Australia’s tech start-up sector continues to face barriers to achieving world-class status, according to peak advocacy group StartupAUS, which yesterday launched a report recommending 14 actions to unlock the sector’s full potential.
Speaking at the launch of the third annual Crossroads report, held at International Towers in Barangaroo, StartupAUS CEO Alex McCauley highlighted the importance of fostering the sector’s growth, noting Australia’s traditional industries are under siege by global competitors
“It has been a strong year for start-ups with some solid progress in the transition to a competitive, high tech economy,” he said.
“Furthermore, 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 start-up 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 Australian.”
McCauley said the latest Crossroads report, which reviews the nation’s start-up ecosystem, includes 14 policy options to address to “generate high impact, immediate improvements to the success of our start-up ecosystem”. Recommendations included:
- Improving the R&D tax incentive by making it more favourable to start-ups: “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 start-ups.”
- 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 start-up 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 start-ups to Australia: “Australia can be an attractive destination for foreign start-ups, however internationally there is still limited appreciation of the breadth and depth of start-up activity that exists here. In parallel with implementation of an Entrepreneur Visa, an international business development capability would help to inform promising start-ups 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, director of Spike Innovation, Australia needs to produce a greater amount of entrepreneurs and do everything possible to stack the odds in their favour.
“Start-ups can be an economic growth engine for Australia, but only if we greatly increase the number of start-up founders and equip them with the skills, capital and supportive regulatory environment they need to succeed on a global stage,” he said.
“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 start-ups we still see many first-time founders learning by trial and error. We need to invest in start-up founders and ensure they have the right skills and connections to compete globally.”