Australia’s startup scene is poised for greatness, but according to two incisive reports we are also on the brink of letting a game-changing opportunity pass us by without some bold thinking.
In October 2013, Google and PwC released a report on the ways to accelerate the growth of the Australian technology startup sector. The comprehensive report – ‘The Startup Economy: how to support tech startups and accelerate Australian innovation’, concluded that, while Australia’s startup sector is currently small, with 1500 identified tech startups, the sector could nevertheless make a significant contribution to the national economy with the right support.
“The Australian tech startup sector has the potential to contribute $109 billion or 4% of GDP to the Australian economy and 540,000 jobs by 2033 with a concerted effort from entrepreneurs, educators, the government and corporate Australia,” the ‘Startup Economy’ report says.
In April 2014, startup advocacy group StartupAus released a report entitled ‘Crossroads: an action plan to develop a vibrant tech sector in Australia’. This was a complementary analysis created to take up the baton from the Google Report and list actions that would accelerate the growth of the Australian sector.
In a far-reaching analysis of Australia’s international position, the StartupAus report concludes Australia lags well behind other countries in recognising the power of the startup economy, with the lowest rate of startup formation in the world and a similarly low rate of venture capital and investment.
The report says: “analysis of the growth of global tech ecosystems emphasise the importance of leadership, communities, culture, education…”, and advocates a seven-step action plan to boost Australia’s startup sector:
Action 1 – Increase the number of entrepreneurs
Action 2 – Increase the quality and quantity of entrepreneurship education
Action 3 – Increase the number of people with ICT skills
Action 4 – Improve access to startup expertise
Action 5 – Increase availability of early stage capital to startups
Action 6 – Address regulatory impediments
Action 7 – Increase collaboration and international connectedness
Together, the reports are essential and compelling reading, demonstrating just how large a force the Australian startup community could become.
Importantly, both reports strongly point to notions of culture, perceptions and community engagement as critical elements in achieving the promise startups hold.
“Entrepreneurial activity is heavily influenced by the cultural environment surrounding entrepreneurs,” says the ‘Startup Report’. “Ecosystems where people see opportunities to start a business, where people believe in the skills and knowledge they hold, and where entrepreneurial successes are highly visible in the media are good indicators of the population’s entrepreneurial intentions and total early-stage entrepreneurial activity.
Following suit, the ‘Crossroads’ report says that a successful startup ecosystem needs a pro-entrepreneurial culture, guidance from experienced entrepreneurs to provide visible successes and role models.
If we ever needed proof that the model advocated in the reports could revolutionise the uptake of startups, the recent launch of Startup Canada Communities has shown a trailblazing approach.
The Startup Canada Communities national network is the first time a country has attempted to scale the community model proposed by entrepreneur and investor Brad Feld in his provocative book ‘Startup Communities.’
In his ‘Boulder Thesis’, Field defines characteristics needed to unleash the power of a startup community. Drawn from his experiences in the Boulder (USA) – one of America’s most dynamic small cities for new ventures. The characteristics are:
- Entrepreneurs, and only entrepreneurs, should lead a startup community
- Leaders must have a long-term commitment
- The startup community must be inclusive of anyone who wants to participate in it.
- The startup community must have continual activities that engage the entire entrepreneurial stack
The result in Canada has been nothing short of inspirational. In a pilot program, Startup Canada Communities has provided thousands of entrepreneurs with access to mentors, workspace, and funding to start and grow their businesses and to connect with other startup founders.
Bringing it home
If Australia is to take full advantage of the potential of its startup sector, the lead shown by StartupAus in its action plan, echoing the sentiment of the game-changing Boston Thesis, could well lay out the bold steps that lay ahead.
According to StartupAus National Secretary, Peter Bradd, the release of its ‘Crossroads’ report is a pivotal point in supporting the phenomenal potential of Australia’s startup sector, giving startup champions a compelling story to influence and educate governments on their role in supporting innovation.
“Countries that are supporting their startups are reaping the benefits. Here in Australia we’ve been slow to support the sector and we are falling behind.”
“The report is an essential tool in being able to talk to the Australian government about the value an important of our startup sector,” he says.
“It gives us a clear way to put in place steps to achieve the potential of the industry, with the right support.”
Creative events like Oxygen Ventures’ The Big Pitch – where startups can pitch for venture capital funding in the public eye – are designed to embolden the startup sector are pivotal in providing the sector support that is so obviously necessary.
image: collage of AUS startup founders.