The recent PwC report Startup Economy – How to support tech startups and support Australian innovation focused, naturally enough, on the barriers to developing a Silicon Valley like business community in Australia.
Unlike most coverage of the report, The Economist raised an interesting point from the findings, that entrepreneurial Australians are far more likely to start up businesses than many other nations.
On one level this isn’t suprising as starting a business in Australia is easy compared to many other countries with the World Bank’s Doing Business survey rating the country second after New Zealand for the ease of setting up an enterprise.
Interestingly though, the number of Australians setting up their own businesses is falling reports Smart Company, citing the Productivity Commission’s Forms of Work in Australia report.
The Productivity Commission speculates this might be because the mining boom is encouraging workers to take resource contracts rather than set up their own businesses.
No doubt there’s some truth there, as much of the nation’s investment has been directed into the mines and associated infrastructure in recent years however there’s probably some more mundane reasons.
Top of the list would be the nation’s property obsession; it’s difficult to service a massive mortgage while running your own business.
Fifty years of mainly increasing property prices has groomed Australians into believing that having a steady job and a brace of investment properties is a much easier path to success than taking a risk with your own business.
Added to that is the increasing hostility towards businesses. As the nanny state grows, regulations that make it harder for business multiply, the latest example being a Sydney council that wants to charge professional dog walkers for using parks.
Overwhelmingly these petty regulations hurt those starting new businesses rather than bigger corporations.
The good news though is that people still want to start their own businesses. In an economy that’s increasingly concentrated in fewer hands, diversification is critical.
In a world that’s becoming increasing automated, we need smart startups finding ways to use the new tools and create the jobs to run them. If Australia can get its policy mix right, kick the property and nanny state addictions then it might open some great opportunities.
If you live and work overseas for a while you quickly realise that we don’t have the basics here for such things to happen. In Japan, they are infatuated with science and [industrial] processes. That’s helpful when you need to make things nicely and with a high level of finish.
In China, they’ve got the supply chain for plastics and materials sorted so that they can make things cheaply.
Even discussion of the issues that are faced here compared to other countries are dismissed. So apart from the ‘vision’ no discussion of the practicality of achieving the outcomes is entertained or allowed.
We have political leaders who are infatuated with ‘managing international companies’ within Australia because it gives them a sense of power. What they don’t realise is that their actions are noted overseas and laughed at. At the peoples expense, but things won’t change.
I agree that people look to property investment rather than entrepreneurialism. The tax system encourages it.
As a culture we also don’t have a particularly positive view of business people. Perhaps as a result of the people who end up in the news.
The other missing piece are the success stories. Like the Apples, Googles, etc. Maybe they are missing because they are all focussed on property investment.