Despite concerns about the barriers to achieving a better startup ecosysystem, StartupAUS chief executive Alex McCauley says Australia is well-placed to capitalise on the strong growth seen in fledgling start-up sector.
“It has been a strong year for start-ups 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,” he cautions.
“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.
He was commenting on the newly released Crossroads report from StartupAUS featuring a state by state look at the progress of local ecosystems, and an analysis of the effect of innovation-boosting measures to accelerating the development of globally significant technology companies.
The report makes recommendations which StartupAUS says would generate high impact, immediate improvements to the success of Australia’s startup ecosystem, including:
• 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 programme. 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 programme: A prestigious national Entrepreneurs-In-Residence programme would engage a series of internationally experienced entrepreneurs, angel / VC investors and startup advisers to provide much-needed guidance to early stage Australian start-ups.
• 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 programme 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 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”.
"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 says.
"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."