The 2018-19 South Australian Budget has allocated $400,000 to roll out a pilot program trialling a new visa for international startup founders looking to base their operations out of the state.
The trial of the Entrepreneurs Supporting Innovation in SA Pilot Visa will run over four years, with 30 visas allocated in year one, and that number increasing each year after.
Falling under the remit of the Department for Trade, Tourism and Investment, the new visa initiative is something the local startup community has advocated for.
Matt Salier, director of Flinders University’s New Venture Institute in Adelaide, tells StartupSmart the institute has been working with the government on plans for a startup-focused visa in the lead up to the budget’s release this week.
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“They put this on the table early,” he says.
The federal government’s Entrepreneur Visa, introduced in September 2016, attracted criticism from the industry, largely because of the scheme’s requirement to have a minimum of $200,000 in funding from a specified Australian third party, plus the $3670 filing fee, and acceptance waiting times of nine months or more.
The South Australian version requires applicants to have an innovative idea and strategy as to what they plan to do to further that; and to be endorsed by a South Australian government entity.
Applicants must also be under 45, have vocational level English, and meet certain health, character and financial requirements.
It’s not currently clear what the financial requirements are, or whether any apply to the startup itself.
Either way, Salier says this visa has a much lower barrier to entry than the federal scheme, and it focuses on startups’ ability to “demonstrate high growth potential”.
For South Australia, overseas startups will bring expertise and “access to global markets”, Salier says.
“There’s an opportunity for better culture and business connections for our businesses to sell into their markets.”
For the applicants, the visa would only be “part of a suite of opportunities” for startups thinking of heading to South Australia, he says.
There is a “clear sectoral focus” that is likely to draw a certain kind of startup to the state, with opportunities in the defence supply chain and the emerging space tech industry. Salier also noted connections could be drawn with South Australia’s international student programs, which he says are “a massive driver of the economy here”.
If entrepreneurial-minded international students see an opportunity to start a business in the state, they may well want to come back.
“There starts to be some interesting synergies there,” he says.
This alignment could help lead to a “high-tech high-growth” ecosystem, bringing entrepreneurs to Adelaide “as opposed to more crowded, more expensive east coast locations”, Salier adds.
“It’s a small allocation, but it does have the potential to move the needle,” he says.
South Australian Minister for Trade, Tourism and Investment David Ridgway said in a statement the new visa is intended to “build upon the local ecosystem”.
“The new visa will drive entrepreneurialism and innovation in our state, with the future potential to employ South Australians,” he said.
The state budget has also committed $27.9 million over four years to a research, commercialisation and startup fund, to promote startup growth. Some of this funding is coming through the removal of South Australia’s startup support agency TechinSA, and other existing grant programs.
The state government is shifting the focus to collaboration between researchers and universities, commercialising new products and attracting research infrastructure to the state.
It has also committed $43.9 million to the ongoing development of Lot Fourteen, a precinct on the site of the former Royal Adelaide Hospital, to establish an innovation, incubation and startup growth hub.
South Australia’s recently appointed chief entrepreneur Jim Whalley and the new entrepreneurship advisory board will also be based in the new hub.
The changes are evolutionary, Salier says, and it will be important to make sure the new structures can work with Adelaide’s existing assets, “making sure all those elements complement and amplify,” he says.
New Ventures Institute has supported “a significant number” of startups that have been recipients of the grants and support structures that are now being rolled back, Salier says.
“The money is one thing,” he adds, but it will be more important to make sure “the level of support is actually maintained”.