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Are our government initiatives enough to help young Australian startups?

Australia’s economy has stood strong for the better of three decades- largely unaffected by any major recessions and boasts 13th place in terms of the worlds largest economies, including 9th in the world for highest per-capita income. 

The tech and innovation sectors are also growing at a rapid pace. So, if you’re thinking of beginning a Start-Up, there’s money to be had…but from where?

There’s no question that Australia has a robust economy and with that comes a healthy ecosystem for budding companies trying to make their mark in the start-up community. As is important with any strong, developed economy, the Government plays a pivotal role in propping up and investing in promising young start-ups.

Photo credit anz.businesschief.com

A healthy startup ecosystem is vital to any economy’s innovation and tech community, with many countries around the world investing vast amounts of money to ensure they are at the forefront of the industry. But with different countries prioritising start-up and innovation sector growth in different ways, the unique and varying approaches taken by many countries have yielded some interesting results.

So, let’s see what’s on offer!

Australia

Fast becoming one of the most vibrant and exciting start-up ecosystems in Oceania, Australia currently ranks 10th on the list of most Start-up’s per country, with many incentives which are aimed at providing new start-up companies with the chance to establish themselves and compete in an evolving marketplace.

Chaired by former Federal Govt. Treasurer under the Howard administration- Peter Costello, The Future Fund is a government-sponsored initiative which began in 2006 and concentrates on generating “high, risk-adjusted returns over the long-term, operating independently from the Government and tailoring the management of each fund to its unique investment mandate”.  It is a new and exciting federal government plan to provide not just funding but additional 2nd and 3rd round financial support to beginning and growing startups.

Photo credit launchvic.org

LaunchVIC is a relatively new initiative, which began in 2016 and championed by the Victorian Govt. to provide entrepreneurs with greater opportunities in the start-up scene, as well as providing additional funding for those already established in the start-up environment.

LaunchVIC also provides a solid support network for incubators and founders to ensure they have the best tools at their disposal to compete in the global market.

As well, state-specific programs like LaunchVIC, the Federal govt. also provides for an extensive list of special start-up grants, aimed at specialised ventures, and has recently introduced new laws governing insolvency laws to improve and greater encourage entrepreneurship. The people at LaunchVic have also recently opened their 7th round funding application process-  the brainchild of Tharamba Bugheen, Head of the Victorian Aboriginal Business strategy, it is a program which will focus on increasing diversity and inclusion in the startup community by encouraging young Indigenous entrepreneurs to apply for government funding.

The Hon. Craig Laundy MP introduced sweeping changes to the Incubator Support Initiative in late 2017, including an increased grant of up to 65% for new and existing incubators working in regional areas of Australia as well as a maximum grant of $100,000 for the Expert In Residence project– a project aimed at providing young founders and entrepreneurs mentorship. 

Exciting things are happening around Australia too!

The newly elected Liberal government in South Australia are pushing for skilled visas for founders to base their companies in Adelaide, the State’s capital, in a statewide push to increase activity and encourage investment and funding for new startups. As well, the NSW State Government announced plans to deliver 1 million jobs by 2036 through propping up startups and accelerator schemes.

Another exciting new government scheme helping young founders and start-ups is the Entrepreneurs Programme– which began in 2014 as a result of the amalgamation of two separate funding bodies;  Commercialisation Australia and the Federal Investment Fund. The programme offers entrepreneurs grants through several business growth grants as well as providing expert advice and funding support to incubators.

The many support programmes and funding opportunities offered by the Australian Federal and State governments are no doubt the envy of many burgeoning startups and founders around the world. However, there are many companies which provide generous funding and competitive accelerator programs…

Let’s take a look at some key players…

Singapore

Singapore has long been an impressive destination for new start-ups, with a highly pro-business government, it is also situated in a highly profitable geographic location, making it a hub for international business and commercial activity, ranking 15th in of no. of startups per country.

The Singaporean Government encourages new start-ups by allowing for free taxation for the first 3 years of the business, provided that 30% of its shareholders are based in Singapore, and up to the amount of $1million in gross revenue. From there, Singaporean entrepreneurs are then taxed at a lower rate, through the ‘Partial Tax Exemption Scheme’.

Photo credit dailyscene.com

The Start-Up SG grant-aided by the Singaporean Government and headed by SG Fund aims to cater to every possible incarnation of a start-up idea and environment and is bracketed under six separate pillars, including; Accelerating growth, Talent application, Loans, Mentorship, Deep Tech and Equity.

The StartUp SG scheme is an umbrella scheme, which aims to nurture all aspects of the beginning and growth stages of new startups.

Startups in Singapore have access to significant government funding through more than 10 funding bodies, including SPRING Startup Enterprise Development Scheme, the Early Stage Venture Fund Scheme, the Technology Incubation Scheme, and the Sector-Specific Accelerator Programme.

The United Kingdom

The UK is home to one of the most competitive start-up markets in the world, ranking 3rd globally for the number of startups per country, and that should come as no surprise, as the UK also ranks 5th in the world for Government investment in new startups programs and initiatives. 

As well as announcing the government’s new Start-up Loans scheme, offering £25,000 for new business ideas, Prime Minister Theresa May also pledged $2 Billion of new investment by 2020 in deep tech and new startup companies based in the UK. 

The government body Innovate UK has begun to hold funding competitions for businesses and research organisations, as well as offering grants to anyone working on new tech and providing mentoring and support for emerging startups.

Photo credit derivitech.com

The Tech.London initiative, which began in the early 2000s’, aimed at improving London’s startup culture and was charged with bringing London tech into the 21st century. Since then it has become a valuable source of information for young founders and entrepreneurs, providing tips on mentorship programs, jobs boards and funding knowledge, as well as advice on how to set up in the city. Sponsored by IBM, Tech.London is a pro great program which has the full backing of the Lord Mayor of London and provides new startups with vital industry knowledge to begin a successful business.

Is it enough?

These are just examples of three countries, there are so many more interesting and innovative government approaches and initiatives that young startups can compete in a competitive global industry.

Australian startup and funding initiatives are providing an even more robust and healthy community. Combined with a thriving economy, there are promising signs that Australia can become a global leader, providing the right environment is created to foster innovative and successful start-up companies and nurture the newest, most innovative ideas.

But is it doing enough? Following the Turnbull leadership take-over of the Liberal party in 2015,  he boasted of the federal government’s commitment to tech and innovation sectors. With a federal budget looming, we will have to wait and see if Australia’s startup community can expect even more funding and support.

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Are our government initiatives enough to help young Australian startups?
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$100,000 Scholarship Fund launches to help close the gap for women in tech