World Bank, Federal Government, Minority Business Development Agency, Council of Small Business Organisations of Australia, Small Business Administration, US Federal Government, Australian government, Branson Centre of Entrepreneurship in South Africa, UK government, Australian Federal Government, Obama administration
10 great start-up schemes from around the world
By Oliver Milman
It’s official: Australia is the second easiest place in the world to start a business, according to the World Bank.
Aside from the ease of starting and the healthy numbers of people who run businesses in Australia, there are several impressive Government run programs aimed at helping start-ups, ranging from the likes of Innovation Australia to schemes such as G’Day USA.
However, it’s clear that much more could be done to help budding Australian entrepreneurs. This week’s unveiling of the Obama administration’s huge Startup America program prompted us to ask – what are the best Government start-up schemes around the world that we’d like to see in Australia? Here’s the top 10.
As the Council of Small Business Organisations of Australia ruefully admits, we are lagging behind when it comes to entrepreneurship education. The idea of teaching enterprise in schools was embraced by the US in the 1990s and there are now a wide range of programs of students to tap into.
The Startup America initiative will scale up the Network for Teaching Entrepreneurship scheme to give young people the option of going it alone. Sir Richard Branson has established the Branson Centre of Entrepreneurship in South Africa and even the cash-strapped UK government recently pledged the equivalent of $60 million to enterprise education. Below university level, very little exists in Australia of a similar quality.
Small business bank
The reticence of banks to dole out cash to budding entrepreneurs isn’t new, but the situation has undoubtedly become tougher since the global financial downturn.
Although almost all Australian banks have small business specialists, there is no dedicated institution that lends to start-ups, unlike elsewhere. A publicly-owned small business bank already exists in Canada and a group of London-based investors have revealed that they will follow suit to create a UK version.
However, don’t hold your breath that a similar bank will be launched in Australia. The Federal Government told StartupSmart last year that the idea was a no-goer.
Start-up assistance for minorities and women
The US Federal Government runs the Minority Business Development Agency, which helps those from minority backgrounds start and run a business through mentoring and access to finance and contracts.
The agency’s work appears to be having some impact – between 2002 and 2007, the number of minority firms grew by 46%, compared to 18% for all US firms.
The US Government also runs more than 100 education centres dedicated to female entrepreneurs across the country. The level of start-up support offered by the Australian Government to women and minorities pales in comparison.
Help for unemployed entrepreneurs
Australia may be fortunate that unemployment hasn’t blighted its workforce compared with other developed countries in recent years, but this has led to others forging ahead when it comes to helping the jobless into entrepreneurship.
True, the Australian Federal Government has the New Enterprise Incentive Scheme which helps unemployed people start their own business.
However, the amount of conditions placed on this support compare unfavourably to other schemes, such as a new UK Government initiative to offer anyone who has been on unemployment benefits for more than six months a weekly income and mentorship to help start a business.
Germany has got in on the act too, offering ‘Einstiegsgeld’, a generous package of help for unemployed people who want to start-up.
Hands-on help for tech start-ups is patchy in Australia, partially due to the country’s unforgiving geography. NICTA acts as a decent centre of ICT excellence, but there are precious few other tech hubs across the nation.
Of course, Silicon Valley outshines Australia in this area, but other nations are also starting to invest. The UK Government recently announced a $600 million plan to establish tech centres in east London and the 2012 Olympic Park to boost start-ups.
A centrepiece of Obama’s Startup America program is its ambitious mentorship element. The Government will work with seed fund Techstars and 15 independent regional centres to nurture start-ups.
Over the next three years, more than 5,000 experienced mentors will coach and develop 6,000 young entrepreneurs. Separate partnerships will drive entrepreneurship rates among women and older people. If only a similar effort existed here.
Plenty of successful Australian business leaders do their bit to help support fledgling entrepreneurs, but the level of public/private collaboration is at another level in the US.
On a financial level , the figures are huge – IBM has pledged $150 million to develop start-ups, for instance – but the difference is perhaps illustrated in the smaller details.
For instance, Facebook CEO Mark Zuckerberg will appear at a series of events around the country as part of his Startup Days program. The Startup America program is being chaired by AOL co-founder Steve Case. Why isn’t the Australian Government getting the big hitters on board for its programs?
Red tape reviews
COSBOA executive director Peter Strong recently bemoaned the lack of joined-up Government thinking when it comes to small business, telling StartupSmart: “The Government’s innovation programs are very good, but they are aimed at particular sectors. They have to be part of a broader strategy.”
“Retail is a good example. We have a review of the sector at the moment, but it’s reactive to the scrutiny it has been under recently. It’s not part of a larger strategy.”
On the issue of regulatory reviews, media chatter over the retail industry may have pushed the Government to look at the sector, but elsewhere such analysis has a more comprehensive feel about it. Both the US and UK have recently launched wide-ranging reviews of the red tape faced by small businesses.
The best country in the world to start a business in 2010? Denmark, according to the US Govenrment’s Small Business Administration.
Part of this is down to the large number of Danes who embrace ‘intrapreneurship’ – starting up within an existing business or spinning an idea out of their employer. Only Hong Kong has a higher rate of such start-ups in the world.
Various factors drive this, such as the Danish Govenrment’s tax system, which allows people to start-up while still employed without taking on any extra tax burden.
No ‘tall poppy’ syndrome
Complaining about Australia’s supposed ‘tall poppy syndrome’ may seem like a convenient excuse for every business, celebrity or sportsperson who has fallen foul of a media backlash.
However, countless Australian entrepreneurs who have travelled overseas admit that failure is treated differently elsewhere. The US’ entrepreneurial culture encourages people to bounce back strongly from failure and not be afraid of making mistakes.
Whether Australia is lagging behind in this area is hard to pin down, but more frequent Government celebration of the concept of entrepreneurship wouldn’t hurt.