People and institutional permafrost holding back Australian entrepreneurship

Innovators panel: Accelerating and incubating that next big idea

Fostering a culture of innovation and entrepreneurship is a critical element of a thriving Australian business technology industry.

 Yet what does it take to create an environment that attracts and nurtures start-up founders? Seven entrepreneurial minded spirits took the stage at CeBIT Australia 2017 under the moderation of Dr Charles Day, CEO at the Office of Innovation and Science Australia (OISA) to discuss what it takes to accelerate that next big idea.

The role of accelerators in fostering innovation

According to the panelists, Australia has come a long way when it comes to helping start-ups get their first leg up. This was mostly due to the fairly recent proliferation of accelerators that speed up the process from idea to product.

People and institutional permafrost holding back Australian entrepreneurship

“The growth of accelerators in Australia has been fantastic,” said Mike Zimmerman, Managing Director at Bondi Ventures. “They play a really important role, not just in getting businesses off the ground, but also evangelising the start-up life in universities. What we now need to get to is a bit more vertical focus on niches such as fintech and energy.”

Expert360 Co-Founder and CEO, Bridget Loudon, added that accelerators give people a place to go when leaving their corporate careers and therefore make the transition a little bit easier than it used to be.

Solving the people problem

One theme that continued to come up as a major challenge over the course of the discussion was the struggle to attract and retain talent to a start-up. “We have been looking for a product developer for eight month and are finding it hard to fill the position,” Loudon reported. “This issue can seriously hold back the growth of a business.”

The panelists favoured a two-fold approach to solving the people problem in the Australian start-up sector.

“There is a predicted deficit of folks coming out of uni in relevant fields - and the gap is getting bigger,” stated Brett Adam, Managing Director and VP Engineering at Zendesk. “We need to address this issue and work with educational institutions to do a better job in framing career paths in tech so that we have more young people coming into the industry.”

However that approach didn’t solve the immediate need to fill vacant positions. “The recent changes to the 457 visa have made it a lot harder to fill roles with talent from overseas," Adam explained. “There is now no path to residency which makes the proposition of moving here a lot less attractive.”

This problem did not exist for start-ups in Singapore according to Claire Mula, Co-Founder and Executive Director at Sprooki. “Singapore is a tiny country with a very limited talent pool. We never had any issues bringing in talent from outside. The visa process there is very favourable to entrepreneurship.”

Adjusting our attitude to risk

Another thing that needed to shift to create a better ecosystem for start-ups in Australia is our attitude to risk at both the individual and institutional level.

“When you talk to people about risk in Australia they tend to only see the downside,” observed Mark Sowerby Chief Entrepreneur at Advance Queensland. “Properly assessing risk is about comparing the upside to the downside. A lot of decision-makers have completely lost their judgement on this.”

This was true for investors as well as people making supplier decisions in government and large organisations. “Australia has a significant problem with institutional permafrost. It’s not procurement that’s the problem, it’s the person that doesn’t want to take the risk to work with a start-up,” so Sowerby. “No one ever got fired for hiring IBM - even though in some case maybe they should have.”

How to launch a start-up