According to not-for-profit organisation StartupAUS in its latest Crossroads report, despite positive developments over the past 12 months, Australia continues to under-invest in catalysing high impact entrepreneurship and supporting its startup ecosystem.
StartupAUS says 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, and compared to our regional neighbours like China, Australia is performing poorly.
The report notes a dramatic fall in the government’s provision of matching capital to support startups, with the Innovation Investment Fund abolished in last year’s budget and the Entrepreneurs Infrastructure Program having only half the funding for startups of Commercialisation Australia, the body it replaced.
And, in a further comparison, it cites the UK’s delivery of a multi-billion pound suite of pro-startup programs, while at the same time pointing out that Australia “still lacks a coherent innovation strategy, and has reduced its investment in knowledge economy initiatives at a time when almost all other developed economies are increasing theirs”.
Alan Noble, StartupAUS director and Engineering Director, Google Australia says that beyond government action, Australia needs “genuine cultural change to view startup as a viable and attractive career choice”.
“Currently the Australian education system is geared toward preparing students for the workforce. Introducing entrepreneurship education across the primary, secondary and tertiary education system would equip young people to start businesses and spur economic growth.”
Another StartupAUS director and Entrepreneur-in-residence at Fusion Labs, Peter Bradd, over the past 12 months, there have seen some “great Australian tech startups emerge and begin to make their mark globally”.
But, according to Bradd, Australia is actually falling behind other countries when it comes to rates of tech company formation and growth.
“Our future economy depends on our learning how to mine our knowledge and commercialise that resource, just as much as it depends on finding and extracting oil and gas or mining coal.
Other developed countries are making far greater investments in their startup ecosystems. Australia’s policy-makers need to invest in finding, supporting and growing the tech start-ups today that can become the pillars of Australia’s economy tomorrow.”
StartupAUS makes a number of recommendations Australia should implement to address its current poor record in supporting start-ups, including:
• The creation of a national innovation agency
• An increase in the number of entrepreneurs
• Improvement in the quality and quantity of entrepreneurship education
• An increase in the number of people with ICT skills
• Improved access to startup expertise
• An increase in the availability of early stage capital to startups
• Addressing the legal and regulatory impediments
• An increase in collaboration and international connectedness
According to Professor Jana Matthews, StartupAUS director and ANZ Chair of Business Growth at the UniSA Centre for Business Growth Australia can either invest in the development of a knowledge economy in which startups can flourish, “or we can maintain the status quo and forfeit Australia’s prosperity and competitiveness.”
Glenn Smith, StartupAUS director and founder, ATW Capital said StartupAUS was committed to working closely with all parts of the Australian startup ecosystem, including entrepreneurs, corporates, universities and all levels of government, “to develop and implement policies and programs to systematically grow Australia’s technology sector so that it can drive economic prosperity for future generations.”
To download the full 2015 StartupAUS Crossroads report click here.