When it comes to developed economies that have transformed themselves from being heavily dependent on resources and manufacturing, Australia has a lot to learn from Canada.
In the 1940s, manufacturing accounted for 29 percent of Canada’s GDP. By 2005, it was around 15 percent. Today, service industries employ three-quarters of the working population and account for a staggering 78 percent of Canada’s GDP.
Canada is one of the world’s wealthiest nations and a member of the G8. Like Australia, its dollar is strong and its resources base substantial but declining.
We all know that uncertain commodity prices and the tapering of growth in the Chinese economy mean the upward climb in resources income for our own economy is at an end.
So what if Australia took another leaf out of Canada’s book and looked to grow its base of entrepreneurs?
Earlier this month, I went to Canberra to advocate just that to politicians. Unlike many, if not most groups knocking on doors at Capital Hill, I didn’t ask for a free ride.
I put the case that the Australian Government needs to commit to a $20 million loan fund over the next four years to drive the creation of a new breed of employers.
The Enterprise Network for Young Australians (ENYA) believes this would turn on the tap for finance to support the establishment of 1,250 sustainable businesses.
Our goal would be to create 5000 jobs and generate $30 million in tax revenue within five years.
It would be part of a broader policy platform that includes the opening of the New Enterprise Incentive Scheme (NEIS) to young entrepreneurs with Government guarantees on bank loans to start-ups.
NEIS access would be dependent on entrepreneurs completing a three-month Startup Accelerator course to boost the chances of their businesses being viable after three years.
Since 1996, similar government funding to the Canadian Youth Business Foundation has created 5,600 businesses, more than 23,000 jobs and $164 million in tax revenue.
Some 85 percent of those businesses are still operating after five years.
The third plank ENYA is advocating is Federal Government support for the G20 Young Entrepreneurs Alliance Summit in Australia next year.
This is a G20-endorsed gathering of 500 entrepreneurs to work on policies to drive economic growth, job creation, innovation and social change.
Last week I led Australia’s delegation to the Moscow summit, which was a curtain-raiser to this week’s G20.
Making Australia a better place for young entrepreneurs isn’t just a job for government. ENYA has already worked with a banking partner to launch the Fund It! Program.
Entrants can pre-qualify for up to $200,000 in micro loans, credit cards, overdrafts and merchant facilities, even if they have little or no assets to use as bank security.
Access to finance is the biggest single issue for young entrepreneurs and our Fund It! Program aims to facilitate lending of more than $10m to startups over the next 12 months.
The reception I received from our political leaders in Canberra was encouraging without extending to any commitment.
We can continue to talk about Australia needing to sustain growth beyond the mining boom, about continuing to create jobs, and inspiring and engaging our youth to increase our competitiveness to become a world leader in innovation. It’s a positive thing to do in an election year.
But both sides of politics need to convert that talk into a material investment that will produce real economic outcomes.