The Australian startup community has reacted in horror to the too-close to call election, with fears over how an impending hung parliament may affect policies surrounding innovation.
The election is still yet to be decided, with the likely result being either a Coalition government with a tiny majority or another hung parliament.
According to MoneyPlace founder Stuart Stoyan, either possibility is a disaster for the startup sector.
“The election ‘non-result’ is a debacle and the worst possible outcome for startups,” Stoyan says.
“For the past nine months we’ve been working with the government on the importance of the innovation agenda, which is now at risk of being lost to political instability and infighting.”
The startup community is also set to lose one of its biggest political allies, with assistant minister for innovation Wyatt Roy in danger of losing his seat.
“Three years of chaos”
Startup investor and advisor Nicole Williamson says the inevitable uncertainty associated with a hung parliament will have dire consequences for the startup sector.
“Business hates uncertainty and it looks like we could be in for three years of chaos,” Williamson tells StartupSmart.
“Startups were hardly mentioned at all during the campaign and the biggest danger now is that with three years of chaos ahead, our sector could drop far down the agenda again.”
With the government now likely needing to garner the favour of a range of independents, Stoyan says this could put the bipartisanship surrounding innovation policies at risk.
“The startup community is deeply concerned that politicians will take their eye off the ball and focus on internal politics and blame rather than getting on with it and supporting growth and innovation,” he says.
“This throws the nation into even more turmoil as whoever ends up forming government will need to make significant concessions to get anything done.
“This will create further instability and ineffectiveness as the government will be focused on meeting the needs of special interest groups rather than the critical issue of growing the economy.”
Quantify Technology founder Mark Lapins agrees, saying it is likely the startup community will now see “another few years of directionless instability with no clear mandate for either side of politics”.
“A hung parliament is not a recipe for good government, with poor decision-making and broken promises not what we were hoping for as the outcome of this election,” Lapins says.
“Policy makers will have to work hard to not only win back the confidence of the Australian public but also make the changes needed to ensure that Australia is a leader in innovation and a country that promotes and supports startups and innovative businesses.”
For Kikka Capital chief executive David Brennan, the result so far is the worst case scenario.
“Before the election there was a cry out within the business community for stability. This result has delivered the opposite,” Brennan says.
“This non-result is a debacle that puts startups and small business in an uncertain position, especially as the global landscape is changing rapidly.”
But Rampersand analyst Eloise Watson says startups should be focusing their attention on running a business rather than the volatile world of politics.
“While uncertainty is always bad, good founders are adept at managing uncertainty so this should be business as usual,” Watson tells StartupSmart.
“Any startup or commentator worrying about the situation should just stop thinking about it and get on with building a great business.”
Finding common ground
StartupAUS chief executive Alex McCauley is more optimistic, saying that broader innovation policies could garner broad support in a diverse parliament.
“Whatever its final shape, it’s clear this parliament will need to find areas of broad common consensus,” McCauley says.
“Startups and innovation are a core economic priority supported by both major parties as well as the Greens and Nick Xenophon team.
“Our expectation is that an ambitious startup agenda will continue to be pursued by all the key players. In a difficult period, this can be an area of strength for this new parliament.”
The poor result for the government may also be the result of its failure to follow through with its innovation promises, angel investor Shelli Trung says.
“Clearly the innovation community is not happy with all the talking and little action,” Trung tells StartupSmart.
“This is an obvious tell-tale sign showing a complete lack of understanding of the sector and how we communicate. The startup community operates lean and has a ‘get shit done’ attitude.
“It’s time the government started learning those lessons.”
Now is the time that the startup community needs to come together and push its own cause, innovation consultant Anne-Marie Elias says.
“Now is a good time for the ecosystem to consolidate and put out a manifesto of not only how you can support startups but how to actually solve some of our biggest social challenges,” Elias tells StartupSmart.
“The time for special snowflake groups is over – it’s time we come together and learn from the mistakes of Turnbull.
“This is such a lesson for us as an ecosystem too. We must take people with us, the more exclusive we become the more we lose.”
Stoyan says that if Australia was a startup, investors would be getting very worried.
“We have had five prime ministers in the past six years, with Bill Shorten potentially making that six,” he says.
“If the Australian government was a startup it would be looking at its sixth CEO, umpteenth pivot and the loss of trust and confidence from its customer base.
“Maybe Elon Musk has it right and we should all just move to Mars.”