Australian start-ups tipped to thrive in low-carbon future

Start-ups are set to thrive rather than flounder under a carbon tax, with new businesses having an opportunity to drive new industries, innovation and capabilities under the carbon pricing regime, according to a new report.

The report, titled Green Chrysalis: Small and Medium Sized Enterprises – Innovation and Transformation Towards Australia’s Low Carbon Economy, was funded by the Australian Business Foundation.

The research was carried out by the Institute for Sustainable Futures (ISF) at the University of Technology in Sydney.

The study, which was conducted over 12 months, involved a literature review, interviews with key experts in the field, workshops and case studies of SMEs.

According to ISF director Stuart White, the debate over Australia’s response to climate change –and reducing energy consumption – has been limited because of its focus on the big end of town.

“In terms of our national economic output and workforce employment, small and medium-sized enterprises comprise 46% and 42% respectively,” Professor White says.

“They have a major role to play in addressing the national climate change challenge and in helping to drive new industries, innovation and capabilities for Australia.”

“We found that those small businesses that have pursued low-carbon strategies had implemented a range of innovative responses.”

Professor White says in addition to technical aspects, innovation is also apparent in “soft” aspects such as management and marketing.

According to the report, many SMEs that have adapted to or harnessed the conditions of the low-carbon economy have been able to “create opportunities for competitive advantage”.

The report provides recommendations for governments, industry associations, universities and SMEs regarding the support SMEs need to innovate in a lower carbon working environment.

“Our research found that the opportunities of a low-carbon economy are akin to a new green ‘chrysalis’ – a space where innovative transformations can, and are, taking place,” White says.

The news comes on the back of an announcement by the consumer watchdog, which has warned the building industry it intends to closely scrutinise any price rises attributed to the carbon tax.

Rod Sims, chairman of the Australian Competition and Consumer Commission, told The Sydney Morning Herald some of the initial forecasts put out by the industry were overstated.

“[Building] is an industry that is said to be fairly heavily affected by the carbon price,” Sims conceded.

“But I just want to make sure consumers are aware that it’ll be probably a lot less affected than first appears.”

Producers of raw materials such as steel, cement, aluminium and glass will initially receive 94.5% of their carbon permits free from the government.

Treasury has estimated that under the carbon tax, household electricity costs will rise by about 10%, while the overall impact on the cost of living will be about 0.7%.