Innovation statement marks a “new era” for Australian startups
A “new era” for Australian startups has been marked with the government’s $1 billion innovation statement, prominent entrepreneur and investor Steve Baxter says.
The Australian startup community has welcomed the set of more than 20 policies across numerous portfolios focusing on unlocking investment for early-stage companies, encouraging international talent to come to the country, the creation of two large co-investment funds and a push for STEM education.
But it has been criticised for lacking big action on gender diversity in the sector and not providing incentivises for later stage startup investments.
For Fishburners general manager Murray Hurps, it’s the “most important and potentially impactful moment” in his startup life.
“It’s wonderful. It ticks so many of the things people have been asking for a long time,” Hurps says.
“I can’t wait for it to start and for more startups to benefit from it.”
There is enormous potential in the raft of policies and initiatives, Baxter says.
“We have never seen innovation at the top of the national agenda before – we need to make the most of this historic opportunity,” he says.
“This demands collaboration between all levels of government, our higher education sector and industry.
“I am confident today’s policy framework will mark the beginnings of a new era for Australia’s startup and entrepreneurial community.”
The entire gamut
Blue Sky Venture Capital investment director Elaine Stead says the statement shows an unprecedented level of support for a startup’s entire lifespan.
“It looks like they’ve tried to provide a really comprehensive policy framework which runs the gamut of early-stage publicly funded research all the way through to commercialisation, which is really positive,” Stead says.
“It’s the first time we’ve seen a real dedication to the entire innovation spectrum.”
“I think this is going to broaden the investor community and it opens up angel and VC investment. That will broaden the capital pool quite significantly and that’s exciting for the sector.”
Plugging the funding gap
AVCAL CEO Yasser El-Ansary has welcomed the statement’s changes to the taxation system to incentivise more investing in early-stage, high-growth startups.
“This will go a long way towards plugging the current capital and commercialisation gap between our research investment and entrepreneurial potential, with the task of bringing these ideas and products to the market,” El-Ansary says.
“For too many years, we have had policy review after review without much being seen in the way of truly transformative policy reforms focused on long-term outcomes.”
For Code Club Australia national program manager Kelly Tagalan, the announcement’s focus on education was crucial.
“Nothing makes us more proud to hear than the leader of this great nation directly speaking to the need to get kids coding,” Tagalan says.
“The most important thing to recognise for education is that our prime minister sees why we have to adjust our view of technology and economy when we talk and think about education.”
“When the prime minister mentions that this is a cultural shift, we circle and we cheer at our HQ. Innovation isn't a buzzword, it's a way of teaching, a way of learning, a way of doing business.”
Here’s what the rest of the startup community thought of the startup:
- Nicole Williamson – startup advisor and investor
Today is a great day for science and startups in Australia. The Prime Minister has focussed on every aspect of the Innovation system to supercharge a new ideas boom.
We were hoping to see more direct focus on women in tech in the innovation statement. There’s $13 million for STEM education for women and establishment of a startup “Male Champions of Change”, one of our key recommendations at Wyatt Roy’s recent Policy Hack which is a great start. But we need to turn ideas into action.
We also want the Prime Minister to include more women in the top team advising him on Innovation, at the moment it’s a sea of men.
- Josh Anthony – River City Labs general manager
We are thrilled to witness such an energised commitment by the Turnbull government to boost Australian entrepreneurship. I am extremely encouraged to see a consistent and collaborative national approach to Australia’s innovation sector. To have our government pledging its support to growing the number of startups establishing businesses here is a landmark win for the startup and entrepreneurial community.
- Jana Matthews – ANZ Chair in Business Growth
Great research that pushes the boundaries of knowledge is needed to produce breakthrough innovation. In Australia, CSIRO and the universities are the two groups that undertake research so it makes sense for the government to fund more, with the expectation that doing so will produce many more breakthrough ideas.
We want to grow more Australian entrepreneurs, but we also need to welcome entrepreneurs from other countries who want to come to Australia to start and grow their companies here. This new visa class should enable that to happen. More successful startups will have a positive, long-term impact on the economy.
- Mark McDonald – Appster founder
This is brilliant news for startups. Whilst messaging apps & social networks seem to get a lot of the startup press. Long term sustainable innovation comes from building and commercialising new things. Driving startups to help commercialise innovation at universities and open source data from government sources will help build a new ecosystem of emerging tech startups.
- Bridget Loudon – Expert360 founder
We welcome the substantial steps announced today to modernise Australia's economy. Not only does it show that we’re keeping up but that we could pave the way for global best practice by 2020 if we keep this momentum. The risk and reward of getting this right or wrong, respectively, is huge.
We have one female developer (out of a team of 6) and she’s from San Francisco. I’m surprised and delighted to see the $13M for more women in STEM. More people in STEM is excellent. Scientists, logicians, engineers will be the future change-makers, so it’s important to have make sure we’re growing a gender-balanced group of bright, ethical, Australian leaders in that space.
- Stuart Stoyan – MoneyPlace CEO
The proposed tax incentives are a great leveller and mean that all types of investors now receive tax benefits from investing in startups, whereas this was previously restricted to VCs. This in turn will provide startups with fairer and better access to capital.
If this had already been in place at MoneyPlace's conception, our capital raising would have been completed much more efficiently and enabled us to focus on growing a great business.
Being capital gains free after three years helps de-risk investments in startups. Ultimately these are highly risky investments, if it doesn’t work you lose your money and if it does you pay capital gains tax. The change in policy is a win for the makers.
- Anne-Marie Elias - Chief Disruptor
I’m really excited about the $8 million Incubator Support Program. However I’m a tad disappointed that the amount won’t go very far - I would have liked to see an incubator support program targeting long term unemployed, skills shortage industries and those industries we know won’t make the next decade. Incubators that focus on transformation would have been a winner in my books.
Overall it’s a great effort to excite the nation about a systematic innovation agenda. The devil will be in the delivery and how the state and territory governments respond to the statement in time for their budgets in 2016.
- Andrew Ward – SelfWealth founder
The biggest hit in this announcement is the move by the Government to offer leeway for startups on the brink, this is a massive change that will relieve stress.
Timing is everything with a startup, and having some leeway, as is the case in the US, could be vital; how many startups would have survived given another three months to get a customer, pivot the business or sign a major deal.
This move is better than tax-breaks, it's giving startups a real chance.
- Rangan Srikhanta – founder and CEO of One Education
Today’s federal government innovation statement is a significant and positive step in positioning Australia as a global innovation leader. After years of under investment it’s great to see the government being a catalyst for innovation.
We hope the statement will pave for the way for non-traditional business models being engaged to solve long-term systematic issues like declining digital literacy at the primary school level to ensure we have a new wave of local talent to compete globally.
- Emma Lo Russo – Digivizer founder
We think we represent Australia's future, built around smart people creating new, innovative companies with new technology that can be exported to the world. As a nation we need to help foster entrepreneurship and with smart ideas so that they can deliver returns to the Australian economy in the future. Today’s statements by the Government will help smart people take the risk they need to create new wealth.
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