News & Analysis

Bill Shorten’s ‘ode to startups’ budget reply highlights a critical issue in the ecosystem that needs addressing

- May 20, 2015 5 MIN READ

Unless you operate on the extreme outskirts of Australia’s startup ecosystem, you would’ve most likely participated in the conversations happening across the internet about Labor’s Budget response last week. The general consensus has been that Labor “gets” startups more than the current government does.

After Joe Hockey handed down his budget for the nation last week, there were mixed reactions from the Australian startup community. Obviously there was praise about the initiatives that help early stage tech companies, but even the good bits of the budget were not enough to silence the overwhelming rhetoric from the ecosystem that the government just don’t know the difference between startups and small businesses, when in fact, the government does.

There are various sentences in the new budget that says ‘small businesses and startups’, but, to the government’s credit, the two words have not been used interchangeably. If the government thought startups are small businesses, then X would equal X. It’s unlikely that a sentence would contain two Xs if it means the same thing.

As expected, some founders took to social media and others spoke to the media directly to voice their frustrations. The sentiment that was echoed throughout the startup community was “startups are not small businesses”.

The fact that this sentiment found its way into to most mainstream and niche media platforms is problematic, because frankly, the message sent by those who spoke on behalf of the ecosystem was that the government is too daft to understand that they geared the budget towards small business. They did this intentionally. Small business operators make up 10 percent of the country’s voting population.

Also quite frankly, small businesses deserved what they were given. The small business community plays a vital role in keeping Australia going.

However, the startup community is just as important. It is also in need of different types of support. That is the message we should have been spouting instead of picking fights. Startup companies for the most part play on a global stage, and innovations that attract both local and international customers is vital for our economy as we move towards the future.

STEM: A critical element to our startup ecosystem’s future

While there are many issues that concern Australian startups that were addressed in Opposition Leader Bill Shorten’s budget reply, perhaps the most important was his call for increased investment in STEM (Science and Technology, Engineering and Mathematics) education, including software development. For Labor, this includes a revamp of the school curriculum so that children and teenagers are learning more about digital technologies, computer science and code. For university students, this would ideally include a HECS debt write-off for 100,000 STEM students after their graduations.

The statements made by Shorten are bold, yes, but the conversation he has sparked is something that needs to be engaged in. We live in a world now where ‘digital’ is a fundamental driver of competitiveness, innovation and productivity. A spokesperson from the Australian Computer Society told Startup Daily this week, “ICT is at the core of virtually every business and this has significant implications for the skills needed in our economy”.

The jobs that are required in this digital world mean that our education system needs to take on a role in preparing today’s students for successful careers in the future. If school curriculum remains the same, the skills gap is going to create a lot of unemployed people across an entire generation.

Both the UK and the US have made a number of changes to their education systems to ensure that there is a much greater focus on STEM subjects. Both countries identified early on that it was graduates from these fields that were launching the most successful high-growth global companies.

Failing to place an emphasis on STEM subjects locally means that Australian citizens will be left behind as jobs begin to move up the supply chain. The future will be a place with less demand for low skill workers and high demand for a digitally proficient workforce with high levels of ICT skills and competencies. According to the Australian Computer Society, these skills will be absolutely necessary in order to give students the best possible chance to join what will be a global digital workforce.

How do we encourage an interest in STEM from an early age?

Yesterday, Scope IT Education, a company that works with schools teaching children how to code announced that it has partnered with Australian Primary Principals Association (APPA). The new service works with principals and stakeholders in schools to deliver a full service ICT education solution via high quality courses and professional engaging instructors. But what sets Scope IT apart from other digital education programs that work within schools or outside of schools is that all the courses have been co-designed by Dr Heather Sharp (PhD) around the Australian School Curriculum, so school principals are not required to make trade-offs with other school activities.

“While others are now talking about and calling for a solution, we were already developing one,” says Frank Lucisano, founder and CEO of ScopeIT Education. “To reach every child in Australia, regardless of school or social situation, we need to be innovative. What we have developed is now being expanded to primary schools Australia-wide. Inquiries are even coming from other institutions as well.”

The Australian Computer Society echoes these sentiments saying that we need a much higher priority on STEM skills within the Australian school system, making learning about digital technologies such as coding and computational thinking mandatory.

In the long term, for this strategy to be a success, we need to also produce teachers that are passionate about technology education and pass this down to students in an engaging way.

“Coding and digital skills go beyond a skill-set for a career in IT,” says Lucisano. “It involves the fundamentals of technological design and applications, incorporating ‘real world’ skill sets like computational thinking, working memory, collaborative problem solving and teamwork. Almost every facet of business today involves technology and computers; a solid foundation in how these technologies are built will improve students’ efficiency and employability. If Australia wants to remain competitive and at the forefront of a globalised world, we must improve the technology skills of future generations, starting now.”

The fall in STEM enrolments needs to be addressed and then reversed 

It is difficult to pinpoint an exact reason as to why the enrolments in STEM related disciplines at a tertiary level have declined over the last ten years. Some speculate that coding has an image problem’. What is clear is the problem needs to be addressed and then reversed. This process will be as much about educating parents about the importance of technology and how it relates to a successful future for their children, in addition to making learning STEM subjects fun and engaging for children.

The most successful economies of the future will be full of people that are beyond just knowing how to consume and use technology; it will be a community of citizens that know how to create and build new products and services based around the new technologies that exist.

I have to agree with the Australian Computer Society’s position that was taken when Shorten delivered his budget reply – STEM skills are, quite simply, the skills our startup ecosystem needs. A major challenge for Australian startups is a lack of professionals with technical abilities. Without this, there is no foundation for a startup ecosystem. We need to improve the participation rates of studying technology and graduation rates so that we can continue to foster innovation and interest for people to join or create their own tech companies.