Innovation and sport are two fundamental pillars in the makeup of the Australian psyche. Whether it is pioneering in medicine or dominating our national sports on the global stage we’ve done it with a sense of community and a touch of inventiveness.
Our success in the Olympics over many generations is a testament to our commitment to properly funding that which enriches and defines us yet we’ve unfathomably neglected technology start-ups. We’ve allowed the vanguard of the future economy to shift overseas to enjoy better capital prospects; government-backed incentives and cheaper cost of living – and with them our home-grown talent and visionaries. It becomes an idly accepted self-fulfilling prophecy where young Australian tech entrepreneurs and workers look beyond their own borders for the most exciting and rewarding opportunities.
Federal focus on innovation, retaining talent
However, change may be in the air. The current spotlight on Atlassian and other successful tech start-ups is helping spur a growing pool of public and private investment funding in a burgeoning Australian tech start-up sector.
Tax incentives and investment support from the Australian government for tech start-ups and paled in comparison to San Francisco, London and Tel Aviv whose leading success in attracting tech start-ups is well documented and can be attributed to the significant levels of government funding made available.
Seeking to do something about this and reverse the brain-drain of our most promising minds and companies, Malcolm Turnbull has pledged an innovation package worth $1.1 billion over the next four years. Many entrepreneurs are applauding the federal government’s new-found love of innovation and commitment to retain and develop talent within Australia.
High cost of living sending talent overseas
The City of Sydney has recognised the importance of the ‘new economy’ and last year exhibited a draft tech start-ups action plan, detailing how they will work with entrepreneurs, the industry and government to help Sydney join the ranks of London, Tel Aviv and San Francisco.
This federal package is an encouraging step in the right direction but there are still many obstacles to the successful development of tech start-up ecosystems in cities like Sydney. Atlassian co-founder, Mike Cannon-Brookes expects the high cost of living will continue to be a turn-off for software engineers who have their pick of roles in the US and other countries, and that’s a challenge for Australian start-ups
The most promising government initiative recently announced is the launching of the Australian Government’s first Landing Pad at Rocketspace, a technology campus in San Francisco. The Landing Pads are designed to help Australian entrepreneurs ‘bring their ideas to market and build high-growth and high-return enterprises’. It is expected Israel will also be a Landing Pad location.
The key challenges for Australia: funding and talent
Australia’s arguably risk-averse banks and some big businesses are beginning to venture into investing in start-ups, although still relatively small in global terms.
In light of the challenges, the list of Australian start-ups is impressive – Atlassian, Campaign Monitor, Menulog, Freelancer, BigCommerce, Surfstick and Catch Group. The key challenges for Australia will be to develop, retain and attract talent as well as having the right framework to grow the investment pool available to start-ups.
Technology and innovation is the future of the world economy and we can be a leader if we really want it. The start-up ideas are certainly there, the industry just needs us to treat innovation the way we treat sport – with pride and a winning mentality.
About the author
Peter Khalil is the Founder of Perris Knightsbridge Chartered Accounts