Economy

Toyota closure reinforces need for innovation to create new jobs

Gavin Lower /

Toyota’s announcement that it will stop making cars in Australia by 2017 adds to the urgency for productivity and new jobs to be created elsewhere in the economy, says one of the leaders of Australia’s start-up sector.

“My personal experience over the years has been that as far as innovation is concerned, necessity is the mother of invention,” Leni Mayo, chairman of Startup Victoria, told StartupSmart.

Toyota’s announcement draws the curtain on Australia’s car manufacturing industry, following earlier announcements that Ford and General Motors Holden were also closing.

Thousands of people working for the companies will lose their jobs and there are fears thousands more are under threat as car component makers consider their futures.

Mayo says while it will be difficult for the workers who lose their jobs and their families, manufacturing as a share of Australia’s economy had been declining for the past 40 years.

“That’s a trend that’s going to continue,” he says, noting that service-related businesses now make up the bulk of Australian jobs.

Mayo says thought must go into what can be done to accelerate the growth of start-ups to fill the gap left by manufacturing.

He points to more innovation in the services space as a key area to promote where companies such as Seek and Carsales.com.au found success.

He also urged politicians to celebrate start-up successes and openly talk about failure, as well as create more visibility and legitimacy around start-up activity and encourage people into pursuing science and technology at university.

“We’ve got a long way to go in Australian compared to the US and Israel with how we feel about failure.”

This article first appeared on StartupSmart.

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