Australia is well-placed to capitalise on the strong growth seen in its fledgling startup sector, but some significant barriers remain to enjoying a truly world class startup ecosystem StartupAUS, Australia’s peak advocacy group for startups recently said.
Releasing the third annual Crossroads Report, a comprehensive review of the nation’s startup ecosystem, StartupAUS CEO Alex McCauley said an improvement in the conditions for entrepreneurship in Australia could see up to $170 billion added to the Australian economy.
“It has been a strong year for startups with some solid progress in the transition to a competitive, high tech economy. However, at a time when our traditional industries are under siege by global competitors, it’s vital we foster the growth of this powerful new economic segment.
“We have made a lot of progress. Australia is ranked 1st in the Asia-Pacific and 7th globally in the 2017 Global Entrepreneurship Index. However Australia still records some of the lowest rates of startup formation, and one of the lowest rates of venture capital investment for a developed nation.
“With the right kind of focus, we have the opportunity create companies that will disrupt global industries and generate powerful economic growth and jobs for Australians,” said Mr McCauley.
What needs to be done to help Australia’s startups?
Supported by Australia’s leading startup authorities and enterprise contributors, the StartupAUS Crossroads Report features a State-by-State brief on the progress of local ecosystems, an analysis of the effect of innovation-boosting measures already in place and identifies 14 concrete policy options that will address growth barriers and help us accelerate the development of globally significant technology companies.
These include recommendations which would generate high impact, immediate improvements to the success of our startup ecosystem. These are:
Improving the R&D tax incentive by making it more favourable to startups: The R&D tax incentive is the government’s largest innovation-focused program. It could be made significantly more effective by increasing a portion of the refundable tax offset and paying it quarterly for early-stage startups.
Creating a national innovation agency: A national innovation agency would address the current fragmentation of innovation policy and expenditure, and give much-needed focus to Australia’s efforts to transition to a knowledge economy.
Implementing a national Entrepreneurs-in-Residence program: A prestigious national Entrepreneurs-In-Residence program would engage a series of internationally experienced entrepreneurs, angel / VC investors and startup advisors to provide much-needed guidance to early stage Australian startups.
Making targeted amendments to legislation affecting Employee Share Schemes: There remain two fundamental issues to the Employee Share Schemes (ESS) that require attention in order for ESS to achieve their full potential. Addressing these would remove the remaining bugs in what is otherwise a world-class system.
Establishing a program to attract promising international startups to Australia: Australia can be an attractive destination for foreign startups, however internationally there is still limited appreciation of the breadth and depth of startup activity that exists here. In parallel with implementation of an Entrepreneur Visa, an international business development capability would help to inform promising startups from around the world about the benefits of establishing in Australia and encourage them to move here.
According to the report’s author, Colin Kinner, Australia needs to produce a greater amount of entrepreneurs and do everything possible to stack the odds in their favour.
“Startups can be an economic growth engine for Australia, but only if we greatly increase the number of startup founders and equip them with the skills, capital and supportive regulatory environment they need to succeed on a global stage.”
“Having spent some time in Silicon Valley it’s clear that Australia is a challenging place from which to grow a global tech company. We are geographically isolated from major markets, and despite having some world-class startups we still see many first-time founders learning by trial and error. We need to invest in startup founders and ensure they have the right skills and connections to compete globally,” Mr Kinner said.