Both sides of politics recognise that innovation and technology entrepreneurship is a priority area for Australia’s future prosperity, and we’ve been told for some time that the policies announced by both sides last year were just the beginning.
We’re now mid-way through the federal election campaign and it’s hard not to notice the absence of much policy in the startup space.
Voters who agree with Bill Shorten and Malcolm Turnbull that innovation and technology need to become key drivers of Australia’s economic future would so far be hard-pressed to decide which party has a better chance of realising that goal.
Both major parties announced a series of measures last year which were greeted warmly by the sector.
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Through the second half of 2015 Labor announced three ‘waves’ of innovation policy, culminating a month before the Coalition launched its own platform – the National Innovation and Science Agenda – in December last year.
Labor has focused on skills and education, and has promised a $500 million startup co-investment fund if it wins in July. It has also said it would improve the current NBN, though exact details aren’t yet clear.
Nevertheless, the intention here has been welcomed warmly by startups and, if fibre-level speeds are on the radar, the results will substantially boost Australia’s emerging digital economy.
Since Malcolm Turnbull became prime minister the Coalition has pivoted strongly towards innovation and startups. Turnbull’s first major policy announcement, in December last year, delivered $1.1 billion for innovation and was widely applauded by the sector. The focus was on tax incentives for startup investors, commercialising research, and boosting Australia’s talent pool. Last week a further $15 million was announced to support incubators and accelerators – a welcome move which will genuinely help startups.
So, startups are on the agenda at this election.
Much of the NISA has not yet come into effect, and should be stacked up against Labor’s plans. But neither party has offered much by way of new, forward-looking announcements.
Elections provide a rare opportunity for political leaders to outline their vision for the nation’s future prosperity and yet, so far, innovation and entrepreneurship hasn’t featured prominently.
The practical reality is that political analysts have probably decided that nuanced policy announcements around startups and innovation don’t necessarily win huge swathes of votes.
But if we’re serious about building a thriving tech startup sector in Australia, we’ll need both more practical policy commitments, and some ambitious, big-picture thinking. Together, that looks less like nuanced policy for a relatively small sector and more like a credible vision for economic transition – something that will grab the attention of voters everywhere.
There’s still plenty to be done, so policy options abound.
At a micro level, more must be done to help our best startups keep growing in Australia.
Red tape still prevents startups offering share options to more than 20 employees each year – not nearly enough for some of our fastest-growing companies. Some of our most promising companies are therefore considering moving offshore to sustain their growth. This could be easily fixed – StartupAUS has put together a detailed proposal, which has been vetted by legal experts.
At a macro level, Australia needs to substantially boost its R&D spending if it wants to measure up to its international competitors. We punch below our weight on overall R&D spending – we are well outside the top 10 countries globally both in terms of absolute R&D expenditure, and as a percentage of GDP.
Boosting the R&D Tax Incentive for early-stage startups would be a highly cost-effective way to increase R&D output, and would make this much-loved program even stronger.
Both parties have done a great job in the last six to 12 months bringing startup and innovation policy to the top of the national agenda.
With four weeks left in the election campaign, keep your eyes peeled for the kind of bold, forward-looking policy that will be needed to make good on the vision to turn innovation and entrepreneurship into a new growth engine for Australia’s economy.