Economy, Startup News & Analysis

Australia’s innovation immigration policy, where the bloody hell are you?

Paul Naphtali /

Eleven years ago Lara Bingle strode onto screens asking, “Where the bloody hell are you?”

This uniquely Australian tourism campaign embodied all that was great about this country — beautiful coastlines, friendly people, great food, relaxation and escape. This was just the latest incarnation of a well funded, highly managed campaign to bring Brand Australia to the world, following in the footsteps of Hoges and preceding Hemsworth as the face of this quaint, much-loved country.

And boy was it effective. Not only did it turn tourism into one of the country’s largest exports, it also created and grew the legend of Australia. People love Australia and Australians.

At a time when the UK is dealing with Brexit and the US with widespread political and social upheavals, as well as rampant gun crime, many of their best and brightest are open to new options.

Australia is far from a perfect country (our treatment of Australia’s first people and refugees spring to mind whenever I write about what a great country this is). But the global brand remains a strong and positive one, and we should be doubling down on Brand Australia. We should be declaring ourselves open for business, a haven for anyone with an idea and a passion to create, and a mecca for entrepreneurs and dreamers.

Ecosystems are built on people with drive and a vision. And we always need more of them.

Moreover, ecosystems are often built on migrants or their children. Larry and Sergei, Elon, Steve Jobs’ father, Bezos’ father, Jerry Yang. In Australia, the recent Startup Muster survey found a 37% of entrepreneurs were immigrants.

So why is it, exactly the time when we have the most to gain from throwing our doors open to the next generation of entrepreneurs and team members, are we making it so hard?

Why are we building a protectionist platform rather than using the time to attract the talent required to supercharge the ecosystem?

Perhaps we simply don’t understand the strength of Brand Australia. From my own experience, when I left Silicon Valley a few years back I imagined I would be laughed at for leaving the centre of the known universe (as far as they, or I, were concerned) for this rocky outpost at the end of the world.

Instead, the overwhelming response was, “oh gosh, you’re so lucky.”

We are lucky. We’re a long way from everywhere and yet have one of the most coveted lifestyles globally. What we lack in innovation talent density (for now), we make up for with a safe, prosperous and mostly welcoming community in a country that looks like a tourism ad.

We could easily convince the world Australia is the number one immigration destination for entrepreneurs and innovation workers. Our entrepreneurs already know this — and can tell you selling Australia isn’t the hard part of attracting international talent. It’s navigating the labyrinthine and unwelcoming immigration process.

This is exactly what’s wrong with Australia’s approach to innovation policy making. We urgently need to talk about this and make changes, specifically to the approach to 457 visas, students and the (mostly excellent) R&D grants.

Any further, stunningly short-sighted changes to curtail 457 visas and skilled immigration would cause existential issues for our most promising software companies. It would kneecap those companies that have begun to grow, and their demand for expert talent exceeds the local market while propelling local community to new heights.

Read more: Government urged to reform Entrepreneur Visa after receiving only one applicant in over 12 months

The tech community has been advocating the need for immigration reform for years, but especially vigorously over the last 18 or so months after the 2016 changes.

“Tech is a rapidly changing sector, meaning the skills that technology businesses need to draw on also change rapidly,” Atlassian co-founder Scott Farquhar recently wrote.

“Access to a high quality, dynamic skilled visa system is therefore of fundamental importance in building a fast-growing company in this space. So when the skilled migration system was overhauled earlier this year, it came as a real blow for tech companies across the country. Visas have been slashed as a result of the changes, with less than half as many visas being issued in quarter three this year as the same period in 2016.”

While some argue the practical changes to the revised visa scheme were minimal, the message was clear: “Australia is a tough place to move to, we don’t really want you”.

Imagine if the message from the Australian Prime Minister had been:

“Engineers and entrepreneurs of the world, we welcome you. Come create the future here — our natural resources, and I talk of our creative, well educated, good natured and hard working people, are at your disposal. Our government will do all we can to help you realise your dreams, achieve your ambitions, and change the world.”

It’s not just the 457s. The way we think about students is also deeply flawed. Once an international student has completed her degree, at one of the best universities in the world, and after they’ve established networks, when they are perfectly placed to launch or join Australian tech companies, we push them straight back out.

With thousands of these students graduating from STEM degrees and the need for Australian technology companies to be global from day one, we’re wasting our chance to tap into this influx of smart, driven young people every year.

Finally, why are we not further expanding our grants programmes rather than limiting them?

Our R&D grants are amongst the best in the world and have been a factor in retaining and attracting high-quality engineering teams to the country. So I find it baffling that there is a crackdown on the grants, regular intense audits, and strong rhetoric from Innovation Australia that grants will be tougher to get.

These grants are the lifeblood of so many innovative Australian businesses. They give founders the ability to keep their fledgeling businesses alive a little longer until they bring in enough revenue to thrive or go on to raise capital. From a VC point of view, it’s helpful that the R&D tax back enables the founders to delay and minimise the amount of external capital they require.

Not only is there a practical impact of the R&D grant squeeze in reducing cash supply — which make no mistake will kill startups — there is yet another message that Australia simply does not want or value the innovation community and those within it.

If Australia is to continue to be the lucky country we have to be smarter. And braver. Our next generation of wealth will not come from digging shit out of the ground and building shit on top of it. Wealth will come from innovation and creativity.

For this we need people. So let’s bring them here, make them welcome, incentivise them to build, create and develop, and reward their ingenuity and effort. We really are so bloody lucky to be in Australia — let’s extend that luck to others. And in doing so, we might just be lucky enough to maintain all that we love about this great country.

This article was originally published on Medium.

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Paul Naphtali

Paul Naphtali is an Australian investor and the co-founder of venture capital firm, Rampersand Fund.

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  • Stuart51

    Best thing Australia could do to encourage innovation – domestic and imports – would be to implement a non destructive patent system.

    Check out our ‘One Dollar Patent System’ at http://www.IPROAG.org.

    Feedback required! Especially from inventors!

    Stuart.
    Intellectual Property Rightful Owners Action Group
    [email protected]

  • Margit Alm

    If you want innovation and entrepreneurs look at our education system for our own kids rather than watering down the system for paying overseas students, as we do now. Overseas students need to return to their home as most of them come from third world and emerging countries where they are needed more than we need them here. We can train our own, that would in itself be some innovation and entrepreneurship, as well as being intrepid.

  • JLMD

    While the opinions stated are interesting, there is simply “too much talk” in Australia. Just more jaw boning. When will people really get it. Why do the French have easy entrepreneur access to France? Why do the Singaporeans (I live in Singapore) pump huge amounts of money into start-up development via Spring and other bodies? Why does little old Estonia make it easy to set up companies, bank accounts and ePassports so that you can grow from Europe? It is time that we just “stopped talking and started spending”. Australia is falling behind in rankings on so many things and it seems only when you are outside the country that you notice it. We cannot afford a long game, that much, with putting the bulk of funds into Universities etc. We need money spent now, to commercialise smart ideas. The Chinese are seriously going to kill us commercially. They understand and are doing entrepreneurship on an industrial scale that has never been seen before. Australians just don’t see it and our politicians don’t give a rats. If we play safe for much longer, we are gone. I personally think that point has just about been past. I don’t intend to come back as a consequence.

  • wormseye

    You can’t ‘invent’ entrepreneurs by instituting some kind of mysterious process to encourage them. Anyone who has enough go in them to form a start-up will do it anyway. The biggest problem is that it’s hard work – most people are basically idle and will settle for a boring blah job where they don’t have to exert themselves too much.