Australia continues to under-invest in entrepreneurship within its startup ecosystem, according to the lt;igt;Crossroads 2015 reportlt;/igt; released on Tuesday by StartupAUS.
Despite some positive changes in the last 12 months, Australia still records some of the lowest rates of startup formation and venture capital investment for a developed nation, the report shows.
Most notably, the report found a dramatic fall in government funding and provisioning to support startups, following the abolishment of the Innovation Investment Fund in last years’ Federal Budget.
Meanwhile, the government-run Entrepreneurs’ Infrastructure Program was only able to provide half the funding of startups than its predecessor, Commercialisation Australia.
The report also shows how Australia is lagging when it comes to funding and coherent innovation strategy compared to regional neighbours and global benchmarks.
While China, South Korea and the UK have recently announced multi-billion dollar initiatives, and New Zealand is extending its network of government-supported startup incubators, innovation precincts and funding programs, Australia has reduced its investment in knowledge economy initiatives, the report said.
China recently announced an $8.3 billion seed-stage National Venture Capital Fund, South Korea has implemented a $4 billion Creative Economy initiative, while the UK is delivering a multi-billion pound suite of pro-startup programs.
“Over the past 12 months, we have seen some great Australian tech startups emerge and begin to make their mark globally, but Australia is actually falling behind other countries when it comes to rates of tech company formation and growth,” said Peter Bradd, StartupAUS director and entrepreneur-in-residence at Fusion Labs.
“Our future economy depends on our learning how to mine our knowledge and commercialise that resource, just as much as it depends on finding and extracting oil and gas or mining coal. Other developed countries are making far greater investments in their startup ecosystems.
“Australia’s policy-makers need to invest in finding, supporting and growing the tech startups today that can become the pillars of Australia’s economy tomorrow.”
StartupAUS included a series of recommendations in the report for building a better community of technology entrepreneurship in Australia, while spurring prosperity and competitiveness.
The not-for-profit has advised the government to establish a national innovation agency, to create a national network of entrepreneurship centres, and to increase government’s provision of matching capital to support startups.