Has the Government done enough to stimulate Innovation in Australia?

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The Turnbull Government has pledged to support tech companies, and in particular startups. The National Innovation Agenda had been well received with the possibilities that it presented. However, the governments announcement recently to scrap the 457 visa scheme and to tighten rules for working visas may be casting uncertainty over this sector.

Australia’s oldest and most successful tech incubator, Cicada has advised that roughly a third of their startups have people on 457s, and about 70% of those companies that have scaled up are also utilising talent on 457s. 

Petra Andren, the chief executive of Cicada was quoted in InnovationAus saying “These are highly, highly skilled people. They are engineers and chemists and mathematicians. They are people we are not finding in Australia,” she said. “We know that universities are not churning out large numbers of people in these areas, even if there is a lot of activity going in the space for our unis to play catchup.”

The NSW State Government plans to create an innovation precinct similar to Silicon Valley has hit a road block, with two significant partners pulling out, one of which was Google. Google cited lack of transport for their decision not to relocate to White Bay. This puts increasing pressure on the government to either find other high profile tenants or spend further money on building suitable transport infrastructure.

It has announced however, that in the short term it will deliver a 15,000 square meter hub within the CBD. The Sydney Startup Hub that is planned for the middle of this year will be a bridging measure till the innovation precinct White Bay can be completed, which at this stage will be at least 5 years. The Sydney Startup Hub is only a temporary measure, as it isn’t viable to support this through tax payers money long term.

In late 2016 the NSW Government announced a suite of start up support programs in line with its long term plan to accelerate jobs growth. The $190 million jobs for NSW Fund is aimed at helping the state reach its goal of creating one million new jobs by 2036. However, the Jobs for the Future report found that NSW has fallen behind other states within the startup ecosystem. Both Queensland and Victoria are also focusing on this area. Jobs for NSW chief executive Karen Borg says “Our goal is to partner rather than just be a part of government that seems to have a pocket”. “NSW right now is very focused on the job aspect – we’re interested in the outcomes,” she says.

What is interesting, is maybe the real issue is a skills shortage. The number of people taking up information and communications technology degrees have halved over the last decade. Google are planning a major recruitment attack on the market and this could mean that the Government themselves have a shortage in this area as they can’t compete with the salaries being offered by companies such as Google. Richard Buckland from the University of New South Wales has confirmed, ”We don't have enough students, that's the real problem," he said. "We're training good ones, but we just don't have enough. "There's a big demand and not much supply.”

So perhaps the Government should be providing encouragement and incentives to enroll in an IT degree! Because, if they are going to restrict the talent coming into Australia, and we have a known shortage of talent coming through our Universities there is no point in helping tech companies grow and develop if they don’t have access to skilled workers.

What are your thoughts? 

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About Author

Michael Derin
Michael Derin

Michael Derin, Azure Group's Founding Partner and Chairman has over 28 years’ experience as a qualified Chartered Accountant within the business and commercial sectors. Michael works across our Technology, Corporate Advisory and CFO operations, managing highly complex projects to success.

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