The four key areas the innovation statement must address

The government’s innovation statement is due out next week and high on my wish list is for it to recognise and embrace the pipeline approach to boost startups and innovation in Australia.

It’s no secret that for some time I have been pushing for our nation’s leaders to embrace a more system-wide approach in order to more effectively shape the economy of the future.

The pipeline approach is a multi-layered process behind growing a simple idea into a global startup success story.

It starts in the classrooms of our primary and secondary schools; it involves strong enthusiasm from the university and TAFE sectors; it entails unwavering community support for the entrepreneurial leaders of the tomorrow who will need our support for the lean times and the failures ahead of them; and perhaps most importantly, it needs to be backed by supportive government policy.

We have seen some solid activity and efforts by both state and federal governments and many industry sectors in the last six months – the wheels are certainly in motion for polishing up our pipeline and achieving a thriving innovation environment.

In saying this, the four key things I’d like to see addressed in the upcoming innovation statement are:

1. More tech grads with entrepreneurial skills

A recent report produced by Spike Innovation and commissioned by the Office of the Chief Scientist identified that the best entrepreneurial cultures are equipped with vibrant university sectors that encourage and foster entrepreneurship.

Getting the university and TAFE sectors to churn out large numbers of graduates with sophisticated technical skills is only half the battle; they need to be encouraging ‘entrepreneurial mongrel’ in these students, so that they leave with the attitude and dogged mindset that they can build their own startup.

We need to see universities incorporating valid entrepreneurship courses as integral parts of the curriculum delivered by external, experienced entrepreneurs who have “been there, done that”.

2. More and better funded accelerators

Accelerators are hotbeds of innovation and creativity, and collectively they create a vibrant and flourishing close-knit startup ecosystem.

We require governments and industry to stand firmly behind accelerators with an aim of creating many more. There are lots of ways in which governments and industry can do this, including direct investment into these accelerators – or the entrepreneurs within them.

It is important to acknowledge the potential gains of prioritising these goldmines and commit to fostering their ongoing growth and success. 

It is the companies that have grown from non-traditional research-centric efforts that are leading our way in the world – we need to back more of what has worked.

3. Support for community initiatives

We must continue to recognise, foster and grow the vibrant pay-it-forward ecosystems in Australia – community programs like CoderDojo, the tech startup focused co-working spaces such as River City Labs, Fishburners, York Butter Factory, Majoran and SpaceCubed, startup weekend events and the many other pitch initiatives – that go such a long way in transforming our social fabric to be inclusive of the startup spirit and mission.

Very importantly these efforts are being run in the community now; they are working to increase activity and ‘clue’ in the sector and, for the most part, are being run by the community and private industry. Let’s help them out – don’t raise new efforts that compete against them, but back what has been proven to work.

4. Access to capital and tax breaks for early-stage investors

Having access to strong streams of capital is a rate-determining step for all startups – without it they struggle to get through the lean times no matter how good their idea is.

We need more early-stage tax incentives to grow the numbers of venture capitalists and angel investors investing in these early-stage startups. Programs such as Early Stage Venture Capital Limited Partnerships (ESVCLP) are strong models – but we could also be thinking about reducing the minimum amount required for a venture capital fund under ESVLCP to become registered in Australia.

Recent speculation regarding crowdsourced equity funding, if realised responsibly, will also lead to more capital being made available.

There are also other areas not touched on above – visa reform for investors, inbound entrepreneurs and skilled talent, as well as inbound and outbound support programs for our best that leave for foreign shores to test their mettle – we want them to not only try but then return with more skills, experience and a larger network.

So, for this overall approach to work, the government needs to be addressing each of the elements of the pipeline simultaneously, not just choosing one or two to focus on. 

Like startups – who, as a community, try lots of different things, we need to be prepared to try lots of different things to help – right across the pipeline we need to provide assistance.

This is how we will create a startup ecosystem that is continually pumping out world-class tech startups, a startup ecosystem that is second to none.

Steve Baxter is a prominent Australian investor and entrepreneur and a judge on Shark Tank Australia.