Australian start-up lobby group StartupAUS recent launched its latest report titled, ‘Scaling up our growth opportunities – Why Australia’s big business economy is working to create a thriving startup environment,’ which outlines the important relationship between big business and start-ups in cultivating a vibrant and energetic innovation environment in Australia.
The report reveals the findings from an August meeting initiated by StartupAUS and KPMG, which brought together senior executives from the ASX 20, whom account for nearly 50 per cent of the ASX.
What does Aussie big business need to do?
It surmised that without a vibrant start-up environment, Australia’s largest organisations face increased risk of disruption from start-ups overseas.
Furthermore, these organisations will be limited in their capacity to respond to the disruption without local IP and innovation to acquire, partner with, or draw upon.
The report outlines the importance of an innovative economy for the future to ensure Australia can compete with nimble international players. The three key requirements are to:
- Acquire start-ups to improve their current businesses and explore new revenue streams.
- Partner with, become customers of, license from, and co-develop ways to reduce costs and increase efficiencies.
- Cultivate the talent these start-ups have through exposure to them, or more permanently through acqui-hire or headhunting.
CEO of StartupAUS, Peter Bradd said, “Tech start-ups are often seen as a group who are disrupting large existing markets – think Airbnb, Uber, Netflix, Paypal and Spotify.”
“However, tech start-ups are actually vital to the existing companies servicing existing markets – especially in the digital world that we are currently living in.
“To respond to this change in processes and culture, and to remain relevant moving beyond the next decade, Australia’s top 20 companies must have a vibrant culture of innovation within and around them.
“It is essential they work with external entrepreneurs and innovators. In doing so they can bypass internal barriers, outsource a lot of the initial risk, and allow for much more speed and agility.”
Why does big business need to work with start-ups?
According to Chair of Stone & Chalk, Craig Dunn, developing a vibrant start-up ecosystem is important for the large lenders in the fin-tech space, as it would create a healthier environment for risk and investment from the large financial services organisations in the market.
“The major challenge is our risk appetite here in Australia. We need to shift the risk appetite of investors to more greenfield opportunities, and the government does have a role in that by underwriting some of the risk through tax benefits,” he said.
General Manager, Head of Consumer Products & Technology at News Corp Australia, Stuart Waite, said: “There is a big cultural and political disconnect when it comes to the startup ecosystem in Australia. We need to instil a sense of urgency if we are going to build a vision, and the first stop is to admit there’s a problem. Corporates also need to lead the way, but the government has a role too.”
Bradd continued, “StartupAUS has an ongoing advocacy role with all levels of government and in addition to the policy recommendations in our two Crossroads reports”
“We are working on an ongoing series of leadership sessions and whitepapers to define and reinforce the opportunities to build our start-up economy within Australia.”