Australia has been ranked number one in the world for the time it takes to start a business, although the country has been marked down for its approach to ICT and the availability of new technologies.
The Global Information Technology Report 2010-2011, compiled by the World Economic Forum and international business school INSEAD, reveals Australia is considered a top place to start up.
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According to the report, Australia and New Zealand offers the least hurdles to start a business, topping the list on time and procedures.
“The country’s notable competitive advantage is the quality of the general environment, in particular the political and regulatory framework,” the report says.
Australia was ranked seventh overall for its political and regulatory framework, and 13th overall for the quality of its general environment.
The report shows Australia was ranked 12th on the ease of access to venture capital for risky projects, narrowly beating the United States, although high tax is seen as an impediment.
Peter Strong, executive director of the Council of Small Business of Australia, says it’s relatively easy to start-up a business anywhere, undermining Australia’s performance in this regard.
“But with regard to the claim about the ease of accessing venture capital, I’d like to see some examples of that. The other countries must have no access to venture capital at all,” he says.
Viki Forrest, chief executive of ANZA Technology Network, says the shift to internet-based operations means many business ventures only require a small sum of venture capital.
Forrest cites Australian group-buying site Spreets as an example, which cost less than $10,000 to start up yet was recently acquired by Yahoo!7 for $40 million.
Mick Liubinskas, co-founder of Australian incubator Pollenizer, which picked up Spreets, says the overall landscape in Australia is starting to change as companies choose to venture to the US much later, or not at all.
“The old model was to test your idea in Australia and then get it to the US as soon as possible… But a lot of Australian start-ups are now avoiding the US because it is so competitive,” he says.
Strong, however, is also critical of Australia’s rating for its political and regulatory framework.
“The seventh spot is not very good given the state of our economy and how much money we put into our regulators. We should at least be in the top two, if not number one,” he says.
Strong adds: “The Tax Office is very good in the way they regulate tax when it comes to small business.”
“They show a lot of compassion because they understand that no one person could ever get it completely right.”
Strong’s comments are in contrast to recent reports from the Australian Taxation Office, which has repeatedly declared a crackdown on small businesses rorting the system.
Meanwhile, the report reveals Australia is ranked in the 17th spot with regard to network readiness.
This particular index is designed to gauge how favourable national environments are to ICT development, and the interest in, and use of, technology by government, business and citizens.
Australia was ranked behind the US, the UK, Canada, Singapore and Taiwan, and was only one spot ahead of New Zealand. Australia also lagged in 22nd spot on the availability of the latest technologies.
Strong says the National Broadband Network should see Australia advance with regard to network readiness and the availability of new technologies.