Report to promote and encourage start-ups in Australia.
What do we mean by tech start-ups?
The term doesn’t just refer to any new business initiative that involves technology, but those that have strong potential for growth and to impact the global market due to innovation and differentiated products.
While there are plenty of small and medium businesses in Australia, many of them are not equipped to compete on a global scale or offer products to a very large market, nor do they all involve disruptive innovation. Tech start-ups on the other hand have the potential to grow into billion dollar companies – or what are known as ‘unicorns’.
A few examples of successful unicorns include Facebook, Twitter, Yelp, and Spotify. In Australia some successful start-ups include Seek, Freelancer.com, and Carsales.com.au among others.
Examples of the innovative use of technology might include digital books and music, email to fax cloud services that enable users to send large files via email, online retail / sales, and file share software.
Current state of play
In Australia, around 70% of businesses are service-based, and many may be very vulnerable to digital disruption. In addition, about 64% of exports come from the resources sector. This may have been good for Australia’s prosperity thus far, but times are changing fast, and we need to adapt if we wish to thrive into the future.
Experts also agree that greater economic diversification in Australia will be vital for ongoing prosperity. Apparently at the present time, Australia ranks 52nd out of 124 countries for the Economic Complexity Index that was developed by Harvard economists.
On the topic of disruption, we only have to think of the ways in which companies and markets have been disrupted by new technologies in recent years to be aware of how innovation can displace traditional industries. For example, Amazon disrupted the book market, iTunes did the same for the music industry, and eBay and other similar platforms have disrupted traditional retail.
When it comes to ongoing survival and growth, it’s far better to be a disrupter than to be the disrupted!
While Australia has one of the lowest rates of venture capital investment in the world, according to the report, there is some measure of support for tech start-ups and entrepreneurs in general. These include advisory services and mentorship and network programs, co-funded grants, and collaboration opportunities.
There are also some quality IT / computer science programs in schools and universities. However, calls have been made for the Australian Government to do a lot more to encourage and support start-ups, including increased education and mentoring, a supportive regulatory framework, and improved availability of capital.
Suggestions for solutions in the Crossroads Report
An ‘entrepreneur visa’ to attract entrepreneurs to Australia, to accelerate growth of the start-up ecosystem, and promote retention of some of our best international students.
Improved education, including a Young Entrepreneur Scholarship for university students, and teaching of more entrepreneur subjects in schools and universities.
- Greater financial investment and assistance. Ideas include increased availability of early-stage capital, encouragement of angel investment, government-backed investment programs, a young entrepreneurs start-up loan scheme, a change of legislation to allow crowd-sourced equity funding, and tax incentives to prevent our best and brightest from going overseas.
Development of an entrepreneurship-supportive culture. This includes raising awareness of entrepreneurship among parents, teachers and young people, measures to attract more women to entrepreneurship, and a regulatory framework that encourages more tech start-ups.
The ways in which we respond to these and other ideas may have implications for our economy, and the next few years may be particularly important for Australia’s future growth and prosperity. Share on Facebook Share on Twitter Share on Google+ Share on LinkedIn